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Alpesh Patel
Alpesh Patel's columns :
03/09/2005Thinking about Investment Courses
03/02/2005Thinking About Mistakes
02/25/2005Itchy Teeth
02/16/2005When does a stock story get old?
02/07/2005Return Free Risk
01/24/2005What You Need To Know
01/12/2005What You Need To Know
12/21/2004Year End
12/14/2004Of Mountains and Markets
12/08/2004Strong Dollar Policy and Other US Macho Nonesense
11/30/2004Irish Eyes Are Smiling
11/22/2004Oil. Oh it's so last month
11/15/2004Eat my shorts
11/08/2004Big Rally Big Fall
10/31/2004Big Week
10/25/2004Vacuum
10/15/2004Dip and dive or dip and rise: 4600, 4700�4500.
10/11/2004Oil making us boil.
09/27/2004The Trends Re-Appear
09/27/2004Oil
09/21/2004No Retail Therapy Here
09/14/2004Do you feel lucky punk?
08/23/2004The Market Wants To Move Higher
08/17/2004August a good swing trader's month
08/06/2004Where are the jobs?
08/02/2004August a good swing trader's month
07/26/2004Takeovers abound
07/19/2004What does Branson tell us?
07/12/2004Well valued FTSE?
07/02/2004Well hello July
06/28/2004Summer aint bad
06/21/2004The Real Hot Stuff
06/04/2004Not bad at all
06/01/2004May was better than April, hows about June then?
05/21/2004Broader Market View

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Alpesh Patel – A weekly look at market opportunities and pitfalls
Alpesh B. Patel is one of the UK's best-known traders and financial journalists. He writes a regular column for the Financial Times, has written seven bestselling books on trading, and makes regular television appearances for Bloomberg, Sky Television, Channel 4, The Money Channel, and the BBC.

It's not Christmas Yet

11/27/2003

Last week I examined momentum and value-growth stocks. I wanted to say a few words on yield this week following a reader question. As we found out this week the MPC voted 8-1 for the interest rate rise.

Nevertheless what about income from stocks to beat banks? My criteria is not only yield (ie the amount through dividends you get for £100 of stock you own, eg a yield of 5%, means £5 per £100 of stock) but also ensuring the stock is not about to drop in price, otherwise you gain income and lose capital.

So what looks interesting?

Yielding Results

Well, let me kick off with Small Caps. With 8-9% per annum and with a gentle uptrend this year includes James Beattie, but beware any fall below support levels to say 125p.

UK Coal too is looking good on yield and price strength, although some falls recently after an incredible rally this year. The price-earnings is high at 41, but price earnings growth only 0.25.

British Polythene Industries gives you yield plus price stability as does another name you may not have come across – Metalrax.

Other names worth examining – The Malcolm Group, and Blick.

As for FTSE 350, for those wanting more blue chip companies, those yielding over 6%, not an excessive valuation and price growth or stability:

  • Novar – watch to ensure the uptrend continues
  • DFS – has fallen back but does not mean will continue falling given the yield
  • Viridian – again strong uptrend
  • Kelda – a sideways move so one would look to make a return from the dividend
  • Investec – another strong return
  • Pilkington – once again, strong returns

So there you have some sound players. Okay, what about value-growth superimposed on top of them – do we have any on both lists?

No, Holiday Break comes up on the FTSE 350, but only has a yield of 4 – not a problem if we expect the stock to rise.

Recent moves on FTSE 100

Despite pressure on the FTSE 100 (I guess fund money is waiting a bit longer before getting in before next year) British Land shows strength and a 2 month 600p target is a serious possibility.

Land Securities is another play moving higher, this time a lot closer to resistance and we must be careful it ensure it does break through the level.

For the FTSE 100, I am still placing odds in favour of a close between 4450-4550.


Alpesh B Patel, author of “Alpesh Patel on Stock Futures” available from the ADVFN bookstore.