Profit Warnings Dampen the Market

THE WEEK: Morningstar columnist Rodney Hobson shares his woes following recent profit concerns at several major UK companies

Rodney Hobson 13 November, 2015 | 1:40PM
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Foggy Unfruitfulness

Autumn is supposed to be the season of mists and mellow fruitfulness but the stock market has been in more of a fog these past couple of months and the fruit is shrivelled and unripened after a cold, damp summer.

The profit falls and profit warnings have started to get distinctly uncomfortable. While the UK economy contrives to thrive, as employment figures this week demonstrated, it is not just the oil and oil-related sectors that are suffering. Problems are disconcertingly wide-ranging. Yet life should be so much better as falling energy costs hold down input prices and make doing business cheaper.

The one that really hurt me personally was Sainsbury (SBRY), where shares fell heavily over two consecutive days after a fall in first half profits. The dividend over several years has been some compensation for the deficit I now suffer in the value of my holding but now comes the blow of a 20% reduction in the payout.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Anheuser-Busch InBev SA/NV ADR74.85 USD-0.65Rating
Halfords Group PLC377.80 GBX-1.00
Rolls-Royce Holdings PLC102.70 GBX-0.27Rating
Sainsbury (J) PLC264.50 GBX0.00Rating
Tesco PLC231.80 GBX-0.19Rating

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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