News from FTSE shares tend to dry up in December. But I think a few of my favourites might just get a boost from January updates.
It poses a tricky question. If we’re bullish about a stock, should we buy before the news, or wait and see if it’s what we hoped?
There’s an old saying that we should “buy on the rumour, and sell on the news“. But that doesn’t make sense to me. What if the news is that the rumour was false?
Back in favour
Anyway, let’s start with a stock I’ve been negative about for a couple of decades now. I’m talking of Marks & Spencer (LSE: MKS), and I finally think it’s starting to look good.
After climbing back into the FTSE 100, M&S shares have carried on up. They’ve now doubled in the past 12 months — even if the five-year charts suggests there’s still more work to do.
We should have Christmas trading news from M&S on 11 January. And it’s the one Yuletide update that I’m keen to see above all others.
It’s hard to get a feel for a fair valuation for M&S shares right now. But broker forecasts show rising earnings in the next few years, and the return of dividends.
Do I really think M&S might be a buy for the new year, after so many years of seeing the stock as financial poison?
It’s a definite possibility.
Housing
We’ll have a trading update from housebuilder Persimmon (LSE: PSN) on 10 January. I expect upbeat news, although a lot of it looks to be already built into the share price.
The five-year chart doesn’t look so good. But the shares have been picking up in the past couple of months.
Some dividend forecasts for the sector have been cut back, including Persimmon’s. That’s no surprise after the hammering the propery market took this year from soaring mortgage rates.
But forecasts still suggest about 4.4% for 2023 ordinary dividends. And they show a pretty quick return to rising yields.
If that’s the worst it gets in the worst 12 months for the property market in 15 years, I don’t think it’s too bad.
I hope to see more signs of recovery in 2024. And I’ll be checking Taylor Wimpey‘s update the next day.
Pharma full year
GSK (LSE: GSK) has been a bit overshadowed since Covid, by AstraZeneca and its vaccine. It shows in the five-year share price charts.
While AstraZeneca shares are on a buoyant price-to-earnings (P/E) valuation close to 30, GSK’s is only about third of that, at 10.
Is GSK good value now? I think it might be, with dividends of around 4% on the cards. We’re looking at a yield of only 2.3% for its rival. But I want to see the results before I decide.
On 31 January, we should them for the full year. They’ll follow a healthcare conference earlier in the month, and I doubt there’ll be any real surprises.
At Q3 time, things were looking good, with strong year-to-date earnings growth. More of that, please.
The post 3 cheap FTSE shares to consider buying in January appeared first on The Motley Fool UK.
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Alan Oscroft has positions in Persimmon Plc. The Motley Fool UK has recommended AstraZeneca Plc and GSK. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
