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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Marks & Spencer -Stronger Q2 heralds re-rating

December 2012

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • MKS
  • Price:
  • 371p
The shares soared towards 400p ahead of interim results, which showed an improvement in trading. Although pretax profit fell 10% to £289.5m in the six months to 29 September, with eps falling from 16p to 14.2p, the second quarter showed like-for-like sales unchanged, compared with minus 2.8% in Q1. Within that, general merchandise (including clothing) saw underlying sales decline 1.8%, compared with minus 6.8% in Q1 while food sales grew 1.6% (Q1: +0.6%). Net debt was £2.6bn (H1 2011: £2.6bn). Encouragingly, UK gross margin rose 0.3% to 41.7%, helped by favourable currency movements and tight management of mark-downs in general merchandise and improved buying and better management of waste in the food business. In genera ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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