Why is the FTSE 100 holding back from the 7,000 level while some of its stars are soaring? Its the laggards that are putting the brake on the various London indices, and here are five of the culprits:
Centrica
The reason for the Centrica (LSE: CNA) slump is clear, with the already-slipping shares being dumped after the owner of British Gas and Scottish Gas slashed its final dividend due to the need to conserve cash. At 238p as I write, Centrica shares are down 28% over the past 12 months.
But with even the rebased dividend now looking set to deliver a 5.5% yield this year, Centrica looks cheap.
HSBC
HSBC Holdings (LSE: HSBA) has been in the news for all the wrong reasons, with allegations that it helped wealthy clients in Switzerland to evade tax looking pretty damning. The resulting price drop has helped push the shares down 16% from last Septembers peak, to 557p.
But come on, the shares are now on a P/E of only around 10 with a 6% dividend forecast for this year, and the cash would be 1.6 times covered by earnings that has to be too cheap, doesnt it?
RSA
Shares in RSA Insurance (LSE: RSA) are down 16% since May last year to 421p, pushed lower after the firm failed to meet its forecasts for 2014. But it was a transformational year, which saw a 275m pre-tax profit just a year after RSA recorded a 2013 loss of 244m. The dividend was reinstated, albeit at a modest 0.5% yield, but the City has 3.4% penciled in for this year and 4.3% next.
Boss Stephen Hester said We can look to the coming years with much sounder strategic and financial foundations, and with EPS growth back and a 2016 P/E of 12, I reckon RSA is undervalued too.
Fresnillo
Fresnillo (LSE: FRES) took a sharp dip when 2014 results were released last week, and weve seen a 29% fall since late January to 652p. Despite record silver production and gold production in line with expectations, the yellow stuffs plunge to five-year lows led to a performance described as merely reasonable by CEO Octavio Alvdrez.
With dividends very low and conditions not looking ripe for a new bull run for gold any time soon, I can see why people are shunning Fresnillo, and I join them.
PayPoint
PayPoint (LSE: PAY) shares have taken a 30% dip in 12 months, to 836p, after the shine started to dull on this growth star. Forecasts from the payment processing specialist have been cut back a little recently, and that often leads to a downwards rerating for growth favourites and single-digit EPS rises forecast for the next three years wont excite the multibagger-seekers.
But were now looking at a P/E of only 14.6, dropping to 12.7 on 2017 predictions, and dividend yields are already set to reach 4.5% and are rising. Looks oversold to me.
Finally, if you like exciting opportunities, how does a great new e-commerce opportunity that’s set to take many people by surprise grab you?
We have a brand new report for you, detailing 3 Hidden Factors Behind This Daring E-commerce Play, which could help set you on the road to riches if you’re smart enough to take up the opportunity while you can.
If you want to get in on one of the potentially most lucrative investments of 2015, you can find out more by clicking here now.
Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Centrica and HSBC Holdings. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.