Tesco is the supermarket that has made all the headlines in 2014, for all the wrong reasons. But when itcomes to its well-publicised share price crash, we find Morrisons(LSE: MRW) actually not far behind it.
Failing to compete
Morrisonsshares, in fact, have lost 33% since the start of 2014 to fallto 181p, and thats even after a 16% recovery since the end of October. Considered by many to be the UKs least appealing supermarket, Morrisons has suffered badly fromthe price-cutting times were now in and things have not been helped by its tardiness in getting online shopping off the ground and its last place in spotting the benefits of the convenience store format.
And if thats not scary enough, Morrisons shares are still on a forward P/E of above 14, with a swingeing drop of 50% in EPS forecast for the year to January 2015. Theres still a very big 7% dividend yield predicted, but it will probably only just be covered.
This is a good bank?
Barclays (LSE: BARC) (NYSE: BCS.US) is more of a surprise to me, as its looked very strong in its recapitalisation over the past couple of years and is on for a return to earnings growth this year. Yet by 16 October its shares were down 24% theyve since recovered a little, but the price is still down 12% since the start of the year to 243p.
The problem has really been the continuingrevelations of banking misbehaviour, and theres a fear factor built into the share price in case of future fines. But were looking at a forecast P/E of under 12, dropping to just 9 based on 2015 expectations and at the same time, we should see a well-covereddividend yield grow from 2.8% to 4%.
Is that a share thats undervalued? It looks that way to me.
Wheres 4G?
Vodafone (LSE: VOD) (NASDAQ: VOD.US) is another thats pulling it out of the fire as we reach the end of the year. Bymid-October its shares were down 25%, but weve seen a recovery since then to a fall of just 9% since the start of 2014.
In Vodafones case things just look too uncertain after its previous performance was dominated by the sale of its Verizon Wireless stake. Whats left of the company is set for a 64% drop in EPS for the year to March 2015, which would give us a heady P/E of over 35! And a 7% recovery penciled in for the following year would drop that only as far as 33.
Forecast dividends are only around half covered by earnings, so we really are looking at a valuation based on what a future Vodafone with its full-fledged 4G network is going to bring. But the Vodafone we have now is facing falling revenues and a stretching share price. Not one of my favouritesfor 2015.
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Alan Oscroft has no position in any shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
