Just a couple of corporate updates today from stocks that I follow, namely Greene King (GNK) the brewer pub and restaurant chain and Aberdeen Asset Management (ADN). As I'm feeling a bit lethargic post a long drab bank holiday weekend I'll not go into them in great detail.
But in passing I note the Greene King were flagging a second half which was tougher than the first half, with more difficult comparatives to last year and the additional impact of new drink driving legislation in Scotland. Despite this they also mention some modest growth across the business, a strong Easter and also potential benefits to come from the Spirit acquisition if it is approved by the Competition and Markets Authority.
Ahead of that and on the back of this update it seems fine on 12 to 13x PE and a yield of 3.7% to 4% for the year about to end and the year to May 2016 (Source: Stockopedia) who give it a Stock rank of 70 while it scores 72 on the Compound Income Scores. So seems like a strong hold to me rather than a raging buy although it has been marked up modestly first thing.
Meanwhile in the City Aberdeen reported a reasonable looking set of interims with an 11% increase in the dividend, just ahead of forecast growth, so I reckon they'll pay 20p for the full year rather than the consensus 19.8p. This was despite a small net out flow of assets under management, but they did flag the on going benefits of the Scottish Widows acquisition which completed about a year ago. They also saw good cash flow and also committed to a £100 million share buy back programme which suggests they have confidence in their cash flows and may be see this as a good way of returning extra value to shareholders at this time.
With the shares on just under 14x and yielding a little over 4.2% this is hard to argue with. I continue to like them as a beneficiary of financial repression forcing savers into more risky assets. in addition they are a top decile stock on the Compound Income Scores with a score of 93 thanks to their good yield, dividend growth, strong balance sheet and solid financial metrics. Mr Market doesn't seem that impressed though as he has marked them down this morning. The shares have also come back quite sharply recently after hitting new 12 month highs, presumably on some profit taking ahead of the general election?
While that makes sense and it would not be an obvious one to buy ahead of that, it's possible it could provide a good entry point for a post election bounce once the dust settles, although the market has been remarkably calm up to now. Nevertheless, I note the 200 day moving average is currently around 440p and there is a gap on the chart just above 430p from early February this year (see chart below). So if you are attracted by this one then I would suggest you could use that range as potential entry point given the likely support that should be coming in from the share buy back too, although no guarantees that it will get there or even stop its decline there, just a suggestion and as always make sure you do your own research.