After a long busy season, it is finally the time for holidays, and it is more likely that investors have their mind divulged in attending parties and dreaming about holidays. But for those who are investing, it is important to keep some things in mind which will help them deal with pre-Christmas uncertainty as markets during the holiday season can be extremely slow or highly volatile.
- Big investors usually take a retreat during the season and market is affected by the ones who are left. This can lead to instability.
- Usually markets close in the early hours and tend to move really slow than in normal days. There are days when it remains entirely shut. It is important to keep a check on these dates and not be astounded on an early closing.
- It is important to stay cautious when the large positions are filled during this particular season as trading and brokerage firms have their goals to meet while everyone is thinking of the expenses and taxes.
- The investors who take short positions in the stock have to be more cautious as market prices usually are higher during the holiday season.
- Understand the history. Before investing in a stock see how it has performed in the past years during the holiday season. Also, compare these stocks with their peers and avoid drawing conclusions very quickly.
Some stocks which are more likely to perform well in the market are listed below:
Australia And New Zealand Banking Group Limited (ASX: ANZ)
Australia And New Zealand Banking Group Limited (ASX: ANZ) provides banking and financial products and services to individual and business customers.
ANZ Interest payment and Dividend/Distribution
Australia and New Zealand Banking Group Limited shall pay interest on USD 1,250,000,000 2.05% Covered Bond on 27 May 2020. The Bank has recently declared a partially franked (70%) dividend of 80 cents per share on ordinary fully paid securities which is payable on December 18, 2019. This resulted the full year dividend to be 160 cents.
Issue of Euro 1,000,000,000 1.125% Subordinated Notes and Notice of AGM
The bank announced that it will issue subordinated notes of Euro 1,000,000,000 pursuant to its Euro Medium Term Note Programme of US$60 billion. 2019 Annual General Meeting of ANZ is to be held on 17 December 2019.
2019 Financial Performance
During the year, the bank earned a cash profit of $6.5 billion with cash earnings per share of 228 cents. Challenging conditions continued for the bank in 2019 and statutory profit was down by 7% on the previous year to $6 billion in FY19. The company delivered decent returns of 9.2%, enabling shareholders to meet goals.
The stock of ANZ closed at a price of $24.655, down by 1.341% on December 03, 2019. As per ASX, the stock of ANZ gave a return of 4.74% on the year to date basis. The company has a market capitalisation of 70.84 billion. On the valuation front, the stock is trading at a P/E multiple of 11.900x and is earning a dividend yield of 6.4%.
Bapcor Limited (ASX: BAP)
Bapcor Limited (ASX: BAP) is engaged in sale and distribution of motor vehicle aftermarket parts and accessories, automotive equipment and services and vehicle servicing.
Record Results across all measures
During the year, revenue of the company went up by 4.8% and stood at $1,297 million with rising NPAT (Net Profit After Tax) of $94.3 million, up by 9%. This resulted EPS (Earnings per Share) to go up by 8% to 33.45 cents. Major segments of the company including Burson Trade, Bapcor New Zealand and Specialist Wholesale recorded solid growth. The company also added 59 new company branch / store locations across 950 locations.
Financial Performance (Source: Company’s Presentation)
What to Expect
The company expects to drive profit growth through market fundamentals and appropriate opportunities. It also anticipates an increase of mid-single digit percentage in pro-forma NPAT with EBITDA rise of 2%, owing to additional depreciation from investment in technology and systems.
The stock of BAP closed at $6.750, down by 2.174% on December 03, 2019, close to its 52-week high of $7.525. As per ASX, the stock gave a return of 17.15% in the past 6 months and a return of 2.83% in the past 3 months. As on date, the market capitalisation of the company stood at $1.96 billion and is earning a dividend yield of 2.46%.
Reliance Worldwide Corporation Limited (ASX: RWC)
Reliance Worldwide Corporation Limited (ASX: RWC) is in the business of designing, producing and supplying of water flow and control products and solutions for the plumbing industry.
In the recently held Annual General Meeting, the top management of the company addressed the shareholders and stated that the company made a record sale with growth of 43% and profit, up by 102% to $133 million for FY19. This reflected the first full year inclusion of the John Guest group and continued sales growth for the core RWC portfolio. During the year, the company paid $71.1 million as fully franked dividends, representing a pay-out ratio of 53% of net profit after tax. There were a number of other achievements during the year beyond the financial outcomes.
The company gave FY2020 guidance indicating a net profit after tax to range in between $150 million to $165 million. It also expects future dividends to be less than 50% franked as the change in geographic mix of earnings following acquisitions reduces access to franking credits.
The stock of RWC closed at $4.100, down by 1.679% on December 03, 2019. As per ASX, the stock of RWC gave a return of 18.47% in the past 6 months. As on date, the market cap of the company stood at $3.29 billion and is earning a dividend yield of 2.16%.
Virgin Money UK PLC (ASX: VUK)
Virgin Money UK PLC (ASX: VUK) offers savings, mortgages, credit cards, current accounts, currency services, pensions, investments and protection products to customers across the UK.
2019 was a year of significant progress for the company. During the year, Underlying profit before tax stood at £539 million, down 7% due to higher impairments. The company witnessed above market growth in Business and Personal and saw a good growth in relationship deposits with customer lending growth of 2.9% to £73.0 billion.
Expectations and Stock Performance
The company gave a guidance for FY20 wherein it expects Underlying operating costs of less than £900 million. It also expects CMD strategy to remain on track re-affirming the targets, including modest improvement in NIM by FY22, 12% by FY22. As per ASX, the stock of VUK gave a return of 37.65% in the past 3 months and a return of 33.97% in the past 30 days. This resulted the stock price to incline towards its 52-week’s higher level and close at $3.340 on December 03, 2019. As on date, the market cap of the company stood at $5.04 billion and is earning a dividend yield of 1.58%.
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