It’s been a ropey old journey so far this year for investors in the AA – one in which 46 per cent has been wiped from the value of the roadside assistance firm after it hit a series of potholes.
In fact the damage has been even worse for those who bought into its 2014 stock market listing at 250p, or when the shares were above 400p at their peak in 2015.
Yesterday may represent a fork in the road, analysts believe. It rose 5.6 per cent, or 2.8p, to 52.95p after it said it would hit financial targets for the year and is on course to hit medium-term goals. Paid membership has stabilised at around 3.2m, while the insurance business performed strongly.
AA rose 5.6 per cent, or 2.8p, to 52.95p after it said it would hit financial targets for the year and is on course to hit medium-term goals. Paid membership has stabilised at around 3.2m
City broker Liberum believes AA shares are worth more than double their current level.
The FTSE 100 ended the session in reasonably chipper mood, closing up 1.2 per cent, or 87.20 points at 7285.90. Gold was down from Wednesday’s six-year high water mark but remained near $1,500 an ounce.
It tends to be a haven investment, and few holders appear willing to offload with a Sino-American trade war bubbling in the background.
NMC Health, which owns medical centres in the Gulf states, spiked 4.8 per cent, or 95p, to 2095p after it settled the market’s nerves over its financial health.
After a two-day sell-off in the wake of its results, Rolls-Royce was back on a roll with bargain hunters driving the price 6 per cent, or 43.6p, higher to 773.6p.
Stock Watch – Yellow Cake
Yellow Cake is an investment firm that buys stocks of uranium, which in powder form is called ‘yellow cake’.
The mining team at German bank Berenberg believes investors are missing a trick with this firm.
While uranium’s price has been fairly static over the past three weeks, the shares have drifted 11 per cent.
This has opened a significant discount to Yellow Cake’s net asset value, it pointed out yesterday.
The shares, up 0.5 per cent, or 1p, to 200p, are worth 280p, Berenberg claims.
BT was the second biggest faller of the day as it went ex-dividend, which means anyone buying the stock from now will not get a payout.
The 5.9 per cent, or 10.84p, fall to 173.56p was largely a technical adjustment. That said, price target cuts from Deutsche Bank and HSBC probably didn’t help.
Also on the retreat was bottling and distribution firm Coca-Cola HBC (off 1.1 per cent, or 31p, at 2799p) after first-half profits fell marginally short of expectations.
Credit Suisse looked at the real estate sector, focused on some rebalancing of valuations downward. The price target for Intu, the struggling shopping centre owner, was cut from 100p to 40p.
The shares, hit by worries over its debt pile, fell a further 0.8 per cent, or 0.3p, to 38.78p.
The Swiss bank nipped its valuation of Hammerson back from 450p to 360p, but continues to expect the shares – up 3.1 per cent, or 6.7p, to 222p – to outperform.
While losses widened for lender Funding Circle it was all about the top line, with revenues up 29 per cent.
Shares rose 6.9 per cent, or 6.8p, to 105.8p. Estate agency chain Savills was moving in the opposite direction after resilient half-year results were used as a cue for profit-taking.
The stock, up around 13 per cent since May’s nadir, fell 2.4 per cent, or 22.5p, to 925p.
Among the small-caps, Virtual reality entertainment group EVR’s gains were very real. Its shares surged 12.3 per cent, or 0.75p, to 6.85p after its subsidiary, Melody VR, signed a music licensing agreement with independent labels, Beggars Group and Domino Recording. Artists on Beggars include The xx and Radiohead, while Domino represents performers including the Arctic Monkeys.
Deals also brought a boost for water technology specialist Xeros, which gushed 3.2 per cent, or 0.3p, higher to 8.24p after agreeing to sell most of the customer portfolio for its US commercial laundry business.
Screening specialist Clear Star was glowing after its medical screening business passed over $1m (£820,000) in monthly sales for the first time. The shares rose 13.9 per cent, or 7.5p, to 61.5p.