Stock markets flew in much of the world last year so it's only fitting that the FTSE 100's biggest two gainers in 2013 were airlines.
While the UK's blue chip index advanced 14.4% investors in International Airlines Group (ICAG.L) saw their shares soar more than 117%, while shareholders in Easyjet doubled their money, according to Thomson Reuters data.
IAG has reaped the reward of restructuring British Airways a few years ago and is getting the benefit of the doubt in its efforts to turn round Iberia, the loss-making Spanish airline with which BA merged in 2011. In November it impressed the City with a doubling in first half profits and raising its 2015 profit target to €1.8 billion (£1.5 billion) from €1.6 billion (£1.3 billion).
This is good news for investors in the Templeton Growth fund, co-managed by the Citywire AAA-rated Peter Moeschter and Dylan Ball, and the highly regarded Majedie UK Equity fund, which both hold IAG as a top 10 position.
Easyjet (EZJ.L) has also bucked the impact of weak economic growth and high fuel costs. Its switch to a more customer-friendly approach outfooted arch rival Ryanair (RYA.L) and boosted profits, enabling it to pay a £175 million special dividend. Among investors to be pleased was Tom Dobell, manager of the M&G Recovery fund, which allocates 2.5% of its money to Easyjet. The fund needed a boost after indifferent performance in recent years.
Speaking of dividends, our two tables show the yield of the top risers and fallers, based on analysts' dividend forecasts for the year ahead. After last year's strong share price gains, it's no surprise that the top FTSE risers (see below) yield less than the 10 biggest fallers (see bottom of the article), most of which are in the battered mining and natural resources sectors.
As feared, the controversial mega-merger of Glencore and Xstrata signalled the peak of the commodities boom. The merged company (GLEN.L) marked its first year with an 11% share price fall, although that was relatively light compared to the carnage elsewhere in the sector, particularly in precious metals where silver miner Fresnillo (FRES.L) slumped nearly 60%.
Top 10 FTSE 100 risers
|Company||2013 gain (%)||Sector||Price-to-forecast earnings (P/E)||Forward dividend yield (%)|
|International Airlines Group (ICAG.L)||117.20||Airlines||12.50||1|
|Hargreaves Lansdown (HRGV.L)||100.50||Investment management||33.60||2.50|
|Sports Direct International (SPD.L)||85||Speciality retailers||20.40||1|
|Ashtead (AHT.L)||78.30||Business support services||15.70||1.60|
|Travis Perkins (TPK.L)||72||Home improvement products||16||2.10|
|Lloyds Banking Group (LLOY.L)||64.60||Banks||11.06||3|
|BT Group (BT.L)||64.20||Telecommunications||13.30||3.20|
Source: Thomson Reuters
House builder Persimmon (PSN.L) is an exception, yielding just over 5% despite a near two thirds leap in its share price in response to the government's housing market intervention last year. That's one reason why the body of analyst opinion remains in favour of the stock (Thomson Reuters records seven 'holds', four 'buys' and two 'strong buys' offset by just one 'sell' and 'strong sell' apiece).
To be fair, the collective opinion of City scribblers is broadly positive on all the stocks, whether they are at the top or the bottom of the FTSE 100. Many analysts are presumably betting on the big risers maintaining their momentum while reckoning those at the bottom of the pile may bounce back in 2014.
The one stock where there is an even split in analyst opinion is Hargreaves Lansdown (HRGV.L). Analysts are divided on whether the online stock broker and funds supermarket can maintain its progress after a year in which its share price doubled and its leadership of the growing market for DIY investors was confirmed. According to Thomson Reuters, six analysts rate the stock a 'hold' with three analysts recommending it either as a buy or sell. With the shares trading at 33 times forecast earnings, investors are clearly having to pay for the growth it offers.
Much may depend on customer reaction to the new tariffs and charges that Hargreaves - and its rivals - are expected to unveil shortly. Fund managers Harry Nimmo (pictured) and Nick Train are betting the company will pull through any turbulence and will benefit from the growing numbers of people switching to the Internet to take charge of their savings and investments. They respectively hold 3.5% and 7.6% of their Standard Life Investments UK Smaller Companies and Linsdell Train UK Equity funds in the stock.
Elsewhere, Travis Perkins (TPK.L), the country's biggest supplier of building materials, held by Nigel Thomas in the AXA Framlington UK Select Opportunities fund, has also benefited from the coalition efforts to stimulate the housing market.
Similarly, Ashtead (AHT.L), which hires diggers and building tools, has continued to enjoy the boom in US construction, much to the pleasure of manager Richard Watts who has it as a top holding in the Old Mutual UK Mid Cap fund.
Sports Direct International (SPD.L), the retailer controlled by Mike Ashley, the billionaire owner of Newcastle United, shows the reward of supplying consumers with affordable goods. Crispin Odey (pictured) has traded in SPD through his Allegra International, Opus and UK Absolute Return funds. However, the share price has dipped 3% in the past month after analysts detected a less than stellar trading performance in the half-year results last month.
Sentiment remains positive for ITV (ITV.L). Although it lost the Christmas ratings war with the BBC, investors have been impressed with the turnaround wrought by chief executive Adam Crozier and are looking forward to another special dividend if this year's World Cup brings in the advertisers to the broadcaster of Downton Abbey and the X-Factor. According to Thomson Reuters, Clive Beagles, the Citywire AA-rated manager of JOHCM UK Equity Income took some profits in the stock last September.
Lastly, there has been a dramatic turnround in Lloyds Banking Group (LLOY.L). Although the shares are well below their pre-crisis levels, they have surged in response to the government's decision to start selling down its stake and signals from chief executive Antonio Horta-Osorio that a return to the dividend list may not be far off. However, the 13% slide in Standard Chartered (STAN.L) following the downturn in emerging markets shows that the sector needs careful handling. The same applies to RSA Insurance Group (RSA.L), victim of three profits warning last year.
Top 10 biggest FTSE 100 fallers
|Company||2013 loss (%)||Sector||Price-to-forecast earnings (P/E)||Forward dividend yield (%)|
|Fresnillo (FRES.L)||-59.60||Precious metals and minerals||29.70||1.70%|
|Antofagasta (ANTO.L)||-37.70||Speciality mining & metals||16.80||2.20%|
|Randgold Resources (RRS.L)||-36.30||Precious metals and minerals||17||0.80%|
|Tullow Oil (TLW.L)||-32.20||Oil & gas exploration and production||23.10||1.30%|
|Anglo American (AAL.L)||-30.30||Speciality mining & metals||12||3.90%|
|RSA Insurance Group (RSA.L)||-27.30||Property & casualty insurance||7.70||5.60%|
|Petrofac (PFC.L)||-24.60||Oil related services and equipment||10.50||3.40%|
|Standard Chartered (STAN.L)||-13.60||Banks||10.10||4%|
|BHP Billiton (BLT.L)||-12.2||Speciality mining & metals||11.40||4.10%|
|Glencore Xstrata (GLEN.L)||-11||Oil & gas exploration and production||15.10||3.00%|