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Stock market forecasting is mostly a game of cups. But many companies that I rate as undervalued will deliver results in March. These three in particular have caught my attention.
fan
Insurer fan (LSE: AV.) will publish FY22 results on March 9. The company must announce a share buyback.
A third quarter update said: “Our dividend guidance remains unchanged and, as previously announced, we anticipate beginning additional returns of capital to shareholders with our full-year 2022 results..”
A return could alternatively take the form of a special dividend. And that’s a reasonably common way to deal with erratic earnings in the insurance industry.
But forecasts put the price-earnings (P/E) ratio below nine by 2023. And that surely makes Aviva’s stock look too cheap for the board to ignore. I expect the buyback to be reasonably substantial.
My prediction? Positive results will fail to lift Aviva’s share price appreciably, as there appears to be too much momentum holding back financial sector stocks at the moment. The price could even drop, and I expect Aviva to remain a cheap buy.
vistry
The results of the whole year await us Vistry Group (LSE: VTY), the homebuilder formerly known as Bovis Homes, on March 22. I predict something better than expected.
Vistry’s share price has recovered well from the depths of October, gaining 55%. So some confidence in the sector is rebuilding since last year’s gloomy sentiment took its toll.
Yes, mortgage rates are increasing. Yes, property prices are falling. And yes, the entire real estate market is under pressure. But there are two reasons why I think Vistry could report a better start to 2023 than expected.
One is that there’s still pent-up demand from the Covid years, when buying a new home became a distant dream. And the country still faces a chronic housing shortage.
I could be wrong about 2023. But I still rate Home Builders among the Footsie’s best long-term investments.
symtomer
I predict further stock price weakness for symtomer (LSE: SYNT) on March 28 when we get full-year results.
Shares have fallen more than 50% since last May. This is essentially due toreduced demand in Synthomer’s construction and coatings end markets”, as the company said in its December update.
Debt is also mounting, although the company recently confirmed the sale of its laminate, film and coated fabric businesses for $262 million.
What do I expect from the results? I look forward to more clarity on the company’s banking arrangements, with some reasonable liquidity. And I think we will.
I see Synthomer as a possible long-term recovery buy. But I fear more pain first.
Verdict
Please don’t take any of my predictions too seriously as they are really just speculation. I have also not adequately examined the risks of any of these three, which potential investors should really do.
But I can’t help but think I’d do well to buy all three right now and hold onto them for the long haul.
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