SKY and ASOS

“Stock markets have switched direction following yesterday’s sea of red. Markets step forward on Thursday including a 0.2% rise in the FTSE 100 to 7,609, helped by a strong showing from tobacco and drug stocks,” says Russ Mould, Investment Director at AJ Bell.

SKY

“The stock market continues to believe that the winner of the Sky takeover battle will pay more than has currently been offered. Each time one of the suitors ups their bid, Sky’s share price trades even higher.

“Investors are today betting that Comcast’s £14.75 won’t be the price to seal the deal. In early trading on Thursday, Sky’s shares jumped to £15.35.

“The question is whether investors are being too optimistic or accurately predicting that Fox will increase its £14 offer.

“Takeover battles don’t go on forever and at some point one of the competing parties will have to admit defeat.”

ASOS

“A third quarter trading update from online fashion retailer ASOS is a mixed bag. On the one hand profit margins grew ahead of expectations in the period, on the other hand sales disappointed.

“The market appears to be more focused on the latter, particularly given guidance that growth for the full year to 30 September will fall at the lower end of expectations.

“The negative market reaction should not come as a surprise as ASOS is still considered to be a growth stock – something which is reflected in its high equity valuation.

“The continuing spend on infrastructure and the wider proposition offers another reminder that, while it does not face some of the costs of its bricks and mortar rivals, there are still material costs of doing business for an online operator like ASOS.”

These articles are for information purposes only and are not a personal recommendation or advice.