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“The FTSE 100’s losing streak has come to an end on Tuesday morning, much to investors’ relief. Having fallen 3.7% in three trading days to Monday amid concerns over rising US Treasury yields, the market now finds its feet with a 2 point rise to 7,235. European markets are also acting in the same way with new-found stability. “Miners, in particular, are in positive territory on Tuesday with FTSE 100 stocks Evraz, Antofagasta and Glencore leading the sector,” says Russ Mould, Investment Director at AJ Bell.
Aviva
“Aviva’s chief executive Mark Wilson has been credited with turning around the business yet it seems investors aren’t fussed about his departure. News that he will leave in six months’ time has triggered a rise in the share price, implying that the market is happy about someone different coming in to lead the business.
“Under Mr Wilson’s leadership, Aviva has improved its financial performance and balance sheet strength and become a leaner and fitter business.
“The board says it now wants new leadership to take the group to the next phase of its development, considering both internal and external candidates. Indeed, shareholders may be yearning for a new person to switch the focus from repair-work to accelerated growth.
“In share price terms, Aviva has only risen by 27% in value since Mr Wilson become boss in January 2013. That is marginally better than the FTSE 100 (+23%) but nowhere near as good as life insurance sector peers Prudential (+94%) and Legal & General (+78%) over the same period.
“Shareholders have clearly had to be patient while Aviva has been fixed, but there comes a point where a different mindset is needed to push the business forward and generate extra value.
“You could also argue that Mr Wilson has already had a decent run at Aviva given he has served for longer than the average among FTSE 100 chief executives. He’s been in the job for 2,106 days – equal to 69 months or 5.8 years – versus an average of 1,898 days, 62 months or 5.2 years.
“Mr Wilson is the eighteenth FTSE 100 chief executive change announced this year which is an unprecedented amount of management change among large cap companies.”
Greggs
“Sausage rolls and pasties are not typically what you hanker after on a warm sunny day so for Greggs to achieve like-for-like sales growth of 3.2% through a third quarter period which encompassed the summer heatwave is impressive.
“It also shows the company’s efforts in branching out from its budget baker beginnings to new product ranges are bearing some fruit. Strong demand for pizzas and summer drinks was a significant factor behind the robust sales performance.
“As such it is a feather in the cap for Greggs’ well-regarded management team and should help get the market back on side after May’s cold weather-related profit warning.
“Notably, despite an iffy performance for the shares in 2018, they have still more than doubled since chief executive Roger Whiteside took the helm in early 2013.”
“The mix of products sold in the first part of the quarter did hit margins and though this has been offset by recovering profitability in September it helps explain why full year expectations remain unchanged.”
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