These Unloved Shares Are About To Update Investors! Is Now The Time To Buy In?
These sinking UK shares are all slated to update the market in the coming weeks. Does this make today a great time to buy?
British banking bruiser NatWest Group is set to release third-quarter trading numbers on Friday, October 30. But I won’t be buying the FTSE 100 firm — which up until recently was known as Royal Bank of Scotland Group — as I reckon it could drop sharply in the aftermath of the update.
The NatWest share price has collapsed 52% in 2020 as the Covid-19 crisis has decimated the UK economy. And there’s little reason to expect the bank to rebound in value. City analysts reckon annual earnings at NatWest will recover strongly next year but I’m not so sure because of a toxic cocktail of rising coronavirus cases and fresh lockdowns; a botched Brexit process; and an environment of record low interest rates.
NatWest booked a whopping £2.9bn worth of Covid-19-related impairments for the first half of 2020, much more than analysts had been expecting. The FTSE 100 bank has said that it expects full-year impairments to range between £3.5bn and £4.5bn. But should signs emerge that NatWest has again underestimated the scale write-downs the market won’t be forgiving. I reckon this share is packed with far too much risk right now.
I’d much rather buy shares in Softcat today. The IT services giant is due to release full-year results on Tuesday, October 20. And I’m expecting another solid set of results which could provide its share price — which has retraced significantly in recent weeks as investors have booked profits following a blockbuster first nine months of 2020 — with a fresh dose of jet fuel.
A series of positive trading releases supercharged investor interest in Softcat earlier this year. This has been driven in part by the sudden spike in the homeworking phenomenon, a trend that has lifted demand for the tech giant’s cloud computing and cybersecurity services. Last time Softcat updated on trading in mid-August it said that performance for the fiscal year ending July 2020 came in “slightly ahead” of its expectations. I expect the IT star to have got the new period off to a flyer as well.
In fact the long-term profits signals for Softcat are extremely positive, the latest survey from recruitment giant Manpower Group MAN adding more reason to be bullish. It said that 59% of employers it asked were planning to offer more flexible working arrangements in the future. It’s one of many gauges that suggest Softcat’s phones will start ringing off the hook.