In the last month, the share prices of ASOS plc (LON:ASC) (ASC.L), Prudential plc (LON:PRU) (PRU.L), BT Group plc (LON:BT.A) (BT.A.L) and Taylor Wimpey plc (LON:TW) (TW.L) have all fallen.
In the cases of ASOS and Taylor Wimpey, I think they may face some uncertainty due to Brexit. The weaker pound has caused inflation to rise to 2.9%, and it is now ahead of wage growth. This could mean a range of expenditure such as clothing and mortgage repayments may become less affordable for people across the country. This could create more difficult trading conditions for both stocks in my view.
In the long run, however, I’m optimistic about their prospects. I think ASOS has a strong brand with a good strategy. It continues to have high margins and also trades at a fair price according to my research. Taylor Wimpey is also relatively cheap after its 2.7% fall in the last month (versus 4% for ASOS). The housebuilder offers strong income prospects as well as growth potential in the long run as housing demand is likely to outstrip supply for some time in my opinion.
Also falling in the last month have been shares in BT and Prudential. They are down 1.5% and 3.5% respectively. In the case of BT, I think there could be some difficulties in the short run from a squeeze on consumer spending in the UK. This may cause the company’s margins to come under some pressure. However, with the full benefits of its EE acquisition and subsequent restructuring yet to feed through into its financial performance, I’m upbeat about the prospects for the BT share price in the long run.
Prudential also has investment potential to my mind. I like its exposure to the emerging world and believe this could stimulate its profitability as well as dividend payments. A diverse business model which includes insurance, fund management and other financial services may also reduce its overall risk. Therefore, I think the Prudential share price could rise in future years.