Equities update: Leap years are usually good for investors…here’s why

Budweiser parent AB InBev delivers a mixed brew

Mark Crouch, analyst at investment platform eToro, says: “Beer behemoth Anheuser-Busch InBev beat expectations with its fourth-quarter earnings and revenue, while full-year EBITDA growth of 7% was in line with guidance.

“The company – the world’s largest brewer – said its ‘full potential was constrained’ in 2023 and maintained its medium-outlook for EBITDA growth of 4-8%. Last year certainly was a challenge for the firm in the US, as Bud Light lost its long-held position as America’s biggest-selling beer after a well-publicised boycott of the brand.

“AB InBev announced major sponsorship deals, including the UFC and IOC, in recent months and spent millions on ad spots in this year’s heavily-watched Super Bowl. Whether that can spark a bounce back remains to be seen, but a concern will be how momentum stalled as 2023 progressed: beer volumes declined 2.3% for last year as a whole, but with a 3.6% drop coming in the fourth quarter.

“Though the brewer announced an increase in its dividend, early market reaction has been negative, with its Belgian-listed shares sliding 1.7%.”

IAG investors hoping performance can fuel long-awaited share price recovery

Mark Crouch analyst at investment platform eToro, says “British Airways owner IAG posted a big set of results this morning, reporting record profits which surpass those made pre-pandemic, whilst also reporting a boom in demand with passenger numbers on an upwards trajectory. 

“Shareholders will be keen to see these strong numbers reflected in a rising share price. IAG is trading 70% lower than pre pandemic levels, a damning indicator of just how much confidence was lost in the company following the covid crisis, and one that continues to be viewed with scepticism by investors. 

“A reintroduction of the dividend would go some way to inticing new investors, while also signalling management’s confidence that the turmoil of the pandemic is well and truly behind them.”

Leap years are usually good for investors…here’s why

Ben Laidler, analyst at investment platform eToro, says “An extra day in the year has a number of small impacts for companies and markets, some of which can be positive. For example,  first quarter company earnings will see an extra sales day, boosting revenues by circa 1%. These reports start on April 12^th and some such as Walmart have already incorporated the extra day into their projected sales growth.

“Since the S&P 500 index was created in the 1950’s we have seen 13 leap days with the market open. It has only risen on five of those, or a lower than average 38% the time. The better news is that leap years have much better performance, maybe because they coincide with the US election cycle. In the past century, US stocks have risen 88% of the time in a leap year, only falling in three: in 1940, the 2000 tech bust and the 2008 global financial crisis”

Successful tech rollout will be key to Ocado’s punchy growth forecast 

Adam Vettese, analyst at investment platform eToro, says “After a strong Christmas update last month there is an upbeat tone to Ocado’s full year results, with a growth of market share in the UK for the retail arm and new partnerships on the tech side. There may have been worries that market share would drop off post-festive season but Ocado seems to have retained those customers so far.

“There are some punchy growth targets for 2024 and with the firm noting profits in these three key business areas, shareholders will be hoping this can propel the price back up to 2023 highs, which is a little shy of double your money from here.

“Investors will now want to see if their tech rollout really gets going as this model could underpin the financial performance if they can make a success of it.”