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I like to keep my mind when it comes to actions in Great Britain, but some still worry me, including these two FTSE 100 Giants. I never had, but sometimes I was very tempted. Fortunately, I did not seal the contract.
One name that caught my attention is the global advertising and media group WPP (LSE: WPP). It was under pressure because the founder and driving force Sir Martin Sorrell came under the cloud in 2018. The actions lost 28% of their value over the past year, and now they trade for 10 years.
I am afraid of WPP share prices
I was tempted because the shares look budget-friendly, with a price ratio to a profit of about 10.5, and offers a juicy performance of 7.5%. This is one of the highest on the entire FTSE 100. This profile fits many of my recent purchases of shares, but I have to draw a line here.
In addition to its own mistakes, WPP is also at the grace of deep market changes. The most burning is artificial intelligence. The outgoing director of Mark Read recently admitted that AI is “Completely disturbing our activities”. This is a disturbing note for the boss.
AI tools now allow companies to generate inventive internal content, potentially reducing the demand for time-honored media agencies. While WPP was an early adoption of technology, I am not convinced that it can overtake the curve.
He has already lost its crown as the world’s largest advertising company according to revenues in France Publiccis. Now it faces re -pressure from the ongoing merger of USD 13.25 billion between the rivals from the USA Omnicom AND Interpretation group.
WPP is not in a free fall. The Q1 results published on April 25 showed that the reported revenues dropped by 5% to 3.24 billion GBP and only 0.7% lower in a similar form. But the direction of travel remains unclear and I prefer to avoid enterprises during existential passage. The up-to-date general director, after designation, must do it well.
Woodafone also triggers me
Another supply I have avoided for a long time Vodafone (LSE: VOD). I have been writing about a telecommunications giant for over 15 years, and although his massive dividends have often tempted me, a relentless decrease in the stock price kept me along ARM.
There are reasons to be more positive today. The Margherita Della Valle CEO implementation plan makes more evident progress than previous efforts, and the price of Vodafone shares has increased by 7% over the past year.
Yes, the dividend was reduced by half in March, but the actions still offer solid performance of 5.1%, which is convenient above the average FTSE 100.
All -year revenues increased by 2% to EUR 37.4 billion, and another redemption of shares by EUR 2 billion raised sentiments. The combination of Vodafone UK with three should also unlock operational benefits.
But it is still a brutally competitive sector. Vodafone faces the margin of budget-friendly rivals in key markets. And although it reduced the net debt by EUR 10.8 billion in 2024, it still owes EUR 22.4 billion. It’s grave luggage because interest rates turn out to be sticky.
He must continue to pump billions to 5G infrastructure and fiber optic infrastructure, while fighting in Germany, despite investing EUR 20 billion there.
Vodafone shows signs of life, but like WPP, I don’t want him to get closer to my portfolio.
