2014 Ideas

• Taper is on the tape finally. Taken well and it should be. Given us the clarity we needed. An eventual exit is in sight. Now hopefully it is back down to the fundamentals.
• Inflows into Europe will continue and i believe the macro improves and Europe out performs US
• In Europe it does not take much improvement to turn companies around as we have already had big constructive destruction in various industries
• Small change/improvement will have a direct and immediate effect on EPS. Most PMs expect single digit EPS growth. Expectations are low.
• Return of the capex cycle as as most investors think companies are under invested and % that want corporate cash to be used for capex is the highest since Dec 05 according to MLs FMS
• European PMIs will continue to pick up next year
• Having said that it is not just about buying the market. Stock pickers market call it what you want but as macro stabilises it is less about overall macro and individual/sector fundamentals
• Names that we have been looking at and involved with towards the end of this year and see continued momentum catalysts into 2014

 

BAE: Opportunity to buy into defence which should see a good 2014..US Budget /China/Japan

ATOS: World Wide ipo. Cheap to peers Cap and Accenture

KPN: Tele2 out the way the big bear case. Cheap

CBK: Why buy distressed banks with poor economies behind them? Spain Italy… Cbk can double

RIO: Cost saving/ Capex no m&a diff regime.. ..Cash levels increasing Divi vs bhp. Feb numbers key for this and divi increase

ABB: Cheap industrial clean energy back in focus

PHIA: LED

PHARMA: Basket, Global obesity and China +ve influences

BSY: Very beaten done and hated but the quality of content will shine through…

ING: Story continues as moves back to being a bank.

KBC: 2014 improving profitability and rebuilding to continue

BARC vs. LLOY: Restructuring on track should give some confidence . LLloyds alot more exensive on many metrics