Numbers were in line, but the stock is still expensive vs comps. Adidas has had a spectacular rally based on the fact it was trading on trough margins that could certainly be improved, and that the multiple discount to Nike on that basis wasn’t appropriate. However that gap has now narrowed and Adidas op margins…
RYA is a great business. It has industry leading cost control and margins, and is now repositioning itself to improve the quality of its offering to compete with EZJ. But there is also a lot of good news in the price. The sector is loved. The oil price is supposed to be a windfall in…
Tavares continues to deliver his “back to the race plan” in style. We used the weakness in Jan as another BUY opportunity or to open a position as February numbers we believed would surprise to the upside. We felt it was still cheap on an EV basis and believed they continued to build up a…
Post emissions scandal investigations from the French government wiping 2.5bn EUR off its market cap we initiated a trading buy. By our calculations the worst case scenario was 350m dent to the mkt cap. We saw this as an opportunity as the mkt was positioned bearishly on the sector and Dec numbers where fantastic. Although…
We advocated selling on the IPO based on valuation, where we thought luxury multiples were inappropriate and organic growth unrealistic to achieve. In the meantime we have been through a period of multiple contraction for luxury names thanks to Chinese, US and tourism weakness. Also fears in the auto space of peak cycle sales and…
UK retailers: Retail Week saying Aldi launching fresh wave of price cuts… UK supermarkets have been very good recently on an unwind predicated on margin improvement. A fresh wave of price cuts would blow this out of the water. Would be selling MRW and TSCO first.
Capital at 12%. No capital worries here as the divi resumes. Non core going the right way and costs flat. Worried about energy? Energy risk below 1% of book value. One to buy today and hold. Unless you think we are going back to mad max times. One of the cheapest stocks in the sector…
In the current market environment, we see +ISP IM / -ISPR IM <5.5% as a good market neutral trade, with attractive risk-rewards potential. We see upside 10-15%, with very limited downside. Conversion speculation has driven the spread for years. Earnings on Friday did not mention anything about a conversion. Since December when the TIT conversion…
KPN formed part of our telco long thesis vs LUX. We still like the stock for its cash return story over the medium term. However until then the stock is looking a little expensive and the results are underwhelming. The developments between VOD & LBTYA in the Netherlands are also unhelpful in the near term….
This morning the daily mail is reporting the CEO is considering selling its consumer healthcare products division. Reckitt Benckiser, Unilever and Procter & Gamble mentioned (Jan. 29) Vague takeover chatter mentioning JNJ as acquirer on twitter. Although we feel this is very spurious it shows the M&A optionality on the name. Added to that you…