Trading on a sector multiple for above sector average growth following 4 consecutive quarters of improvement. Importantly the under-performance in Germany vs DT has now been eliminated, a key source of uncertainty over recent quarters. The mid term targets put it somewhere somewhere between 5 and 10% EBITDA growth with a fully covered dividend or…
I think SAB is a buy here as well it is the most compelling risk arb trade out there. Trading at a 5/6% discount and you collect the dividend as an added sweeter if they don’t complete the deal by 11th August,you get the dividend. We have done extensive work on the anti trust issues…
A lot of technical selling yesterday related to the tender arbitrage; by tendering your Baxter stock you get BXLT aprrox. 7% cheaper (VWAP period from yesterday to Monday). That put pressure on the spread. However, they are only issuing 13.7m shares, and as a result allocations are likely to be light and flowback minimal. And…
A number of reasons to be short this one: Momentum is slowing. Organic growth of 1.8% in Q1 compares to 7.2% Q1 2015, and 2% last quarter. The US (60% of the biz) is clearly in a mess (see GAP warning and MACYs today) and unseasonal weather continues which is likely to make revenue growth…
A favourite amongst auto analysts due to its restructuring potential and ‘cheap’ p/e multiple. But at this stage in the cycle, how much is left to play for? Arguably the near term restructuring angle is played out post Ferrari spin off. Part of the reason FCA has held up so well was an expectation of…
Very first take a miss across Luxury at 2.6% vs 5% cons, with GUCCI +3.1% vs cons of about 5% on easy (-7.6%) comps and a slowdown vs the 4.7% printed last quarter. Total revs a 2.5% miss, saved by a strong showing from Puma, but that won’t be a surprise given what we have…
Kering has participated in this broader China rally, up almost 10% since LVMH confirmed that FLG growth was actually 2% without some discontinued items. Expectations are quite high for KER. Following the Gucci relaunch in Q3 last year and a 4.8% growth print the market is going for another 5% this quarter. This is on…
Housing data was rather disappointing. Building permits for the US Single family homes – representing the biggest part of the housing market – showed a slowdown. Building permits declined by -7.7% last month, and Housing Starts declined by -8.8% last month. As permits serve as proxy for future construction, it seems that there is a…
Personally I don’t think tomorrows numbers from Tesco will really change the debate. Both were pricing in margins that were too low. This quarter will provide evidence that they were too low. But upside from here requires you being comfortable modelling margins through 3% and given Aldi’s comments recently and Amazon coming into the market…
Now on less than 5.5x 2017 EBITDA vs sector on ~6.5x that’s close to a 25% discount although has superior growth. Some of that discount is the state ownership and rightly so given intervention in the recent consolidation talks. However assuming price rationality from competitors going forward this is a good entry point. The concern…