We went short at the beginning of December based on short cycle weakness in China, ongoing structural mining issues, dislocation vs miners and valuation. After a 20% move lower we feel that the numbers have been de risked and some of these negatives are more appropriately in the price. With the announcement of the new…
This has been a long for us through the Secret PM since October 22, 2014 on the basis of huge margin expansion. Although margin expansion hasn’t played out the trade has. +57.5% Secret PM Adidas. We now feel it is a trading SELL. The stock is back to the highs on CEO Rorstead hire. Certainly…
Wiped 2.5bn EUR off its market cap post emissions investigations from the french Government. Even if they have to do a software upgrade for 700k cars its probably only 200EUR per car which equals 140m EUR or say a max of 500 EUR per car = 350m EUR. Add to this how bearish autos everyone…
Poor communication meant we wanted to see the print before getting involved. But FY revs +33.5% – 33.8% is inline with the guide of 33-35%, though maybe a touch light of cons, but adj ebit of 96-114m is a beat vs cons 92m vs a tough comp. We continue to think that ZAL is a…
Witty comments yesterday where supportive at the JPM conference . All targets on track . Also may consider spinoffs after Novartis deal integration. This keeps the upside from a break up divestment alive. GSK stand alone is finally returning to EPS growth. So either Witty the CEO is correct and the company performs or we…
CHINA DEC. RETAIL AUTO SALES RISE 16.9% ON YEAR, PCA. Peugeot Citroen 2015 Sales Rose 1.2% to 2.97 Mln Vehicles. PEUGEOT’S Picat says China tax cut aided vehicle sales. Our favourite auto for the last few years and that continues in 2016 for us. We felt that the China car sales would be very good…
TI has proven a volatile stock of late, largely at the moment thanks to its status as a consensus long. We want to take this opportunity to initiate a long as this fits with our current Telco vs Luxury theme. TI is cheap vs the sector at 6.5x EBITDA, with improving fundamentals thanks largely to…
Low free float makes the trade difficult, but margins are kept artificially high thanks to under supply. Hermes is not immune to similar market forces as LVMH, and at 30x earnings it trades at almost a 50% premium to the sector – a big risk. MONACO ALPHA THEMES (TELCO vs LUX) AND NAMES TO…
Loved name within the sector, but actually only achieved 1% growth ex FX in H1, and that benefit will likely have been fully achieved by the end of 2015 given hedging strategies. That leaves tough comps and a difficult operating environment, with headwinds in China, the US and less tourism in Europe thanks to the…
Themes to start 2016: Some of the themes we liked for end of 2015 start of 2016 have played out in Q4, but we stick with them for the start of the year. On the long side we stick with our TELCO theme. None of this is ground breaking, but sometimes the best trades are the…