From 37,000 feet managers of manufacturing businesses have three tools at their disposal to increase business value. First, management can devote resources to develop more bespoke and customer-valued products, these command higher prices and generate higher gross margins. Second, management can improve operating efficiency by closing high-cost capacity and holding less inventory, in so doing…
Luxury backdrop warrants sticking with it! We are wary of participating in a consensus position, but feel that the ongoing deterioration of the luxury backdrop warrants sticking with it. Consensus is looking for 3% organic.FLG will be the important swing as usual. Cons is looking for 1%. Tough comps in Japan following the pre buy…
BMW is trading as expensively as ever at 12x next years earnings. This despite poor guidance in mid April and increasing risks. 2015 guidance of ‘solid’ pretax profit growth, later confirmed as mid single digit growth, is a slowdown. This reflects the ongoing normalization of the Chinese market (20% of revs). Feedback is that BMW…
The sweet-spot for investors is typically a company that can re-invest its profits in expanding its asset base for many years into the future. In doing so such companies compound their shareholders’ capital. HSBC’s $2.6trn balance sheet and presence in 73 countries is thus enough to put off any investor looking for a long runway…
We have liked GSK for a while, however we are pushing again here (currently +5% on trade) Valuation is compelling and expectation for the stock are low given a 30% cut to 2015-17E in 2014 Great dividend of over 5% vs with good scope to increase; UK 10yr pays 1.5%! There is blocker buster potential…
Done very tightly. Was all covered in 2.5hrs apparently Solvency II ratio has been a big overhang for them…this may will be seen as the removal of the overhang and people to look at the capital return story finally They generate 10-15% of mkt cap in cash currently and only pay a 5% divided. Belgium…
There is good reason to believe that right now stock markets in the US and Europe are putting in highs and that going forward high investment returns are going to be just a lot harder to come by. For the past few years stock markets have enjoyed a perfectly proportioned cocktail of low and falling…
BASF has had a great run with the rally in both the oil price and the Dax Into numbers we feel it’s right to take some risk off the table Back on 15.5x earnings we feel the risks in the oil division are more appropriately priced, and ex this area, the stock is trading on…
We have been bullish on this name for a while based on its geographical exposure, valuation and potential opportunistic asset purchases from Holcim/Lafarge The purchase of assets from Holcim and Lafarge for a reasonably 8x EV/EBITDA post synergies gave us some immediate earnings accretion. We took that opportunity to take half the position off We…
As well as improving advertising trends the big catalyst for us was always a special dividend and buyback as TF1’s cash pile grew through disposals Numbers where inline today and the outlook was encouraging The special dividend and buyback finally arrived These where intregal to our bull case. They have now played out and we…