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M&A mantra: When in a hole, keep digging!
M&A in the Marketing Services sector is a bit like archeology; if you find yourself in a hole, keep digging! This is how companies such as Publicis, can propose to invest a further $4bn on another digital marketing acquisition, notwithstanding presiding over an eroding organic top line and sub market ROIC, notwithstanding splashing out over […]
Continue readingOmnicom – yes it was oversold after Q2!
After seeing its shares tumble 10% immediately following its Q2 results, I added a position in Omnicom across a couple of portfolios I manage. It wasn’t that I was won over to the structural growth story for these marketing services agencies, but more a function of two things. Firstly, there is a price for everything […]
Continue readingWPP’s armchair warriors
Markets love corporate activity. Bankers love them as shifting assets around companies earns them big fees. Managements love them because they provide opportunities to earn big bonuses. Investors therefore are encouraged to believe all this will enhance shareholder value, so as to endorse the merry-go-round. How many times have we seen acquisition led growth disguise […]
Continue readingWPP – once more unto the breach
Having traded out of the stock with a +19% relative gain in the run up to their FY17 results, I didn’t expect to get an opportunity so soon to step back into this one, but with the shares approaching 1,200p (closed 1,204p), that is what I am doing. While there isn’t an immediate catalyst now […]
Continue readingWPP – position closed with a +19% relative gain (>+330% annualised ;-)
Add a bit of mean reversion to GrowthRatings, with a healthy pinch of recency bias and you can have a wild ride in these menopausal markets. For example, three weeks ago on this blog I highlighted the unloved Agency sector and in particular WPP. Those listening to what some key marketeers were saying about their […]
Continue readingWPP – friendless & unloved – perfect!
Not all marketing investment seems wasted. After P&G’s earlier withering criticism of its digital marketing ROI, Diageo’s Q2 report yesterday, delivering a combination of rising A&P investment, organic sales growth and underlying operating margins, suggests a more nuanced approach may be needed by investors to the industry’s current problems. Faced with an unsolicited approach from […]
Continue readingRising interest rates may be exposing advertising ineffectiveness
With the WPP share price down -11% on its Q2 earnings release, as FY17 revenue growth forecasts are trimmed along with market estimates for global advertising growth, I thought about writing a long winded post about markets propensity to increasingly aim below guidance towards the end of an economic cycle and in particular while the […]
Continue readingP&G slashes digital spend with no impact – an ‘Oops’ moment for digital!
Those following Alphabet’s Q2 results may have noticed the changing mix driving revenues. While year-on-year organic revenue growth is still comfortably holding above +20% pa, it is increasingly driven by accelerating growth in paid clicks which are offsetting a higher rate of decline in the price per click that it receives. Given the auction basis […]
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