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Thomas Cook Group – analysis, or time for catastrophe modelling?
The recent gyrations in the Thomas Cook share price (a +50% surge yesterday and -13% correction today), might have you reaching for your catastrophe models, but its volatility after its latest guidance cut ought not to be that surprising. Combine a volatile top line with low margins, substantial financial leverage and a low rate of […]
Continue readingProsieben – a sub +1% growth stock or just oversold?
Spare a thought for those long suffering shareholders of German commercial TV stocks, RTL and Prosieben as Morgan Stanley dumped on the stocks with a negative report on Friday, sending them down a further 7% and -6% respectively against the DAX index that was up +1%. Presumably it was another rendition of the argument that […]
Continue readingAre you applying the wrong valuation currency?
Prices are set by the marginal buyer, while financial markets establish conformity around valuation currencies that encourage buying, which in turn stimulates more borrowing and therefore more ‘moolah’ for those that dominate these markets. The latter obscures the ‘real’ price that is being paid by the former, which is why they need tools such as […]
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 readingUBM/Informa merger revisited – surprised?
Having fallen out over the plum jobs back in 2008, UBM and Informa are back canoodling, with this mornings announcement of what is in effect Informa’s share and cash offer for UBM. In the intervening years, UBM has chased an earnings accretive, but growth dilutive acquisition strategy in US events while Informa has spun out […]
Continue readingAre equity markets expensive?
This is a regular question posed by investors and market commentators, but in many ways is also the most meaningless. This is because the relative merits of equities as an asset class owes more to the ebb and flow of liquidity to goose demand, rather than some theoretical notion of a ‘correct’ valuation that should […]
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