Monday, 16 September 2013

Losers - anything interesting this week? (part 1)

Regular readers will know that I am more of a 'buy low, sell higher' sort of investor.  Generally this makes the weekly data dump in the Financial Times highlighting the recent losers in the FT Global 500 index a must read.  What does this week's graphic show?

Readers of my weekly trade recap post on Saturday will have seen that I added to both gold (my preference being Randgold rather than Goldcorp or Newcrest) and BG Group shares during the last week.  I note - post the Summers exit - that Newcrest traded up 4%+ in Australia early this morning.

Four names capture my attention immediately - Sanofi, Teva, Intuitive Surgical and some small company called Apple.

I have written on Sanofi before and concluded in my previous piece that the share was not going below the important resistance/support level of Euro70.  I still think that is the case. 

Over the weekend, one story did break about the company which is worthy of some analysis.  This appeared in the Weekend FT :

From a purely financial engineering perspective the buyback of a 9% stake (equivalent to a little under Euro9bn in value) would be good news at the current low interest rates.  It would also be a statement re the company's perception regarding the value of the share / relative value versus other investment/M&A opportunities for a large pharmaceutical group. 

The link above to my previous Sanofi research indicated challenges and opportunities but they are fortunate having good franchises like diabetes which will help generate prospective organic growth. 

I stick with the view that Euro70 is an attractive risk-reward level for the shares.  On day 1 post Summers resignation from the Fed race, this is not relevant, but if a few bad days are strung together in the near-future, it is a level to be well aware of. 

Parts 2 and 3 will review Teva, Intuitive Surgical and Apple.

1 comment:

  1. Buying low is the way to go. Why buy high and watch the price descend? I favor buying short squeezes the way Icahn picked off Ackerman's HLF shorts. makes it easy. Current short squeeze position is BTH.