Wednesday, 29 July 2015

Financial Orbit wrap 28/07/15

Five sentences or graphics which sum up the Financial Orbit output over the last 24 hours across the website, twitter account and anything else thought about...

1. Junk bonds - clear direction in my fixed income value.

2. After results a few thoughts on the agricultural machinery company Agco (link here): 

'free cash flow continues to be expected to materially improve reflecting working capital, capex constraint and related improvements.
Running all this through, I still see the company on little more than a x10 EV/ebit valuation and generating nicely in excess of a 5% free cash flow yield.  Agriculture remains a positive mega theme for me over time.  In essence I still see value in Agco deeper into the US$50s'. 

3. In the European energy spaceBP talked about all the same aspects as Statoil even noting that they have 'now agreed $7.4 billion of divestments towards the current $10 billion divestment programme'. The critical chart from their presentation deck however were these two (link here):

4. Some interesting insights from the auto/related sector in the US (link here): 

Re the Ford results an interesting aspect to me however was the mild revision up of the 'Europe 20' industry volume...and the mild revision down of the 'China' sales numbers.

The above actually proved to be quite modest compared to Cummins the truck engine and related company who are predicting for FY15e some pretty impressive falls in Chinese/Brazilian demand.  
Even though both companies are near their 52 week lows I am not rushing (same with GM).

5. I listening to the after hours conference calls from Gilead and Twitter...more on these two shortly. 

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