Monday, 5 October 2015

Financial Orbit wrap 05/10/15

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. Services PMI day...and it was hardly fantastic, for example there was a pretty clear trend in the Eurozone numbers (four trend 'lows' and only one 'high' - far more important than all the numbers being above 50)...

...and the UK comments were hardly that much better: 

'Weakest rise in activity in nearly two-and-a-half years in September'

2. The US metrics were also disappointing...

Fresh data point to renewed headwind US growth


...and hence no real surprises that the global services metrics were dull-at-best: 

Meanwhile markets keep on pushing back up after the challenges of much of the third quarter. I still anticipate macro challenges but good stock picking scope especially when the quarterly earnings season kicks off (and as this excellent @WrigleyTom graphic shows this week does have a few interesting names reporting): 


3. I get grumpy about yet 'another management team grasps share price defeat from bid approach glory' (link here).  

4. I listen to the Suncor conference call where they announce a bid for Canadian Oil Sands.  Interesting potential deal...the latter turned down two approaches at bigger absolute share price levels in the last year or so, but as the crunch bites harder in the energy space...


5. Good to see a bit of optimism around the General Electric share price via the activist shareholder Trian (link here): 

“Trian believes GE has significant long-term potential and that its implied target value per share, including dividends, could be $40 to $45 by the end of 2017 based on our view that GE can deliver EPS of at least $2.20 in 2018. We believe that the strategy of GE management and the board is broadly in line with our recommendations and we look forward to continuing to interact with management as GE works to expand operating margins, drive organic growth, increase capital efficiency and execute a disciplined capital allocation strategy.” 

That is a big old share price hope.  I like GE shares (as last written up here) on the basis of simplification and return to shareholder scope.  It appears that Trian likes these aspects too - although perhaps inevitably their return hopes (and probably policy prescriptions are more aggressive than ones I would suggest!) 

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