So a few thoughts on some US corporate reporting over the last 24 hours or so.
Boeing shares ended up about 1.5% on the day...and you can see why with the combination of cost cutting and good order flow contributing to the below noted upgrade.
I noted last quarter (link here) that better value was to be found around a US$130 share price and away from Financial Orbit I included the stock in a list of global non-UK names in a Back to school portfolio buy list as the stock was below that level at the time. Given the move (including today) since I would not be aggressively chasing the stock...but also I would not be selling it.
Turning to the consumer space and Kimberly-Clark as noted here I have been waiting for the c. US$101 level but it never comes. Indeed - following a recent run the shares look as if they are potentially triple-topping at c. US$118/share:
I listened to the Kimberly-Clark conference call (top marks for keeping the - still informative - management comments to just 12 minutes) and whilst I was impressed that sales hopes could now be edged up I was a bit disappointed at the lack of pricing progression.
Net net, I can find more interesting things to be doing in the consumer space.
Interestingly at the above linked research for Kimberly-Clark I also talked about Coca-Cola (link here) where I noted some solid progress on cost cutting but a focus on valuation meant that I was still targeting a below US$38 share price to buy the stock. Despite some good progress on price-mix and winning value share across their portfolio plus an annualised free cash flow yield equivalent of about 5%, I heard little to change my mind on the level I am targeting (which still equates to a high teens EV/ebit multiple).
Finally Ferrari (under the wonderful ticker of 'RACE') IPO'ed
...and after being heavily oversubscribed no surprises that it ended up around 6% on the day from its US$52 IPO level
Thoughts? Well it is at a big premium valuation as noted via this excellent research report at a US$10bn+ valuation the company is trading at over x20 EV/ebit
Yes it has grown as noted above at a CAGR of 12% at the ebit line but with only a single digit percent of the total stock listed the classic thinly traded / scarcity valuation is at play at least right now. Let's see some actual corporate numbers and go from there. Today my view is that you can find better value in certain other luxury names - like Burberry for example (link here).