Daily Stock Market Report (Tue 31 Dec): FXPO, WIZZ
Good morning and Happy New Years Eve!
Will the markets look to end the year on a high after what has been a pretty disappointing year on the domestic front...
... but an altogether more positive one overseas.
It's been quiet on the news front for the last few days, but we're still adding to our 12 stocks of Christmas (companies we're positive about heading into 2025):
Mark has also reviewed 2024 through the lens of a value investor. You can read that here ahead of the publication of his four stock picks for 2025.
Companies reporting
| Name (Mkt Cap) | RNS | Summary | Our view |
|---|---|---|---|
Wizz Air Holdings (LON:WIZZ) (£1.5bn) | Commercial agreement | Commercial support agreement with US aerospace group Pratt & Witney while aircraft remain grounded | |
Ferrexpo (LON:FXPO) (£615m) | Letter to shareholders | An emotional summary of the year from the perspective of a company operating out of Ukraine. | |
Netcall (LON:NET) (£180m) | Long term incentive plan | A total of 5.3m shares (3.2% of the total share capital) have been awarded to the CEO and CFO, exercisable from 30 December 2026 and subject to certain performance criteria. |
Ferrexpo (LON:FXPO)
Down 1% to 102p (£615m) - Letter to shareholders
Ferrexpo’s exposure to Ukraine (its iron mines are all located there) made it one of the biggest winners from the election of Donald Trump in November. The shares have climbed steadily since the re-election of a president who vows to end the war with Russia.
Today’s end of year letter highlights the extent to which the company and its people are struggling with the ongoing geopolitical situation. Within the last few months another two members of staff have been killed while serving in the Armed Forces, taking the company’s total loss of life because of the war to 45. Lucio Genovese, executive chair, writes that the company will “continue to support our employees and local communities through the Ferrexpo Humanitarian Fund, as well as offer psychological support for returning veterans.”
Although the letter is mainly one of praise and pride for the Ukrainian people who have contributed to a strong recovery at Ferrexpo this year (which culminated in its re-admission to the FTSE 250 last week), the letter also admits that the first quarter was the strongest for the company. Iron ore prices have weakened since the start of the year meaning the two-fold increase in sales that the company reported back in April hasn’t been sustained throughout the year.
Keelan covered Ferrexpo in more detail in his review of the base metal miners here, summarising that this remains one of the highest risk/reward opportunities on the market.
Wizz Air Holdings (LON:WIZZ)
Flat at 1423p (£1.5bn) - Commercial agreement for grounded planes
For more than a year Wizz Air has had to battle with fleet issues after aerospace group Pratt & Witney grounded its planes and said that 1000 of its engines needed to be removed. That fleet grounding contributed to the bigger than expected drop in first half profits for the Hungary-based budget airline operator, which were reported in November.
Today the company has confirmed that Pratt & Witney are providing commercial support while the planes remain grounded, but no certainty of when the end of the engine woes will come. 40 of Wizz Air’s planes are expected to stay grounded through the year to March 2026.
Wizz Air is attempting to combat these problems by taking delivery of new vehicles, but that brings with it additional pressures as the company’s balance sheet is the weakest in the sector.
Disclaimer
This is not financial advice. Our content is intended to be used and must be used for information and education purposes only. Please read our disclaimer and terms and conditions to understand our obligations.
35 comments
GM it has but the course they are on will end in disaster unless Trump gives them an out, interest rates are north of 20%, inflation just under ten, demographics crashing, most oil markets cut off other than China and India who are hoovering it up at cut prices, infra structure crumbling plus by all counts a lot of the oil infra structure was maintained by Western companies at the point it starts to go wrong not many Russians know how to repair it assuming they can even get the parts needed.
I think you are incorrect about the Russian economy. GDP for Russia has been growing.
But has that not occurred by taking on massive debt and soaring inflation? I could very easily be wrong but all the economic info I have seen point to a deeply unhappy populous with no food, no men to do the work and what is in the shops, they can’t afford. Doesn’t sound like a growing economy?
Never mind the GDP, African gold makes up the shortfall.
Just seen a report on BBC that the US Treasury was hacked. They were using security software by a company called Beyond Trust. Wonder if Intercede (LON:IGP) could benefit from further US expansion as a result - does anyone have any insights here?
Morning Megan,
Interesting chart on various sector performance at start of today’s report. Inevitably it seems my major holding in aerospace & defence BAE Systems (LON:BA.) has gone no where in 2024. It rose to a year high but has fallen back significantly - probably the Trump ‘I will end the war’ trade! To believe Trump and sell, or hold on expecting no end in site. That is the question!!! (apologies to Hamlet).
... no end in sight!
I still hold, FWIW. It's on a fwd PE of 15.2, which isn't by any means excessive.
The thing about Ukraine is that I've heard just about every angle imaginable. Sorting fact from fiction (outright propaganda) is an exercise that I've largely given up on.
If you want to know what Putin thinks, listen to Putin himself. Yes, seriously. He'll tell you. So, I'm looking at a YT video from 1 day ago. with the subtitles "Putin isn't buying Trumps bold Ukraine proposal." "Ukraine's accession will never be acceptable."
It seems that Trump has offered a 10-20 year delay on Ukraine being considered for NATO (which we probably should have offered before the invasion). Putin has rejected this.
You have to remember that Trump has a lot of bluster. He may be a good negotiator, but remember, both NATO and Russia will have a team of expert negotiators. So I wouldn't count on Trump out-negotiating everyone else.
Sarah Paine is a professor of strategy and policy at the US Naval War College. Her analyses are the best you will ever hear. You can check her out on Youtube. This is what she said: Putin doesn't have a backout plan, he has a doubledown plan.
My view? The Russian economy will continue to tank and the US will continue to impose sanctions until Putin backs down, which he won't. It's the ordinary Russians that will suffer, of course. Putin will likely crack down harder on the oligarchy, who will continue to tow the party line or slip a little something into his cheerios.
Let's see how close to the truth I turn out to be.
I very much agree with you mark, on most points. I believe that the Putin era will not produce a lasting, trusting peace, they are in a corner with no credible way out.
Thought Putin would be more a Weetabix man Post Holdings (NYQ:POST)
Regarding BAE Systems (LON:BA.) & other defence stocks, not sure it matters if the Russia-Ukraine war ends soon or not - the NATO equipment cupboards are bare by all accounts, so whatever happens they will need restocking. There are very vocal demands from various un-elected NATO/EU bureaucrats to increase defence spending significantly.
Russia produces approximately 3 times as many artillery shells as European members of NATO, produces hundreds of hypersonic missiles per year, has increased drone production by approximately x23 and generally has expanded military production massively in the last couple of years, all on a budget of about $130b, according to western media reports, which is a fraction of the combined NATO budget of >$1T.
NATO has a lot of catching up to do, which can only be achieved by an increase in spending. It was reported recently that the cost of manufacturing artillery shells in Europe has increased x4 in the last few years, so even an increase in spending doesn't necessarily result in increased production.
Where that money will come from is another matter.
Certainly not from USA I would think, unless Trump can do a deal for the Trump dynasty.
I hold BAE Systems (LON:BA., will top up whenever I'm able. The company has taken a lot of work on with distant completion dates and has increased debt considerably to manage this. I've learned Buffet's point the hard way by selling shares of companies I should never have sold.
What's this, blue markets today? Never!!
A well deserved belated Santa rally - and of course it's only half day today... ;)
Not in my portfolio!!
May see a positive difference come Friday, think I'll wait and see.
Seafox sold another 1.5%, of Gulf Marine Services (LON:GMS) down to 7.8% now.
Roll on them selling out completely
Hi New Investor - unfortunately from the RNS it looks like this is just another distribution in Specie rather than a sale to someone who actually wants to buy the shares. Frustrating I know but these will eventually clear, allowing a true picture of supply and demand to develop. I hold.
Naked Wines (LON:WINE). I don’t know if I’m missing something but their largest shareholder, looks like a German outfit (Investmentaktiengesellschaft für langfristige Investoren TGV) seems to have sold out of their whole shareholding c.12%, seems odd especially as they topped up from 11-12% in early December.
My own xmas quality long-term stock suggestion ...
Hill & Smith (LON:HILS) 1850p PE 14.6, F/FCF 14.0, div yield 2.7%. Avg ROE 12.7%. Interest cover 11.7. Its EPS is 2.4X that of 9 years ago (I use the 10-year summary from the Accounts menu). The Stock Quality score is 97.
Shares have sagged since its quarterly update on 20 Nov 2024, where is reported "full year expectations unchanged." "Revenue for the period was up 7.5% on a constant currency basis and 2% on an organic basis, an improvement on the first half growth rates. Group operating margin was ahead of the same period last year and cash conversion continues to be strong."
I hold.
Unglamorous sector and stock, high/large stock ‘price’ not valuation moreover means this sails below the radar of most private investors.
Hello again Mark. I agree on Hill & Smith (LON:HILS) and bought a week or so ago
Held Hill & Smith (LON:HILS) back in 2022 - think it was a NAPs selection. Bought around £18 but very soon in 2022 hit my stop loss ( c. 25%) an experiment I have now scrapped as many shares that were hitting stop losses bounced back. Having said that had I continued to hold Hill & Smith (LON:HILS) I would only be close to breakeven nearly 3 years on.
It's that huge problem of TIMING if you are not a long term holder. I am nearly 75 yo, so timing is everything (lol)
Yes agree but being a long term holder isn't foolproof either. Unfortunately I have mistakenly held GSK (LON:GSK) for 25 years and it is still valued at significantly less than cost! Even with dividends total return is also close to zero. To be fair though timing probably an issue here too as bought in November 1999!!
Ferrexpo (LON:FXPO) : not your average end year update, not your average company. Slava Ukrainii.
Regarding Ferrexpo (LON:FXPO) , the war will end one day, and I think this could be worth a punt for a big rise sometime this year, but who knows! It was and still is IMO, a quality company.
Confession time ... I bought FXPO in Oct 2024 at 56p. How's that? Well, I was interested in exploring recovery plays.
The 3-year chart looks awful. It's cheap. I set a Stocko alert looking for the Momentum score to break above 19, then bought. It was a risky play, of course, but it seems to be paying off so far.
I noted a few shares like that. BBRY broke M>19 on 17 Dec, share price 973p. Now 981p. Early days, perhaps, but at least it has held up.
BME did likewise on 25 Dec, at 367p. Price is now 360p, and the momentum score is back below 20.
Mark,
How do you set a Stocko alert?
TIA
Type in the ticker code of the company you're interested in, click on "Set Alerts" at the top right of the resulting screen and click on whichever alert you want to set.
Go to the share page you're interested in. There's a button for "SET ALERT" near the top right, below the Stockopedia scores. This brings up the Alerts page for the company. If you're interested in momentum, click NEW in the Fundamental Alerts section, then select the score you're interested in.
To find recovery shares, look for companies with Momentum scores less than 20. That's actually pretty easy. If you expand the FSTE All Share Index tab on the home page, you'll get a list of the stocks. You can sort my increasing momentum.
Take a look through the companies that have the poor momentum. You're looking for dismal 3-year charts. Also give yourself some kind of assurance that the thing isn't headed for bankruptcy. You don't want to be buying the stuff that goes to 0.
Most of the shares in the All Share Index with M<20 look fairly reasonable. That's not so with the AIM All Share Index, which will be full of uninvestable trash.
So, when you've found a goodly list of companies in the doghouse, set an alert for M>19 for them, sit back, play golf, and wait for the alert to be triggered.
Hope that helps.
Recovery Plays One stock that just came to my attention via a random source is Vistry (LON:VTY) , the housebuilder. PBV of 0.57. That's one I've just put on my watchlist, waiting for signs of a momentum pickup.
Although, like I say, the All Share Index tab on the front page of Stocko is fertile ground for this.
Since I've told you my biggest gainer for the year, it seems only fair that I tell everyone my biggest loser: Sylvania Platinum (LON:SLP) , down an eye-watering 44% over 1 year. Ouch.
I bought in March 2018 at 18p, sold half my holding in July 2021 at 98p, and retained half, now at about 42p. I wouldn't necessarily recommend it today, especially since its stock rank is only 60; but it is a low-cost producer, sitting on a tonne of cash, and has a PBV of 0.6. I'll stick it out for now.
Surprisingly Sylvania Platinum (LON:SLP) has been one of my rare success stories in recent years though only because I exited before this years debacle. Was a little late to the party buying at the current price of 42p. However, sold three trances at 65.77p, 115.70p and finally 83.07p so pretty pleased with the result. My biggest gainer in 2024 was an Investment Trust Baillie Gifford Us Growth Trust (LON:USA) up close to 60% but I have had some inglorious failures in the Investment Trust sector - particularly in Renewables and Infrastructure which more than offset any gains from this holding. Went into too many investment trust income plays chasing yield. Then came the 'Truss budget', rampant inflation and the resultant rapid rise in interest rates which have proved disastrous for these sort of Investment Trusts and I failed to exit in time.
My worst individual equity in 2024 was a highly speculative, but thankfully small punt on ENGAGE XR Holdings (LON:EXR) down c. 75%. The Metaverse is clearly not taking off!
As I have had a particularly bad year on my single company holdings (exc. investment trusts which are worse!) I thought I would try a little thought experiment around Stockopedia's stock rank system (QVM). At the start of the year 16 shares in my portfolio (I hold about 30) had a stock rank of 80 or more. This subset returned a negative 8.5%!! In contrast if you had bought the 7 stocks that ended the year in the top ten of the FTSE100 index with a stock rank of 80 or more you would have returned a magnificent 68%. Not sure what this proves but given my stock picking ability even with Stockopedia's excellent data led system I might have been better with Vanguard FTSE 100 UCITS ETF GBP Dis (LON:VUKE) or similar. At least this would have picked up the good and bad and given a better overall result than my current individual equity portfolio. May be in the New Year it will be my portfolio that out performs!