The Week Ahead (14-18 Apr): US Financials, SBRY, CNC, BILN, HTG

10th Apr by Mark Simpson

4 comments 2064 reads

After the huge volatility of the last week, investors will be hoping for calmer waters over the next week. The reality is that many of the moves in stocks have borne little correlation to any changes in fundamentals. In small caps, the biggest movers have been the popular stocks as individual investors get stopped out or panic-sell on the down days, before buying back into the very same few stocks on the up days. In mid and large caps, in both the US and UK, it is the high-beta stocks that have been seeing the biggest moves, suggesting funds are trading indices rather than individual stocks. If we get a period of US government policy stability, then we will see stocks more rationally priced according to stock-specific newsflow rather than sentiment-driven trading.

Here’s what we can look forward to next week:

Economic Calendar

Monday 14th
Tuesday 15th
07:00	UK	Unemployment Rate
Wednesday 16th
03:00	China	Industrial Production GDP Retail Sales Inflation
07:00	UK	RPI & CPI Inflation
10:00	Europe	CPI Inflation
13:30	United States	Retail Sales
Thursday 17th
13:15	Europe	ECB Rate Decision
13:30	United States	Housing Starts Initial Jobless Claims
Friday 18th
00:30	Japan	Inflation

A relatively quiet week for economic news. We will see inflation data from the UK, Europe, China and Japan. The US and China also have Retail Sales data. It will be interesting to see how consumers in the world’s largest economies have responded to recent US policy announcements.

The only interst rate decision is in the Euro Area. The ECB lowered interest rates by 25bps on 6^th March. At the time, the ECB said:

Staff now see headline inflation averaging 2.3% in 2025, 1.9% in 2026 and 2.0% in 2027. The upward revision in headline inflation for 2025 reflects stronger energy price dynamics. For inflation excluding energy and food, staff project an average of 2.2% in 2025, 2.0% in 2026 and 1.9% in 2027.

However, with oil prices having fallen since on Trump tariff announcements and the economic impact of those on the Euro Area increasing the recession risk, the FT reports that the ECB expected to cut rates again in April and June.

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planetx

11th Apr

Billington

Bit of local intel for you .

I met a customer yesterday whose daughter works at Billington

He was saying how busy they were and had lots of big contracts coming .

I asked if these were already known about or new .

He mentioned a very big contracts at Sheffield forgemasters who are doing some major stuff, I know this because they bought some of my land for this project and i drive past every day .

Id say this is a major major contract win .

Total and pure speculation and hearsay with absolutely nothing substantial to back it up

intuitive6191

"All of these grocers took a tumble in response to ASDA’s profits warning in March this year, as the privately owned company declared its willingness to protect its recent gains in market share through “price investment” i.e. cost reductions."

I am not sure that ASDA has made any recent market gains? Its market share has hovered around 12.6 % for the last 9 months. A year ago ASDAs market share was 13.3 % and two years ago 13.9%.

Kantar, the go to industry analyst for market share has a very nifty website with slider so that market share for all the key players can be compared over various timescales...

https://www.kantarworldpanel.c...

ASDAs recent bold but vague price announcement comes off the back of an ALDI price match campaign. ASDA withdrew from this campaign so make of that what you will. I personally don't think that a new ASDA price campaign will have much effect on Tesco and Sainsbury. Both in my view have the firepower to fight back.

No interest in either Tesco or Sainsbury - but hold SUPR.

Douglas1971

16th Apr

Good Mark, it would be interesting to hear your point of view on Hunting (LON:HTG) trading update today if you have time?

FeatheredCapital

Billington Holdings (LON:BILN) - Agreed, Forgemasters was a large win; however, this is one of the reasons for the downgrade on the 2025 numbers. Due to a redesign, the Forgemasters project has been delayed until the summer next year. This is one of the reasons that Billington have had to look for other 2025 projects at a time where the market is extremely competitive, which is frustrating.

The market is ultra competitive right now because of some economic slowdown but also because of Severfield's struggles. Severfield are desperately hunting for more work and therefore low balling tenders. This cost Billington about £1.2m of profit on one of the replacement deals.

The good news is that Severfield (LON:SFR) are in serious trouble and represent about 16% of the UK steel fabricator market. If they go under then it will be fantastic news for Billington who have tonnes of cash. By contrast, Severfield has a huge debt pile and has an unknown liability for mistakes that they made while fabricating weathered steel for bridges. Although Severfield has set aside £20m+, this is unlikely to be enough.... imagine the cost of replacing a bridge multiple times and then the cost of the train delays caused by the work...

Some contractors won't be working on bridges with Severfield again because of their financial struggles and this is again good for Billington.

Billington's management are conservative and have deliberately low balled the 2025 numbers with the belief that they can improve as the year goes on. There will be a weight to H1; however, a significant amount of profit will come in H2 from higher margin projects.

As you said they are very busy.

Net assets were £53.0 million at 31 December 2024... Market Cap is now £46m... = the shares are far too cheap

The Week Ahead (14-18 Apr): US Financials, SBRY, CNC, BILN, HTG

Economic Calendar

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Mark Simpson

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