Week Ahead: Persimmon And The Housebuilder Recovery | The Best Company In The World | German Giants

11th Mar by Keelan Cooper

26 comments 3941 reads

Welcome to the Week Ahead, your weekly destination for conversation about large cap and international news. We’ve seen interest in US stocks really tick up in 2024 so we’re looking to expand our coverage of these stocks (especially in the US) in the coming weeks. Let us know which sectors or companies you’d like to see increased coverage of.

It’s hardly surprising that more of our community is starting to look overseas for opportunities. Because the UK remains lacklustre. Last week’s big economic event in the UK (the Chancellor’s budget) had very little impact on the domestic markets as a whole. The FTSE and AIM All Shares were flat week on week, although the 250 (which largely comprises companies with a high exposure to the British economy) crept up slightly.

It will be interesting to see how the same market performs this week when we’ll get a few more hints about how the economy is holding up. On Tuesday the claimant count rate will show how the labour market is holding up, while financial results from housebuilder Persimmon, estate agency Savills and infrastructure group Balfour Beatty (all due this week) could add some colour.

Overall though, the sense is that there is not an awful lot to be excited about in the UK right now. This week we’ll have numbers from Domino’s Pizza which, despite being one of the best performing shares in the UK over the last decade, now fails to garner the same enthusiasm as it once did.

Things are slightly more exciting across the pond where Adobe will be announcing first quarter figures on Thursday. According to our proprietary stock analysis algorithms Adobe currently has a Quality Rank of 100 - that is surely quite appealing to many prospective investors, despite the relatively lacklustre share price momentum of late and an exorbitant valuation (Megan has analysed the stock’s prospects below).

Company announcements to look out for this week

Day

Big UK earnings

US company reporting

EU company reporting

Monday - 11th March

Oracle Q3 2024 earnings
Caseys Q3 2024 earnings

Tuesday - 12th March

Persimmon FY 2023 results

Domino’s Pizza Group FY 2023 results
Genuit FY 2023 results

Kohl’s Corp Q4 2023 earnings

Assicurazioni Generali Q4 2023 earnings

Saipem…

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marczed

11th Mar

"Current expectations ahead of the FY results project a 31.8% sales decline for Persimmon in 2023 to £2.6bn, amid planning hurdles and dwindling demand due to interest rates."

What I hear from many young people that I work with is not a problem with interest rates but rather

perception that modern new builds are of such appalling build quality that they only consider

second hand properties!

wildshot

Thanks for these Week Ahead reports which are a great addition to the site. Since you asked for requests for more US coverage, this is an area of growing interest for me. Whilst I currently don't have a US subscription this is something I aspire to once I rebalance my portfolio to my targeted goals. Coverage of the Magnificent Seven is a very crowded market and I don't think Stockopedia can offer much new in these 7 stocks. I have a watchlist of US listings and companies I'd be interested in reading coverage on include: Copart (NSQ:CPRT) Kinsale Capital (NYQ:KNSL) S&P Global (NYQ:SPGI) Visa (NYQ:V) MasterCard (NYQ:MA) Patrick Industries (NSQ:PATK)

Thanks for all your coverage and resources.

BenHazz

The US markets are full of big names and big volatility. But we hear about a lot of these companies in the media and their share price moves are very challenging to predict. Everything that can be priced in, is already priced in all of the time. Some huge recent gains also make big tech look frothy and there is a lot of potential downside now.

It would be great if we could find someone with knowledge of Russell 2000 or similar smaller cap companies in the US. Companies that are less well covered and may present lesser known opportunities for growth that might not yet be priced in. I suppose a "US Small cap growth report" but obviously with less companies, maybe a handful per week.

Caper4

12th Mar

I really value these weekly reports Keenan and share your view of Adobe (NSQ:ADBE) . ( I hold). What do you think of another quality company Vipshop Holdings (NYQ:VIPS) which enjoys a great Stockopedia ranking Its basically the TJ Maax of China . Of course I realise it’s very unusual in that it sells in China and in the present political climate it’s not exactly the flavour of the month , but it’s an another great company .

Peter171

13th Mar

I would welcome news and updates on the US markets in particular the energy and shipping sectors as over the last 6 months have transferred in vestment funds into those two sectors out of the UK market. Many thanks

FWIW I have been a long term holder of Matson (NYQ:MATX) and also quite like the shipping sector generally.

Keelan Cooper

Hi Peter171,

Thank your comment.

We will endeavour to provide some coverage of the energy and shipping sectors in the coming months.

I recently covered the shipping sector in an article towards the start of this year. There are a couple of mentions of US-listed shipping companies in the comments there.

https://www.stockopedia.com/co...

I believe Zim Integrated Shipping Services (NYQ:ZIM) is actually reporting earnings pre-market today.

There may be plenty of fireworks there, as I believe the short float is currently around 30%. The previous quarter earnings aren't expected to look too great, but it'll be all about the guidance for the year, as it has quite a lot of exposure to spot prices for container rates.

Best,
Keelan

14th Mar

The market seems to be liking the Q3 IG group (LON:IGG) trading update this morning. The shares are up by nearly 5% at the time of writing.

Total revenues for Q3 reached £240.1 million, a slight increase on the prior year period, despite lower levels of volatility. The number of active clients on the platform has also remained stable and was up on the previous quarter.

Interest income met expectations at £35.2 million, with a notable contribution from the US. As highlighted in the article, the Tastytrade acquisition continues to trade strongly and saw record revenues of $62.6 million for Q3, reflecting growth of 8% from Q2.

Year-to-date figures also showed resilience despite market softness, with total revenues at £712.7 million. As a result, the company anticipates meeting market expectations for FY24.

The company will also soon complete its £250 million share buyback programme, potentially paving the way for a new capital returns programme when it releases its FY results in July.

Howard Adams

Hi Keelan and others

I am really enjoying this weekly write up and the broader coverage of the US and European markets. I especially enjoy reading the comments and ideas contributors are posting as it is giving me a new insight into a portion of the Stocko community I have not seen much of before. Many thanks to you all for the posts.

One point I offer is that I have found with the US market, as it is so vast, is to examine options through the lens of a theme. This might be a broad theme such as energy, but more realistically a precisely crafted theme in alignment with ones investing interests. For example, not research a theme of say AI, but rather refine such an examination as say software companies whose prime offering is AI products. Or, rather than just search cyber security companies, narrow the search to cyber security companies whose product focus is cyber security for the cloud.

This type of approach has assisted me a lot to operate quite effectively in the huge US market. To add a tip, I use Google Bard/Gemini to help me find options in these 'sub-themes' and to dig even deeper once some interesting options emerge.

My second offering to this thread, is from a European perspective

I hold a few stocks in this market as I think there are some great companies, but additionally it helps to reduce my portfolio's volatility a bit, by counter weighting the FX and market movements of my US portion of my portfolio.

To this end two areas of focus I have taken are European luxury stocks, then European defence stocks. I find both sub-sectors interesting and my particular holdings are doing quite well.

For those who may be interested I hold in luxury LVMH Moet Hennessy Louis Vuitton SE (EPA:MC) , Hermes International SCA (EPA:RMS) and Kering SA (EPA:KER) . I have held others such as COMPAGNIE FINANCIERE RICHEMONT SA (SWX:CFR) . Clearly there are many others under a luxury theme such as Ferrari NV (NYQ:RACE) which I hold.

For European defence I hold Leonardo SpA (BIT:LDO) and a recent buy Rheinmetall AG (ETR:RHM) . Again there are many other options under this theme if people wanted to research for opportunites.

Sorry for long post, got carried away a bit :(. But some bits might interest some readers.

Regards

Howard

Hi again

Building on the previous post. Here is a real-time live opportunity of why I am currently investing part of my portfolio in Europe.

Because I hold Exor NV (AMS:EXO) I just got a newsfeed through Stocko that a company they contral Iveco NV (BIT:IVG) an Italian trucking company had post good results. Thus share price lifted over 5% today. In the news feed it explaind that Iveco NV (BIT:IVG) is one of the smaller companies in the European trucking sector, listing Daimler Truck Holding AG (ETR:DTG) Volvo AB (STO:VOLV B) Traton SE (ETR:8TRA) as other larger players.

Using Stocko to scan these four it is clear that the European trucking sector seems to be taking off with regard to share prices, also that these companies have low PE s and quite good dividends.

I have been waiting to extend my European holdings into another sub-sector but had not considered at all the trucking sector. On a quick glance this seems a sensible area to dig into more deeply.

I thought I would share this real-time, live experience on the thread, as other comments seem to be quite keen for investing options in either the US or Europe to be shared.

Disclosure: I bought starter positions in Iveco NV (BIT:IVG, because I have done deep research on Exor NV (AMS:EXO) its owner and understand the context of the company. I also bought a starter in Daimler Truck Holding AG (ETR:DTG) to be a pair trade against Iveco NV (BIT:IVG) . Later I will research others to see if a sector lift is really occurring after quite a sustained flat period.

jelnet

Thanks, this was a most interesting read, particularly as I've been wondering about investing some of my ISA in US stocks. I'd also be interested in reading about the use of AI in stock picking and in investment generally, for example could AI do a better job than a human at choosing stocks?

Rusty2

15th Mar

Disappointing quarterly update from Adobe (NSQ:ADBE) shares are down 13%.

Helvellyn

Interesting post Howard, I wonder if this could be taken as a read across for Castings (LON:CGS) who, I think, produce the castings for large truck's turbo housings? I am not that familiar with their business as you can tell !! and I am not sure how large a part of their business this is, maybe someone will know.

The Castings (LON:CGS) sp has been weak lately for no apparent reason as their HY 24 report in November showed very good comparables and the outlook for FY was 'marginally ahead'.

Megan Boxall

Thanks for flagging Barry, I am going to try and find time to take a closer look at these results to check whether the 13% fall might be an opportunity. Another company falls foul of its high expectations.

16th Mar

Hi Helvellyn

With regard to Castings (LON:CGS) I have never looked at that company, but a quick look on Stocko gave me a surprise. Its bps is 606bps. Why might it be so high for what seems quite a pedestrian VQ type of stock.

It is not the sort of stock I would pay attention to, but that bps surprised me (if the data is correct).

I bought some Castings (LON:CGS) this morning, the actual spread, when I bought was around 250bps, ie 8p difference between buying and selling. The published spread was around 600bps. Looking back to July 2023, the bps was 100. Spreads and prices are all over the shop at the moment, that is if you can get a live price.

Indeed but a top up opportunity for me as fundamentals of business are sound and this is a long term hold

Be interested in your thoughts . As mentioned, I have bought more at 495 as believe this is a temporary blip with all the hype on A1 and its possible effects on the company

gmtrader

Adobe is clearly a very strong company. How much of the creative side of the business is from subscriptions of lightroom and photoshop? 63% for this side does seem a little weighted. I know there is a big community out there that use other programs instead of lightroom as they see it as so expensive and do not want to be paying monthly, so this opens the doors to competition. And there certainly is more competition in this space now. Just food for thought.
Nice post Keelan.

I use Photoshop but not the monthly subscription, not keen on that. Quite a few in the UK aren't either. Yes lots of competition. I don't see why people were expecting a big boost from AI. My experience of AI on photo editing, is it does not work a lot of time and does some really weird things. AI does require a lot more memory to work and takes longer. Good for NVIDIA (NSQ:NVDA) as people are having to upgrade their graphics cards or their computers.

I sold out of Adobe (NSQ:ADBE) last year around $517, considering buying back but have some doubts.

Week Ahead: Persimmon and the housebuilder recovery | The best company in the world | German giants

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Keelan Cooper

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