Hydrogen Economy
24 Nov 2017
China cuts tarriffs on baby formula imports This change was reported by Bloomberg as a potential boost to overseas baby milk suppliers MJ not specifically mentioned but hopefully will benefit. It should make overseas produced formula more competitive in China, where they are highly sought after following the melamine scandal. Regionally MJ shows manufacturing facilities in Guangzhou as well as Thailand and Philippines, but imports from USA or Holland at a premium would likely do better in the market. Trump will no doubt take credit for influencing his new best mate Xi, it should play well with his bovine base.[link] said it will further cut import taxes for a wide range of consumer goods including several categories of baby formula, in a bid to boost consumption. The country’s dairy stocks fell.The average tariffs for 187 product categories ranging from baby diapers to blue cheese, coffee machines and ski equipment will drop from 17.3 percent to 7.7 percent after the cut, the Ministry of Finance said in a statement on its website on Friday. The change will be effective from Dec. 1.China has faced criticism for not doing enough to bolster imports, a move that would help balance the trade surpluses that it runs with a raft of other countries. Commerce Minister Zhong Shan said this month that a range of measures to open domestic markets will be taken to support demand for imports, a move that could help narrow the $327 billion trade gap with the U.S.Tariffs for some types of baby formula were cut to zero, triggering losses in Chinese dairy stocks. Inner Mongolia Yili Industrial Group Co. retreated as much as 4 percent, while China Modern Dairy Holdings Ltd. lost as much as 2 percent in Hong Kong. China Mengniu Dairy Co. slipped more than 1 percent with Yashili International Holdings Ltd.
gamesinvestor
23 Nov 2017
UK value investor view [link] like the similar assessment of Unilever is heavily biased to the downside.Perhaps it's not what it seems and Mead turns out to be a relative bargain.Games
sage in the hills
23 Nov 2017
Lifting ....... but .....Probably just FX impacts today.....weaker $, stronger £ ......?SAGE
Bill1703
22 Nov 2017
Re: Musings ...... "Let's hope it's Google and Amazon, as the other three I have held... Amazon -- probably will be around and probably will be a continual disruptor. It's decision not to declare a profit is largely voluntary and can be achieved if the investment rate is adjusted..."Not sure what the "investment rate" is, Games, something entirely voluntary? There will be other Amazons along, and possibly smarter, more disruptive... though whether they ever get bigger is another matter. And I don't doubt, Amazon will put up a good fight...There will be big changes as each new wave of internet innovation comes crashing, very likely with increasing frequency... some big winners, and big losers. But as to the what, the where, the who... as I said, I wish I knew!But interesting you didn't include Facebook in your list... the most likely of all the current internet giants to come crashing down to earth IMHO (albeit my opinion here is humble indeed, for good reason....)
Bill1703
22 Nov 2017
JP Morgan upgrade to Overweight In a big report, apparently... looks like the reason for the SP spike today, in an otherwise newsflow vacuum.So RB is worth anything from £64 to £90... hmmmm. And it is based - in part - on valuation vs peers, always a dangerous, and inherently circular argument, particularly with some peers still trading on historically very extended levels. But FWIW, edited highlights below: "... In light of the low visibility on earnings and optionalities building up on M&A/disposals we run a scenario analysis to stress test valuation as RB's shares are now trading at a historical discount to peers following earnings cut since Q217. We conclude that a range of outcomes should lead to a valuation range of £64 to £90... While the top end of our valuation range is likely to be weighed on the progress of M&A/disposals on a 12-18 month basis, we see a short term relief potential to £75, hence our upgrade to Overweight...... The creation of two separate divisions is creating options for structural portfolio shifts as we consider a potential disposal of H/H (we argue RB is not the best owner any more given share losses), the potential reinvestment in M&A in Health/Nutrition H/N or the creation of a standalone H/N business, in a category that will keep consolidating over time. Any newsflow on M&A/disposals will likely focus the market on the value unlocking from these options...... we assess fair value around several scenarios: 1) on a standalone basis – which is our core base for now, 2) a potential disposal of HH and buying of Pfizer OTC, 3) a SOTP. We derive a valuation range of £64-90, leaving the risk/rewards skewed to the upside. Over the next six months, a reassurance that EPS is not rebased further (as management presents its new division structure) and a rebound in LFL growth should drive the valuation multiples back to industry averages (versus a 16% EPS discount today) to JPM Dec18 TP of £75. We see further upside to the higher end of the range, although these will be weighed on the progress of M&A/disposals on a 12-18 month view."
gamesinvestor
22 Nov 2017
Re: Musings ...... "Of the five you mention, I'd be prepared to bet that 10 years from now, two (at least) will have sunk without trace"Let's hope it's Google and Amazon, as the other three I have held and in the case of Microsoft for a very long time, PayPal looks like it has a long way to go -- Apple, I probably won't be holding it forever.Amazon -- probably will be around and probably will be a continual disruptor. It's decision not to declare a profit is largely voluntary and can be achieved if the investment rate is adjusted. -- what that will do to the share price is anybody's guess.Games
cudntpikmynose
19 Nov 2017
Re: Musings ...... Lovely bit of writing. Bill. Never leave us Bill not without a warning at least, if only LK was around.
valeite
18 Nov 2017
Re: Musings ...... as they say .'..past performance is no guide to the future'
Bill1703
18 Nov 2017
Re: Musings ...... ".... so many examples of this aren't there? Next looks like one.... A modest rise would do me... GSK... Lloyds Bank; TheAA; Centrica, SSE, National Grid -- these were all blown up and possible have permanent air let out of them now.... The supermarkets look destined to live on much lower ratings, and possibly the pubs.... Pearson looks doomed to be a low rated stock -- is that also possible for WPP and Royal Mail?"A "new reality" perhaps Games, or maybe only that "reality" is an ever-changing assessment, and can look very different from one month to the next, let alone years. Economies cycle up and down, companies rise and fall in longer duration, but equally inevitable secular cycles, and the market (and by definition, the investor consensus therein) changes it mind - and mood - on a dynamic and indefinite basis. Put all these "cycles" together and it explains why you get such wild swings in stock prices and valuations, even for supposedly predictable businesses.Yes, can't see NXT getting back to £80 any time soon... but who knows, next year everything could look very different? Or the year after that - and as you say, you don't need it to get anywhere near to be a rather "good" investment - for you. It's the flip side of the situation with someone buying RB at £81 - a "good" company, no doubt, a great track record, for sure... but when do you start earning a good long-term return on your £81? It might well take the kind of patience that most investors claim to aspire to, but few in practice actually have.Some stocks should probably always be on low ratings... doesn't mean they will be "bad" investments, depends what price you pay. And companies are dynamic entities, never standing still, run by people in a hurry - good management can make all the difference in the most moribund of stocks, but the converse also goes for bad management, or bad decisions...."... there are loads of good companies still out there - PayPal, Microsoft, Apple; Google; Amazon..."There are those that look "good", as of today, for sure... but next year, or next decade, it will quite likely be a different assessment. And easy to make the mistake of seeing a stellar stock going up in a straight line and assuming it defines a "good company"... There are plenty of genuinely "good" companies currently in the doldrums, with their markets disrupted, or possibly merely under a cyclical cloud, or just undermined by entirely external events outwith their control (eg. Brexit). Of the five you mention, I'd be prepared to bet that 10 years from now, two (at least) will have sunk without trace, or as good as... but as to which two, I wish I knew! But it would be remarkable for really just the first wave of post-internet "winners" to survive the onslaught of future waves, each of them washing away a fair chunk of the existing establishment on the beach. Disrupters become themselves disrupted, in markets they helped to show were disruptable... their very success begets their ultimate fate. There was some good analysis recently (might have been Kingham himself?) which showed why Amazon not only doesn't make a profit, but will never be profitable, structurally and unavoidably. Does it matter? Not thus far, and not today.... but it will one day. Emperor's new clothes? I have no idea when it will be, or how much higher up, but you don't want to be holding Amazon stock when that particular emperor's nakedness is finally conceded....
gamesinvestor
17 Nov 2017
Re: Musings ...... ""base" for future performance, without fully considering the question of whether it might prove to be the sort of exceptional spike that most shares will "enjoy" periodically. "Bill there are now so many examples of this aren't there?Next looks like one -- I'm in it but at a very low level - it's always looked very expensive until now and I don't expect it to return to previous heights, unless I misunderstand the situation. A modest rise would do me.GSK - is this also destined to have a lower rating perhaps?And John Kingham's belief that Unilever is worth £23 (and I think you are at £37). Lloyds Bank; TheAA; Centrica, SSE, National Grid -- these were all blown up and possible have permanent air let out of them now.The supermarkets look destined to live on much lower ratings, and possibly the pubs, although every time I walk past (he lied) a Fullers pub it's alway packed to the gunnels.Pearson looks doomed to be a low rated stock -- is that also possible for WPP and Royal Mail?Perhaps we are welcoming in a new reality now that QE has failed and interest rates want to rise a bit more.Games - still there are loads of good companies still out there - PayPal, Microsoft, Apple; Google; Amazon (not many this side of the pond though).
sage in the hills
17 Nov 2017
Re: New members to BoDs......Bill Maybe, as you say Bill ......and all will be revealed........nice to see the sp touching 6400p again today ; have a nice weekend 
SAGE
Bill1703
17 Nov 2017
Re: New members to BoDs......Bill Thanks for this clarification SITH.But as far as I can see, actually, no new BoD members? They are replacing the non-exec chairman with someone who is already a director... and putting another existing director in charge of the remuneration committee, in place of someone who has probably done it too long (as with the previous chairman). And yes, the double move was separately announced. Plus ca change... as they say in Paris. Probably a small net positive move in terms of corporate governance, but doesn't seem like anything to move the needle at all in terms of strategy, etc. And very unlikely to do that much to clip the wings of a high-profile (and highly-paid!) CEO who some clearly seem to think is excessively powerful... that is fine as long as he is delivering, but history suggests these sort of leaders can go quite quickly when they stop delivering. MJ could easily prove his Waterloo... ?Otherwise, there is some comment about 4 of the top 10 senior managers (note, not necessarily directors) leaving the company, but difficult to see anything by way of RNS confirmation, suggesting most / all are not THAT senior? Interesting, for sure, but could be a number of reasons for the departures - though probably some linkage to the recent restructuring of the business into two operational entities?
sage in the hills
17 Nov 2017
Re: New members to BoDs......Bill SEPTEMBER 19, 2017 Scheherazade Daneshkhu, Consumer Industries Editor 0 commentsReckitt Benckiser has bowed to shareholder pressure by replacing Adrian Bellamy, who has chaired the company for 14 years, and the head of its remuneration committee.The consumer goods group announced on Tuesday that it had appointed Christopher Sinclair, who joined the board two years ago and has held senior positions at PepsiCo and Mattel, the US toy brand, to replace Mr Bellamy.The shake-up follows a management upheaval this month, when it emerged that four of the group’s 10 senior managers were quitting for a variety of reasons amid analyst fears that Reckitt was set to miss its already downgraded target for revenue growth this year.Judy Sprieser, head of the remuneration committee for the past 13 years, is to be replaced by Mary Harris, who joined Reckitt’s board two years ago.Investors have for years criticised the length of tenures of Mr Bellamy and Ms Sprieser, who presides over the committee that determines the remuneration of Rakesh Kapoor, one of the best-paid chief executives in the UK.They were most vocal at Reckitt’s annual meeting last year, when Mr Kapoor apologised for the sale of deadly disinfectants in South Korea that had been linked to the deaths of more than 90 people.ShareSoc, an association of individual shareholders, said at that meeting that Mr Kapoor’s 2015 pay packet of £23m was “indefensibly high”, while the Railways Pension Scheme voiced “significant concerns about the quality of board governance”.Samuel Johar, chairman of Buchanan Harvey, London-based headhunters, said on Tuesday of Mr Bellamy: “The move was overdue — six to nine years as chairman is more in line with best practice for a company of this size.” Mr Bellamy, 74, who lives in California, is to step down at Reckitt’s annual meeting next year.RecommendedJAB cuts Reckitt Benckiser stakeLex - Reckitt Benckiser: four gone conclusionReckitt chief tries to find formula for Mead Johnson growthDuring his tenure, Reckitt, whose products include Nurofen painkillers, Dettol disinfectant and Durex condoms, has delivered a total shareholder return four times greater than that of the FTSE 100 and employee numbers have more than doubled to 40,000.However, revenue growth has slowed sharply more recently after a series of one-off problems, including the South Korea disaster, a cyber attack in June and the failure of a Scholl footcare launch.JAB Holdings, Reckitt’s biggest shareholder, last week said it had further reduced its stake in the company, to 7.9 per cent from 8.9 per cent.Iain Simpson, analyst at Société Générale, said the timing of Mr Bellamy’s retirement was “unfortunate, coming in the same month as four RB executive board members departing and JAB selling down another 1 per cent of its stake. This news . . . may prompt further investor nervousness into third-quarter sales on 18 October.”A growing number of analysts believe that Reckitt is likely to miss its 2 per cent revenue target set in July after the cyber attack, which it cut from 3 per cent.Mr Sinclair, who also lives in the US, was until recently chairman and chief executive of Mattel and previously head of PepsiCo’s food and beverage division.André Lacroix, Reckitt’s senior independent director, said: “The process to identify a successor to the chairman began some time ago . . . I am delighted that this process has now culminated with the appointment of an exceptional leader to carry on Adrian Bellamy’s work.”Reckitt’s share price fell slightly on Tuesday — by 0.2 per cent — in early London trading to £68.18. They are down 6 per cent over the past 12 months.Copyright The Financial Times Limited 2017. All rights reserved.SAGE
Bill1703
17 Nov 2017
Re: Musings ...... "Because the sp has dropped 20% approx... This must be all the bad news / difficulty out there now ?... The MJ project has been debated / put in place etc ? ...Life goes on ? .....people buy products ?"Maybe, maybe not SITH... many of their markets remain challenging. People will continue to buy products, but maybe not quite as many, and not necessarily buy them from RB, with an increasing preponderance of (mush) lower priced own-brand alternatives out there.I am sure there will be at least some good news coming on MJ - possibly on accelerated cost savings from earlier integration, etc, at least that is fully under their own control. BUT unless there is a remarkable turn-around in MJ margins and hence profitability in H2, it is likely they will face some uncomfortable questioning - and negative media commentary - on the price they paid, and therefore the overall judgement of the deal, when we get to FY stage, only a few weeks away now (well, 3 months or so). And I think some have made the mistake of "anchoring" to the £81 SP achieved (briefly) a few months back... it is easy to immediately jump on it as the new "base" for future performance, without fully considering the question of whether it might prove to be the sort of exceptional spike that most shares will "enjoy" periodically. After all, it was down below £60 as recently as early 2016, and never managed to sustain anything above £50 until into early 2015.... no reason I can see why £61 isn't a more reasonable "base" than £81?I am playing devil's advocate, SITH, at least partly... you could be right, it may prove all upside from here, and I think the shares are certainly no worse than "fair value" down here, particularly if (as is likely) expectations on MJ have been rebased down to levels from which it should be relatively easy to "outperform" in delivery. But there is nothing magic in the 20% decline figure, other than a nice round psychological milestone... particularly if it is "based" on an unrealistically high, and ephemeral, SP spike. Plenty of shares fall 20%... and then fall a good chunk more, over time. I know it too well, I've owned a few of them in my time...
Bill1703
17 Nov 2017
Re: New members to BoDs...... "...This relates to the well- voiced announcement of 4 Board Directors resigning in approx August/ Sept... Replacements were to be in place between then and December"I am intrigued, SITH, but none the wiser - have looked for announcements to this effect, but can find nothing. Do you have specific details?
