Puma

Puma (PUMX.DE) Q3 update – Strong quarter owing
to recovery in America and EMEA

What’s happened? European Focus List constituent PUMX.DE reported
strong Q3 FY20 results, beating estimates in all metrics. Revenue grew
7% (+13% excl FX) beating consensus estimates by 2%. This was driven
by the strong recovery in improvement in the Americas (+20.7% in Q3
versus -45.1% in Q2) and EMEA (+17.7% in Q3 versus -31.3% in Q2). We
recommend that investors hold on to positions as it is extended from an
ideal buy point. Wait for a pullback to the 50-DMA before accumulating

Sadafco

What’s happened? Frontier Focus List constituent SAC.SA reported
mixed Q2 FY21 results today. Revenue rose 3% y/y, slowing down from
Q1 (+17%), boosted by sales of ice cream and consumer milk. Gross
profit margin decreased slightly while net profit grew 8% y/y. We
recommend investors to hold on to the stock and add to positions if it
breaches SAR 197 on high volume.

Britannia

What’s happened? Emerging Focus List constituent BRI.IN mixed Q2 results
yesterday. Revenue grew 11% y/y, missing estimates by 4% while adjusted net
profit grew 34% y/y (adjusting for new taxation rules introduced in September
2019), and missing estimates by 2%. We recommend that investors hold
positions and exit the stock if it breaches INR 3550 price level on high volume

European Weekly Summary

 

Key points from this week’s report:

  • The Stoxx 600 is in a Rally Attempt, trading sideways to its declining 200-DMA. We remain cautious and recommend avoiding adding risk until a follow-through day occurs.
  • The U.K. and Switzerland were downgraded to a Downtrend this week as they breached all support levels.
  • The Swedish OMX 30 remains one of the most constructive indices in the region. From our Focus List, Indutrade (INDT.SE) is actionable. The best-rated names are mainly gaming stocks that have benefited from “stay-at-home” measures (EVOG.SE, SFRG.SE, THQ.SE).
  • We reiterate our view that the market—in the short term—may be led by value sectors (Financial) at the expense of extended growth sectors such as Technology and Health Care. Refer to page 3 for a list of European banks displaying the strongest momentum.
  • Actionable Focus List stocks: AHT.GB, BME.GB, DEN.DK, HLMA.GB, SPX.GB, SRT3X.DE, and STMN.CH.

Cts Eventim

CTS Eventim is the world’s second‐largest provider of ticketing solutions and the
third‐largest company in live entertainment. It is the largest company in Europe in
both segments.
O’Neil Methodology:
 Since added to our Conviction laggards list on June 25, shares have
gained 11% versus 2% for the Stoxx 600, reflecting hopes of easing
measures.
 CTS’ shares are now trading at their declining 200‐DMA resistance.
 RS Rating remains average at 49, and its industry Group Rank is still
poor at 106

Barry Callebaut

Barry Callebaut (BARN.CH) Removal from Conviction
Laggards
Barry Callebaut is the largest manufacturer of cocoa and chocolate in the world.
As a business-to-business company, it serves the entire food industry and
sources one-fourth of all cacao beans produced worldwide. Revenue by
segment: cocoa products, 27%; food manufacturers, 57%; gourmet & specialties,
16%. Barry Callebaut operates globally with Europe accounting for 54% of
revenues, followed by the U.S. at 19%.

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 remains in a Rally Attempt, and we continue to look for a follow-through day to move the index back to a Confirmed Uptrend. Over the past two weeks, action has been particularly constructive as leaderships have emerged, reflected in the increasing number of stocks breaking out of consolidations.
  • In terms of countries, among the 16 indices we cover in the region, eight countries are now in a Confirmed Uptrend. Finland, Switzerland, and Portugal were upgraded to a Confirmed Uptrend yesterday after the first two recorded new highs, and the latter had a follow-through day.
  • By groups, our rotation chart continues to highlight short-term improvement among the Cyclical and Capital Equipment sectors. Refer to pages 13 and 14 for actionable ideas.
  • The O’Neil European Focus List is up 22.7% year-to-date and is currently made of 46 stocks. Refer to pages 2 and 3 for actionable ideas.
  • Conviction laggards: we removed Barry Callebaut (BARN.CH) and reiterated our bearish call on Cts Eventim (EVDX.DE).

Godrej Consumer Products

What’s happened? Emerging Focus List constituent GCD.IN released a mixed
trading update yesterday. The company expects low-double-digit sales growth
in Q2 despite revenues being marginally affected owing to lockdowns. We
recommend that investors add to positions once the stock traces back to INR
721.7.