Author: Tristan d'Aboville

Tristan d’Aboville is an Executive Director, Research Analyst, managing the European Research Product. Mr. d’Aboville has more than 16 years of experience in equity research and sales. Since joining the firm in 2012, he has applied his client-centric style with analysts and portfolio managers, anticipating and exceeding their needs. He writes the well-received weekly European commentary, and follows it with a client conference call to discuss findings. Prior to William O’Neil + Co., Mr. d’Aboville was a top-producing salesperson at Kepler Capital Markets, formerly known as Julius Baer, and at Natixis Bleichroeder, covering European equities for large U.S. institutional clients. He started his career as an equity analyst at Aurel-BGC, later moving to Natixis Bleichroeder, where he became the lead analyst for the European Hotels, Leisure and Catering Sector. He was recognized as a Top Analyst for Predictability & Recommendations by AQ Publications in 2003. Extel named him one of the top three European analysts covering the business services and hotel & leisure industries. Prior to the securities industry, Mr. D’Aboville was an auditor with Arthur Anderson. Mr. d’Aboville earned a Master of Science in Managerial and Financial Economics from ISC Paris School of Management. Later, he studied Global Affairs at New York University. He is a Certified International Investment Analyst (CIIA). A sportif, Mr. d’Aboville enjoys kite surfing, sailing, skiing, tennis, chess, and spending as much of his free time as possible with his wife, young daughter, and son.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points:

The Stoxx 600 is still in a Confirmed Uptrend but is now testing its 21‐DMA as geopolitical tension
rises. Energy has been an obvious beneficiary of the U.S.‐Iran tensions and has led gains.. On the
other hand, Transportation stocks have lagged the markets despite huge improvement in the EPS
Ratings.

Our sector rotation chart suggests increasing momentum among defensive stocks. Expect some
consolidation ahead, given the lack of emergence of new leadership.

European Focus List update:

We have added online betting and gaming player GVC Group (

) to our list, since
our last edition.

Actionable ideas on the Focus List include: Airbus (

), Basic Fit (

), Boohoo
Group(

), Dassault Systems (

), Homeserve (

), JD Sports Fashion
(

), Siemens Healthcare (

), and Stadler Rail (

).

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

 

 

  • The Stoxx 600 is still in a Confirmed Uptrend with six distribution days.
  • France, the U.K., Spain, Sweden, Finland, and the Netherlands were upgraded to a Confirmed Uptrend after they reached new highs.
  • Our rotation chart shows short-term momentum ( over 13 weeks ) increasing among Capital Equipment, Retail, and Financials.
  • From the Focus List, we removed Kerry Group ( KRZ.IE ) after it failed to acquire DuPont’s nutrition business.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

 

 

Key points:

  • Four markets, including France, reached new highs on Friday and were upgraded to a Confirmed Uptrend.
  • The Stoxx 600 remains in a Confirmed Uptrend with five distribution days and just one percent off highs. The market is closely attuned to U.S.-China trade developments; however, we believe, going forward we will see a period of comparative stability.
  • Of the 16 country indices, ten are now in a Confirmed Uptrend, three are in an Uptrend Under Pressure. Remaining three are in a Rally Attempt.
  • European Focus List update:
    • We added back Basic Fit ( BFIT.NL ) to our Focus List on Wednesday. Our European Focus List now consists of 43 ideas.
    • Actionable ideas include: LVMH ( LVMH.FR ), Sika ( SIKA,CH ), Kering ( KER.FR ), JD Sport Fashion ( JD.GB ), and Halma ( HLMA.GB ).

European Weekly Summary

Posted on by Tristan d'Aboville

Key points:

  • Clustering of distribution days led to several downgrades among European markets, but the major ones are still upbeat. The Stoxx 600 remains in a Confirmed Uptrend with three distribution days.
  • Sector rotation: Transportation continued to gain momentum but the majority of stocks are now too extended. Despite underperformance of Cyclicals last week, short-term momentum continues to rise, particularly among Luxury names. We maintain our cautious view on Staples.
  • European Focus List update:
  • We removed Leonardo (LDO.IT), Soitec (SOI.FR), and Elekta B (ELKB.SE) from our focus list.
  • Actionable ideas include: Sika (SIKA.CH), Kering (KER.FR), LVMH (LVMH.FR), Stroeer (SAXX.DE), JD Sport Fashion (JD.GB), Givaudan (GIVN.CH), and Halma (HLMA.GB).

Kering

Posted on by Tristan d'Aboville

Key points:

 

  • Shares are is still actionable, trading at the pivot of a 32-week consolidation base. Technical characteristics are still strong with an RS Rating of 90 and an A/D Rating (money inflow) of B ( A being the best ).
  • Fundamental characteristics: EPS Rank of 52, SMR Rating of A. Fundamentally, our investment case is dependent on the soft landing for Gucci’s growth being priced in, Bottega Veneta’s turnaround, and growth and margin expansion driven by YSL and ecommerce.
  • Recent speculation reported by the press about an acquisition of Moncler seems a bit odd, in our view. We don’t believe this transaction will be completed for two main reasons: the rationale behind this deal and the price that Kering would have to pay to acquire the Italian brand.

Dec 05, 2019 – How long can Europe’s uptrend last?

Posted on by Tristan d'Aboville

Although European markets remain volatile following uncertainties surrounding the ongoing trade war, the reemergence of growth sector leadership reinforces that the current uptrend is not over yet. In this webinar, Executive Director, Research Analyst Tristan d’Aboville reveals the best sectors and names to focus on in the region based on our proprietary fundamental and technical approach.

European Equities Strategy

Posted on by Tristan d'Aboville

Key points:

 

  • European Markets Better Balanced for 2020
    • Earnings have bottomed
    • Economic data improving
    • Attractive valuation
  • Key Risks to Our Scenario
    • Trade war uncertainties
  • Growth Versus Value: Growth Likely to Emerge as New Leader
    • Historically, value outperformance doesn’t last
    • Breakouts indicator similar to late 2016
    • Number of stocks on EFL at historic high 
  • O’Neil Top Three Recommendations

European Weekly Summary

Posted on by Tristan d'Aboville

Key points:

A new four‐year high and a dampened reaction to the negative news on the trade
war have given us optimism over the market momentum.

Markets continue to be in an uptrend with some of the distribution days set to
expire.

European Focus List update:

We added Vifor Pharma (

), a health care stock, to our Focus List.

Actionable ideas include: Kerry Group (

), Sika (

), Kering
(

), LVMH (

), Nibe Industrier (

), Siegfried (

),
Dassault Systems (

), Givaudan (

), and Stadler Rail (

).

LVMH Group

Posted on by Tristan d'Aboville

Key points:

 

  • We recommend building positions in LVMH since shares broke out of a 14-week stage-four flat base on November 4. The stock is still actionable ( buyable ), i.e. not too extended since it trades only 4% from pivot ( last line of resistance ).
  • Momentum has been rising, led by the announcement of the acquisition of Tiffany ( TIF ), and is largely reflected in the stock’s improving technical characteristics:
    • RS line is trading near new highs and RS Rating has risen from 85 to 94 ( 99 being the best ) the past two months.
    • Shares have been under accumulation over the past eight weeks ( money inflow ), reflected by their A/D Rating of B ( A being the best ).
    • Other technical indicators have also improved over eight weeks: Up-Down Volume ratio is now at 1.5 ( positive >1 ) and Industry Group Rank is among the best at 16 ( out of 197 ), indicating strong momentum within the Apparel-Clothing Mfg group.
  • Fundamentally, through our lens, LVMH beats its European peers in all metrics:
    • The consistency in LVMH’s earnings growth over the past three years ( stability factor of 3 ) along with its EPS growth ( +24% over three years ) translate into an EPS Rank of 78 ( 99 being the best ), versus an average of 57 for the European Luxury sector.
      • SMR ( Sales, Margin, and ROE ) Rating of 97 is also above the sector’s average of 78.
    • Including the technical characteristics of the stock, the stock’s blended Composite Rating of 94 is second-best in the industry behind Hermes ( RMS.FR ).
  • The integration of TIF adds an attractive long-term growth story, although, in the short term, the $16.9B ( EV ) does not affect our estimates. In this report we review the impact and rationale of this acquisition.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points:

Although European markets accumulated additional distribution days last week,
the move on Friday and today have allayed fears of a change in trend. The Stoxx
600 remains in a Confirmed Uptrend with three distribution days.

Earnings update: Q3 is still expected to be the bottom with earnings expected to
decline 4.7% y/y this quarter before bouncing back 4.8% in Q4 2019. Staples
remain the weak spot.

European Focus List update:

We removed Embracer Group (

) from the list and added Kering
(

‘>

) to the list.

Actionable ideas include: Sika (

), LVMH (

), Korian
(

), Aveva Group (

), Kering (

‘>

), Airbus (

),
Boohoo Group (

), Nibe Industrier (

), Halma Group
(

), DSV Panalpina (

), Gaivaudan (

), Stadler Rail
(

), and Teleperformance (ROFER.FR).