Labutes IR

Long/short equity, mutual fund manager, foreign companies, banks
Labutes IR
Long/short equity, mutual fund manager, foreign companies, banks
Contributor since: 2012
Just got even more cheap today. In my opinion you should be patient and wait, a better entry point may appear during 2016...
A short-term rally may indeed happen because of what you said but regarding a more reasonable valuation (let's say closer to 1x book value), it will take some time and probably a capital raise in the meantime.
I also think that DB could have an enormous upside if management delivers on its targets, the issue is that the market will only pay for that when results turn to be decent and that should not happen before 2017 or 2018.
Not really, my recommendation was to stay out/short DB
I don't think EUR/USD is a major factor for DB's stock price, although it is much more relevant for US investors when deciding to buy European shares.
thanks for the feedback. I see your point, the dividend is quite stable and safe but is not very high and has been unchanged for the past years. However, they have a new CEO since May and its probable that going forward the dividend policy may be more interesting.
Thanks for the feedback.
Regarding immigration I think it is a plus that can be positive but the investment case was already positive before this recent crisis, thus it is not because of it that German real estate is interesting.
I don't follow Nordic countries closely but housing prices have increased a lot there over the past few years, especially in Sweden and Norway. Compared to Germany it is much more probable that a bubble may be forming...
Thans for the feedback.
Regarding your questions, see this link
Instead of my predictions you can see what is currently expected by sell-side analysts (€5 billion net income and €0.80 dps, €0.56 related to 2H 2015).
Regarding the preferreds, it depends on the cost but it may be a good use for its excess capital position, so yes they may do that instead of share buybacks for example.
See this link, related to its London ticker
Hi Guraaf,
Thanks for the feedback. As you know I'm not a big fan of Santander right now, I think Intesa, Nordea, KBC or ING are better investments and if you have a lot of one stock it could be prudent to diversify a little bit
Hi SS,
Thanks for the constructive feedback. My short thesis is much more based on short-term issues than long-term fundamentals. I think that if Santander boosts its capital and Brazil recovers it could be a great buy for a 5-year investment. However, over the next 6-12 months I think it will continue to suffer from negative sentiment due to the facts I've analyzed.
Hi Guraaf,
Thanks for the feedback. See my recent articles on AXA and Ageas, for instance.
My source is this:
Hi, thanks for the comment.
Yes that is always a drawback for foreign stocks, in this case the withholding tax rate is 30%.
See this link for more information
Thanks for the comment. Regarding (1) yes, I think that is one way Fiat may go to end dividend restrictions and may try to do it until the end of this year. Regarding (2) I think this plan is more like a "stretch goal", I think they believe in the plan even though the likelihood of perfect execution is low.
Fiat is undervalued but I don't think it has to do with low wall street coverage, because there is plenty of coverage from European banks. The issue is that Fiat has a leveraged balance sheet and the plan does not address properly how it will deleverage. I think the market is pricing a capital increase down the road, justifying Fiat's current undervaluation compared to its peers.
Thanks for the feedback.
Good point, I've focused on reported earnings but taking into account non-recurrent items and pro-forma earnings it may give a better picture of "true" earnings. Clearly FCA is undervalued, even if one does not completely believe on medium-term targets.
Thanks for all the positive feedback
Yes, you're right sorry for the typo
Thanks for the feedback
Even if the government decides to reduce its stake, it will continue to be the majority shareholder (>50%), so it may increase the share's liquidity but fundamentally it does not change STO's investment case.
COP may be a good alternative indeed, I'm researching it and it yields about the same and has a diversified asset base. I'll much likely publish an article on COP soon.
I agree, VW is the best car maker in Europe and its valuation does not make much sense. If the European car market rebounds, VW's upside potential is quite high.
Thanks for the feedback. See my previous article on Volkswagen, it is a few months old but the investment rationale is still valid:
It may be one reason given that Hyundai's production is still too much based in South Korea, if they go into war with North Korea it will certainly hurt their ability to fulfill customer orders.
Good article. BME is a good income play, and with increased concentration within the industry sooner or later it should be a takeover target.
edexter, thanks for the comment. Indeed, the business in Iran is risky but MTN is well diversified and Iran only represents about 9% of its revenues.
CEDUP, see the first graph. The group structure is quite complex. VW owns Porsche AG, but Porsche SE is VW's major shareholder. Indeed, China has become VW's biggest single market, but Europe as a whole is still VW's major market.
Thanks for the comment. Because the European auto market is very weak and VW still sells around 35% of its vehicles to Western Europe. I think until the outlook doesn't turn brighter for Europe, VW will remain undervalued. However, this may also present an opportunity for those willing to wait.
Yes, I agree with you that the question is valuation. What I am skeptical is that the worst is behind for FTE. But I have to do more research on that, to have an opinion supported by data.
Thanks for sharing your thoughts. I'm considering doing a more detailed analysis of FTE, focusing on its domestic division. I think it is the company's weakest link, and crucial to a re-rating of its stock.
At least, before using someone's else graphics, you should ask permission....
No trouble, I like to discuss different opinions and your point on relying on cash flow instead of earnings is very valid. Although I don't think the worst is over for FTE, I may be wrong and in that case the upside potential will be huge given FTE's undervaluation compared to peers.
Another point, don't you think 5 stocks is not enough to construct a diversified portfolio? Although I also don't like to buy a lot of stocks, I usually target at least 10-15 stocks (long and short) for my portfolio.