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portefeuille (99.66)

Europe

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14

September 25, 2011 – Comments (18)

On May 9, 2010 I recommended being overweight European equities in this post. In comment #12 of that post I gave this short list of recommendations.

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AXA (CS:FP),
Banco Santander (SAN:SM, STD),
Crédit Agricole (ACA:FP),
Deutsche Bank (DBK:GR, DB),
Erste Group Bank (EBS:AV),
ING Groep (INGA:SA, ING),
Intesa Sanpaolo (ISP:IM),
OMV (OMV:AV)
Telefónica (TEF:SM, TEF),
Telekom Austria (TKM:AV),
UniCredit (UCG:IM).

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On April 15 I wrote this in comments #43-45.

 

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(May 7, 2010 close -> April 14, 2011 close)

AXA (CS:FP) 11.82 EUR -> 15.42 EUR +30.46%,
Banco Santander (SAN:SM, STD) 7.71 EUR -> 8.305 EUR +7.72%,
Crédit Agricole (ACA:FP) 9.06 EUR ->  11.47 EUR +26.60%,
Deutsche Bank (DBK:GR, DB) 45.80 EUR ->  41.595 EUR -9.18%,
Erste Group Bank (EBS:AV) 28.00 EUR -> 35.63  EUR +27.25%,
ING Groep (INGA:NA, ING) 5.51 EUR ->  8.814 EUR +59.96%,
Intesa Sanpaolo (ISP:IM) 2.01 EUR ->  2.198 EUR +9.35%,
OMV (OMV:AV) 24.36 EUR ->  31.225 EUR +28.18%,
Telefónica (TEF:SM, TEF) 15.36 EUR ->  17.81 EUR +15.95%,
Telekom Austria (TKA:AV) 9.17 EUR ->  10.18 EUR +11.01%,
UniCredit (UCG:IM) 1.63 EUR ->  1.712 EUR +5.03%.

average relative difference +19.30%.

EURUSD ≈ 1.447 currently.

EURUSD was at around $1.275 at the "close of European equity trading on May 7, 2010" (see comment #30 above).

performance (May 7, 2010 close -> April 14, 2011 close) calculated in USD and exclusing dividends.

little Europe portfolio: ((1.193*1.447/1.275) - 1) * 100% ≈ 35.4%.
SPY ($111.26 -> $131.56): ≈ 18.2%.

and all 11 positions are currently (calculated in USD) in the green ...

EURO STOXX 50 Price Index (May 7, 2010 close -> April 14, 2011 close) (2500.18 -> 2917.72): ≈ 16.7%, so that little "mostly financials" portfolio beat the index slightly. oh well ... 

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I really don't want to see the April 14, 2011 -> September 23, 2011 performance of that "little Europe portfolio". It is probably around -60% ...

I think it is time though to declare the next period of European equity outperformance. I think a similar portfolio (maybe leaving out the telecom stocks) will gain at least those 35.4% over the next 12 months (again calculated in USD and excluding dividends).

I think I will post a new list, or maybe several lists (Germany, Eurozone, financials, non-financials ...).

 

So the main message of this post is: European equity outperformance against almost any "similar group" over the next few weeks and probably over the next 12 months. As usual I do not have a particularly interesting explanation for my "forecast" ...

18 Comments – Post Your Own

#1) On September 25, 2011 at 1:08 AM, portefeuille (99.66) wrote:

Maybe a decent explanation is that my "virtual fund" (see this post) is met with total indifference. I assume that there are one or two casual followers of that fund left, one of which is probably anchak, hehe ...

http://caps.fool.com/player/anchak.aspx

http://caps.fool.com/player/ac360.aspx

I think the second 100% or so rally of that fund started on Friday ...

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#2) On September 25, 2011 at 1:14 AM, portefeuille (99.66) wrote:

#1 I guess that was not an explanation of my outperform rating on European equities. It is rather something that gives me confidence in the "bottoming" of the virtual fund manager's performance ...

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#3) On September 25, 2011 at 5:30 PM, Frankydontfailme (27.20) wrote:

You sure have cajones recommending European stocks on the precipice of a Greek default. They sure look oversold though...  I'm too chicken to touch anything on the other side of the atlantic. Maybe a Dax index if it gets closer to 4,000 on a panic, or some solid oversold multinationals (Sanofi, Bristol etc).

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#4) On September 25, 2011 at 6:47 PM, anchak (99.83) wrote:

Hans.....I am Short to Medium term Bullish - and DAX possibly seen its lows -for a long time - that doesn't mean - that low will NOT be tested in the coming year or so!

So watch it a bit.....be brave here - but don't be shy to hedge - if it warrants going forward.

 I am hoping you closed a ton of those hedges on Thursday ( US market day) ie Fri your time

 

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#5) On September 25, 2011 at 8:08 PM, JakilaTheHun (99.93) wrote:

Eurozone equities will outperform once the Eurozone nations either (a) push for fiscal integration, or (b) chose to dissolve the Euro. I'll buy in like crazy once I'm satisfied that either of those conditions will be met. 

Until that point, it's like throwing money in the US stock market in 1930.  This isn't "irrational exubburance." This is dysfunctional economics and equity prices won't recover until the dysfunction is removed. 

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#6) On September 25, 2011 at 10:04 PM, Momentum21 (96.14) wrote:

#1 - Still here just waiting out the storm! 

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#7) On September 25, 2011 at 11:46 PM, portefeuille (99.66) wrote:

For the chartists.

This may be a "double bottom".

 

Bayer (BAYN:GY) in Frankfurt trading.



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Bayer (BAYN:GY) in Xetra trading.



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Xarelto® Recommended for Approval in the Prevention of AF Related Stroke and Treatment of Deep Vein Thrombosis in EU

Bayer’s Xarelto Wins EU Drug Panel Backing for Added Uses


Positive Phase III Data on Bayer's Investigational Drug Alpharadin Show Significant Increase in Overall Survival

Bayer drug a "major new player" in prostate cancer

ALSYMPCA data - ESMO presentation - 26.09.11

 

There are currently 1800/120 ALGETA:NO/BAYN:GY shares in the fund with break-even of around 148.35 NOK / 49.79 EUR.

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#8) On September 26, 2011 at 12:04 AM, portefeuille (99.66) wrote:

Bayer closed at 39.42 EUR on September 23, 2011 in Xetra trading. Consensus estimates for eps/dividend for 2012 is at around 5.11/1.78 EUR currently ->

consensus p/e ≈ 7.7.
consensus dividend yield ≈ 4.5%.

 

Algeta in Oslo trading.



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a post on Algeta.

 

I start my new "European equities list" with ALGETA:NO, QIA:GY (QGEN) and VOW:GY.

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#9) On September 26, 2011 at 12:09 AM, portefeuille (99.66) wrote:

I start my new "European equities list" with ALGETA:NO, QIA:GY (QGEN) and VOW:GY.

and AIXA:GY (AIXG), BAYN:GY and DBK:GY (DB).

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#10) On September 26, 2011 at 12:13 AM, portefeuille (99.66) wrote:

one of my better calls.

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#27) On September 08, 2009 at 5:09 AM, portefeuille (99.97) wrote: ALGETA.OL - 9.97 (59.25 NOK) - outperform

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(from here)

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#11) On September 26, 2011 at 12:25 AM, portefeuille (99.66) wrote:

those helpful alpha particles.

http://en.wikipedia.org/wiki/Alpha_particle

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#12) On September 26, 2011 at 1:02 AM, TheDumbMoney (37.72) wrote:

Lots of European stocks are looking very cheap to me, for obvious reasons.  But they are sooo tempting.  The automakers look really cheap to me: BMW, Daimler, and Volkswagen.  Is that crazy of me?

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#13) On September 26, 2011 at 6:39 AM, portefeuille (99.66) wrote:

#12 There are currently 700/140/5100/35 BMW:GY/DAI:GY/VOW:GY/VOW3:GY shares in the fund with break-even of around 60.44/ 58.07/85.24/-646.01 EUR.

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#14) On September 26, 2011 at 6:46 AM, portefeuille (99.66) wrote:

A good thing is that most people in the U.S. know extremely little about Europe (I think even their Europe trips have little effect on their knowledge). Well, I guess they know very little about anything outside their little U.S. themes, hehe (just joking (maybe)) ...

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#15) On September 26, 2011 at 7:41 AM, portefeuille (99.66) wrote:



enlarge

(from here)

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#16) On October 04, 2011 at 12:17 AM, CCharing (89.11) wrote:

#2

What was the indicator that suggested to you that the portfolio/europe was bottoming?  

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#17) On October 27, 2011 at 2:30 AM, portefeuille (99.66) wrote:

#16 No indicator suggested that to me.

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#18) On October 27, 2011 at 2:32 AM, portefeuille (99.66) wrote:

I think it is time though to declare the next period of European equity outperformance. I think a similar portfolio (maybe leaving out the telecom stocks) will gain at least those 35.4% over the next 12 months (again calculated in USD and excluding dividends).

The "outperformance" might take a break soon, maybe today ...

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