Liams Last Post : Tough week , Ireland recent weakness presents opportunities ?

Good Afternoon ,

 

As Roy Keane says.....Get over yourself...its over , France are going to the World cup.... but it was a welcome distraction from an otherwise miserable few days in the markets.

 

 This week the US market has managed a marginal positive return of +0.12 % , Europe -1.7% , the UK -0.85% and Ireland down -3.74% .  The Irish Financials were amongst the worst performers , Irish Life down a sorry -26% , AIB -12.6% and Bank of Ireland -10% , CPL resources slipped -9% also and Independent News quietly slipped -10.5% .  On the bright side Fyffes was up 10.5% , Kingspan +3.3% and Elan +2.6% with Total Produce gaining a mere +12% .

 

Sector wise the European Utilites lead the way with a positve return of just over +1% and approximately the same returns for the materials stocks.  The financials were down -1.5% overall followed by consumer discretionary down just over -1% an then IT and Industrial and Healthcare all down just over -.5%   In Europe the Capital markets banks were the worst performers as sentiment swung negatively , Followed by the commercial ones down -1.5% and then the insurance stocks.

 

Containers and packaging were down just under 3% followed by the construction materials and Metals and Mining stocks up +2%

 

CRH has been a huge underperformer and is now starting in my view to be showing some signs of resilience and I think that the risk for portfolio managers who don't own it is rising as we look to a consensus expecting rising earnings from next year.

 

Ireland has been the standout underperformer but is still outperforming year to date and the pull back should be seen as revealing opportunities as one by one the Irish stocks pass the inflection point in their earnings cycle. 

 

Second bite a the cherry ?  look carefully, there are opportunities.... some great value and some stocks which are high quality where the debate rages even amongst ourselves about what multiples you should pay for quality businesses which are cyclical at this point. For Instance stocks like Kingspan which have indicated they are past the bottom,the pull back certainly makes prices easier to swallow.

 

I think that as management team after management team put forward their case that they think they are past the bottom, this pullback should be looked on very much as an opportunity though the intra day volatility is big enough to continue to make investors nervous.  

 

Have a great weekend , We turn our attention to the Ireland vs Fiji match this weekend...it will hopefully be a bit of fun. 

 

 

Liam

 

 

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

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