Liams Last post : see saw day...still like CRH , some ryanair news , INM hit by APN , PWL wakes up

Good Afternoon ,

 

A typical up and down day today with Ireland opening lower , then rallying strongly into the US open which turned out to be the wrong direction , cue the capitulation towards the lows of the day and mid afternoon drifting with international market sentiment the market tracked better as the US clawed backs some of its losses.

 

We came in this morning to see APN results from Australia , the results look ok the commentary seemed fine but the market did not like these an the stock was down -8%  which in turn put pressure on INM who report themselves next week. INM closed down -2.3%

 

We published our formal expectations for the CRH results due next week. Our analyst concurs with my view that at these levels the stock offers significant value. The stock held firm despite the market volatility today. I am ever more convinced that there is at least a decent trade in the short term here and also good long term value. The same probably foes for the sector though as the entire sector seems to be behaving as one. I am happy to accept orders in any CRH look a like if that tickes your fancy either. Lafarge seems to be everyones alternative favourite right now.

 

Ryanair announced another new route , this time from Brussels to Larnaca , This is a consistent strategy now , a typical island tourist destination and it is also a longer than heretofore typical sector length.  The market is beginning to focus on the Ryanair special dividend which is due in September . The stock is on a very high short term yield ahead of it though the stock price will adjust for the divi when it happens. Ryanair have already indicated that they would not be averse to further special dividends if they don't do a fleet deal. The stock looks cheap now on past ratings but is has been de-rated over a long period.  The disposal by O 'Leary of his most recent block of stock is still hanging over the stock and it needs to be fully digested before it can push on. That being said I like the stock here.  

 

The Irish Times reported that the EBS building society will receive bids in days. Irish Life and Permanet and a host of private equity players are looking at this. Maybe it will trigger some interest in the other Irish financials . Bank of Ireland which has done its re-capitalisation remains our preferred stock.

 

Smurft Kappa continued to creep better…. Back into taking profits territory…??

 

Cove Energy which was the sublect of more news releases and multiple interpretations of its news yesterday put out yet another release this morning  after the two releases by Anadarko. This mornings announcement carried a very positive spin dressed up in geologist language. The stock drifted throughout the day closing back at the lows of yesterday.  One to watch , plenty of volume , plenty of rumours…keep watching this one.

 

Aryzta was mentioned in dispatches as being one of the MSCI re-balancing stocks where passive cashflow into the stock should create demand for about 170,000 shares , not huge but it will focus attention on the stock.

 

Origin enterprises reacted yesterday to the fertiliser consolidation bid by BHP for Potash. The stock is cheap and I discussed it yesterday.

 

Paddy  Power jumped +3% today. It has results next week. The news today was that the British Horseracing authority wer going to cancel 15o minor race meetings in the uk to generate better prize funds for the remainder. Story received a mixed reception , William Hill was down, Ladbrokes was up. It is not a sector play , this is a fundamental longterm growth play. I think the management ar very clever. I don't think there will be any disappintent with the results next week. I think that this oen will go and go .. It is the Ryaaor of the Bookmaking industry , a lower margin stryctre which gives them flexibility to steal market share against the incumbents and their branding and product offering is market leading. It is on a roll.

 

Have a good evening

 

Liam  

 

  

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

Tel.: 353-1-2404171

Mob:353-87-2313505

www.merrion-capital.com

Disclaimer www.merrion-capital.com/disclaimer.html

Merrion Stockbrokers Limited (registration no. 307878) is a limited liability company whose registered office is at Block C, The Sweepstakes Centre, Ballsbridge, Dublin 4, Ireland.