Liams Last Post : Grafton and DCC in the news , CRH awaits Vulcan results , Greencore spikes

Good Afternoon,

 

The ISEQ index closed down -0.36% today against another positive day for international markets and a US market which is broadly flat at the close  in Europe.

 

CRH is trading close to the top of its previous range but we await the aftermarket results release from Vulcan this evening to give CRH its next steer tomorrow. I suspect that Vulcan will be bullish and despite the high absolute valuations of CRH that it will continue to be buoyed by sentiment.

 

Personally speaking I believe that the better play is in Grafton. This will come as no surprise to anyone and the price fall of the past week creates certainly a better entry point., The investment thesis was helped today by the appointment of Gavin Slark from BSS as the incoming CEO from July.

 

DCC had the much anticipated earnings upgrade today after the cold snap. The share price was volatile today as the market digested the news. The stock is not expensive but is a one way consensus BUY with all the covering brokers being bullish on it. There is something of a herd view on this one.  DCC is one of my favourite companies so I am not stepping out of the herd. I did raise my eyebrows though at their Capex spend fitting on a logistics centre in London to facilitate DVD and software distribution. Given the speed of change in terms of the APP store I am not so sure that I will ever buy a CD or DVD again let alone a piece of software but the DCC management have been good managers thus far so I hope they continue to be right. There was also some debate about whether they held back something just in case of further consequences arising from the BoilerJuice affair.

 

It is almost tedious now to see Ireland being down graded again and interesting all the same to See Bank of Ireland do yet another debt exchange.

 

Greencore had a spurt today. I think it is potentially very interesting. I suspect it will be more interesting once they make up their mind what way they are going to play the Northern Foods game from here. The more cynical have suggested that this management team are trying to make the company bigger so they can pay themselves more and that laying out the synergies was naïve as the likes of Tesco will have a view on how those synergies are shared between the customers and the shareholders…

 

Have a good evening.

 

Liam   

 

 

 

___________________________________________

Liam Boggan

　

Merrion Stockbrokers

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