4 pair trades
We briefly comment on four pair trades with a strong momentum of their own.
Long ArcelorMittal – Short Salzgitter
The steel industry is on a roll (barring the Trump tariff mess), so going for the world leader is a no-brainer. Smaller Salzgitter has a stronger balance sheet but does not know how to make its assets sweat.
Long BNP – Short Deutsche Bank
Banks are not in fashion and this trade is obvious but still worth mentioning as the trade momentum remains very strong courtesy of DB spilling further bad news about its Q2.
Long Vivendi – Short Bolloré
This is a tricky one as Vincent Bolloré tends to surprise markets with initiatives to prop up the value of Bolloré SA with the ultimate objective of gaining full control of Vivendi on the cheap. Recent news about Vivendi’s own operations have been also mediocre except for the valuation of UMG. The trade assumes that Bolloré is eventually cornered by its excess gearing.
Long Inditex – Short Asos
The trade is less conventional than the Long Inditex – Short H&M . It is banking on a reversal of sentiment on Inditex which is every bit as competent as Asos when it comes to online fast-fashion but does not speak about it. On fundamentals, the trade is a no-brainer.
Full investment case is available on our research platform : www.alphavalue.com
Long ArcelorMittal – Short Salzgitter
The steel industry is on a roll (barring the Trump tariff mess), so going for the world leader is a no-brainer. Smaller Salzgitter has a stronger balance sheet but does not know how to make its assets sweat.
Long BNP – Short Deutsche Bank
Banks are not in fashion and this trade is obvious but still worth mentioning as the trade momentum remains very strong courtesy of DB spilling further bad news about its Q2.
Long Vivendi – Short Bolloré
This is a tricky one as Vincent Bolloré tends to surprise markets with initiatives to prop up the value of Bolloré SA with the ultimate objective of gaining full control of Vivendi on the cheap. Recent news about Vivendi’s own operations have been also mediocre except for the valuation of UMG. The trade assumes that Bolloré is eventually cornered by its excess gearing.
Long Inditex – Short Asos
The trade is less conventional than the Long Inditex – Short H&M . It is banking on a reversal of sentiment on Inditex which is every bit as competent as Asos when it comes to online fast-fashion but does not speak about it. On fundamentals, the trade is a no-brainer.
Full investment case is available on our research platform : www.alphavalue.com
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AlphaValue keeps on expressing its doubts about the direction of travel of the European car industry...
Still, it will take only a big-ish nat cat event to remind everyone of why reinsurers exist in the first place.