Does anyone know what is driving the rise in SP since October. I note that UPM & Stora are following a similar path and also to a lesser extent is SMDS. My assumption is that the fall in oil prices represents a significant reduction in cost in the supply chain or to operating costs. Anyone know how this industry works?
2 Jan '15
happy new year
Not a very active forum here but for anyone looking in and thinking of investing in skg I would say do it. A very sound business with an excellent cash flow ready to take big steps forward this year. This is a share to put in the basket and leave there for the next 10 years.
11 Dec '14
True, but it really depends on how you look at it. I guess that as a stockbroking firm they have to trade on the fundamentals as they stand, rather than front-running the market. For example, a poor take up of the TLTRO this morning. The ECB is now in a crisis. They cannot meet their commitments without QE (although they may not meet their commitments even with QE, but thats a different story). More liquidity, more risk taking. And this stock seems to accentuate moves up and down in the markets. Its already on the move up this morning based on a belief that QE is on the way. Selling seems to me to be a mistake. And thats not including al of the facts you just outlined about the strength of the company; debt paid down, strongly generating cash and incredibly well run.
10 Dec '14
RE: Cantor Fitzgerald
Nothing wrong with their reasoning. I suspect plenty will be heading for safe havens. There's a lot of uncertainty out there. On Venezuela. Its more or less gone. Bankruptcy a near certainty at this stage.. even though its been well flagged and probably in the price all ready there may be a bit ok a back lash against any companies involved there when the inevitable happens. No issues with their views on Europe either. Deflation is almost certain here and growth is completely stalled. There again thats no surprise. Prices will be under pressure for 2015. However they will be less detrimental because of the collapse in oil prices. Skg's costs are going to have huge savings because of oil in 2015. Possibly longer as they hedge forward. Packaging is on of the big winners when oil is cheap. All in all if you want a safe place cash is the only place these days. If I needed the funds invested in skg I would definitely consider selling. I'm up 160% so maybe I'm even been greedy. But I am happy here for the long term. This is one of the companies you dream about investing in. Solid on all fronts with serious cash generation possibility. Definitely one for the long haul.
10 Dec '14
Based on our top-down view about economic slowdown in Europe, we are removing Smurfit Kappa from the core portfolio over concerns that slower economic growth could impede profits  In our view, slower growth in the Eurozone could hamper the company’s ability to pass through price increases, and could affect demand  We retain the proceeds of the sale in cash, which now stands at 13% Comment: The financial position of Smurfit has dramatically improved in recent years, as the balance sheet has been transformed by a significant reduction in debt; however, the underlying economic situation in its primary markets is fragile in our view. Eurozone GDP growth is forecast to be just 0.8% in the first half of 2015, and the risk of disinflation is a serious concern in the single market. Economic data in the region continues to deteriorate, for example both French Industrial Production and Manufacturing Production coming in below expectations this morning. We have always had concerns about Smurfit’s operations in Venezuela, given the volatile nature of the country and the uncertainty surrounding government policy. Lower oil prices add to our concerns about the Government’s ability to fund its activities, and the potential for the assets of foreign companies to be seized. We will re-examine the position once the economic landscape in Europe firms up satisfactorily
1 Dec '14
Smurfit Kappa Credit where it is due Both Moody’s and Fitch have upgraded Smurfit Kappa’s credit rating. Moody’s has increased the rating to “Ba1” from “Ba2” and Fitch has upgraded its rating to “BB+” from “BB”. These ratings are the highest “non-investment grade” ratings possible and are exactly in line with those targeted by the company. The Group CFO noted that the progress on this front reflects its consistent operational performance and free cash flow generation through the cycle supported by geographical diversity and focus on cost efficiencies. It is encouraging to see the strong progress made by Smurfit Kappa recognised by the ratings agencies. In addition, it is interesting to note that the company has achieved its stated credit ratings target in advance of a period in which we expect significant cash flow generation highlighting the firepower at the company’s disposal for capital allocation.
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.