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Very good results. Even after the great run there's more in the tank here. There might be some profit taking for a while but €25 not unrealistic soon.
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?
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.
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.
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.
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
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.
Dare I say €20 by Christmas. Now that 18 has been broken I think its looking good.
Bit of an up trend setting in at last. Breaking the 18 euro price will be the test.
Any move up for a SP in this overall downturn is a good sign. High hopes for this SP to return to all time highs
I'm beginning to think that they guy in Goodbody's might have been onto something. What precisely happened in the paper and packaging industry today to makes this company worth nearly 5% less than it was this morning? Tesco, in the middle of a firestorm of controversy over their accounting practices, is down nearly 5% today.
same goodbodies guy told me he is bullish on paddy power , i would not be overly optimistic on that company , its pricier than ryanair on a PE basis etc and had poor results two weeks ago or so , all the bookies in the uk are doing terrible at the moment
i own the stock , bought @ 17.55 a few weeks ago , own 150 shares or around 2500 worth also own a grands worth of independent news and media which i bought at 13 cents flat , now there is a stock which lacks liquidity
He is wrong. It had a bit of a glich this year because of the political situation in Venezuela. Still up 12% YTD so what he said makes no sence. My target for the next six months is €22 and a nice dividend. He mustn't read his own company notes either because both my previous posts are from goodbodys briefings. If you have the time do some figures on this and you might be surprised Bob.
i spoke to someone in goodbodys recently about smurfit kappa , they told me it lacks liquidity and that the price jumps around too much they were not overly enthusiastic about it as a buy
The latest pricing data for Europe shows price increases in both the major containerboard grades in Germany for September. Testliner prices increased by €30/tonne, which is consistent with moves seen in other European markets and compares to the €60-70/tonne target. Kraftliner prices have increased by €30/tonne (versus €50/tonne target) representing the first price rise since 2013, while OCC grades remained stable for the month. It is encouraging to see kraftliner grades now reflecting price increases along with testliner grades, which underpins box prices and provides a platform for further growth in 2015. Indeed, we believe the risks to testliner pricing remain on the upside following the unscheduled downtime of one of Europe's largest testliner machines which will tighten inventory levels at a seasonally busy stage of the year. Smurfit Kappa remains the best way to play these positive trends and offers compelling value at current levels with the stock trading at an unwarranted discount to peers.
Palm Group’s 650k tonne testliner mill in Germany has been out of production since August 26th following an electrical failure. Originally the stoppage was meant to last no longer than ten days however difficulty in sourcing spare parts means the mill will not restart production until September 22nd, which will bring the total stoppage to four weeks. The expected paper loss from this downtime is estimated to be 47k tonnes. While this seems like a small amount in a 20m tonne market we note that this represents almost 10% of the European industry’s total average inventory levels. We believe that this will lead to increased speculation on further testliner price increases in late September and October. Palm Group’s operational issues are positive for the overall European containerboard pricing backdrop given the likely pressure that it will put on the industry’s supply-demand balance. At the very least, it should support the €30/tonne testliner price increase already implemented and possibly lead to a push for further increases. We believe Smurfit Kappa is the most attractive way to play these positive price trends and reiterate our BUY recommendation.
Restocking happening in China is sparking a bit of demand in Europe. €60/ ton price increase looks like it could stick. Bottom line looks like it will be very healthy by year end. What skg is going to do with this healthy cash flow will be interesting. Will it be acquisition or dividend?
Oopps. €20 .
Things looking brighter here. Still way under valued but there seems to be a little progress happening now. I have a feeling we could be close to 20c by year end and I would be very happy with that.
Its time management got out there and sold this story. Its a bloddy easy sell so should be no problem.
Buy the Rumour. Sell the really good news. :)
Excellent results indeed, SP did move upwards 1st thing but has come back since. Hopefully its has found a low floor level and a steady move northwards will come in the weeks ahead. Provided general market conditions allow this.
Very good results. Positive in every respect. Dreadful share price reaction thus far. I don't really get this share at all.