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Major macroeconomic events
In the United States will have the home price index for December and new data weekly initial claims for unemployment benefits.
In Europe, attention will be on February IFO survey in Germany.
Consolidation in the markets after macroeconomic data with negative tone in both the U.S. and Europe with some preliminary data PMI February manufacturing, services and compound in the Eurozone below 50 points. In this sense, we must be very attentive to the evolution of these activity data in Europe were at maximum levels and that would be important to have confirmed that the economic downturn is not as intense as expected.
With respect to Greece and after reaching an agreement, Fitch proceeded to lower the country’s rating to C (from CCC) pointing out that it is a “default” selective, while from Holland is put into question Greece’s ability to meet commitments. Much ado about Greece that will not cease in the short – medium term until the Hellenic country will demonstrate compliance with their commitments.
Other issues included the possibility that Brussels soften the deficit target in Spain (4.4% in 2012 now), although the change would occur only a few tenths would be good for ballasting less growth.
Gamesa entry (20%) instead of Santander ahead of the results that Gamesa has released this morning before the opening. We believe that the titles of Gamesa are discounting a scenario too negative (non-renewal of U.S. aid plan from 2013, removal of subsidies in Spain, where the weight of domestic business is very low (<10%) and the regulatory process more widespread in China, however, maintains a regulatory framework that promotes the growth prospects of the sector). While overcapacity in the sector is affecting the growth prospects of the companies insist that those with a higher technological level, such as Gamesa, are the ones best positioned for the future. We hope to meet objectives Gamesa 2011 and are confident that investors show more optimism after the company has ensured that the orders received cover 40% of the lower range of MWs in 2012 sales of 3.000-3.500e. We output to Santander in the absence of short-term catalysts. We could reverse this change on Friday (close of trading) depending on the evolution of these two companies over the next two days and with the mind of the ECB’s liquidity auction scheduled for Tuesday, February 28.
Major business events
In the United States will present their figures Target(TGT), AIG (AIG) and Gap (GPS).
In Europe, Deutsche Telekkom, Allianz, Credit Agricole, Telecom Italia, Dexia, British American Tobacco and RBS.
Ferrovial in Spain (at the end of the market), Iberdrola, Antena 3, Gamesa, Indra (a closure market) and Abertis.
Close of trading yesterday published results Mediaset Spain (conference today 12:00 CET):
The results failed to meet our estimate of gross advertising revenues (-1.8%), exceeded the total income (+2.2% vs R4e) and far exceeded the operating result after having undertaken a cut personnel costs (-58% vs Q4 10 PF) much higher than anticipated (-30% vs Q4 R4e 10 PF). Profit before taxes exceeded our expectations (+24% vs R4e) while net profit falls with great force (-77% vs R4e) due to the high tax rate (76% vs 25% R4e). Mediaset Spain made an adjustment (PPA amortization of intangibles in Four and Endemol, which does not involve any cash outflow) in the amount of 26.9 mln eur (2 mln eur R4e). See more forex news. The board proposes to pay a dividend of 0.138 eur / share (from 0.35 eur / share in 2011 vs. 0.24 and 0.35 eur eur R4e estimated by the consensus). The payout would be reduced to 50%. In the short term, the weak advertising market outlook and the proposed 2012 dividend cut (0.138 eur / share from 0.35 eur / share in 2011 vs. 0.24 and 0.35 eur eur R4e estimated by the consensus) should weigh on the price. Shares traded at a discount higher (26%) compared to our target price (5.5 euro / share) and we believe that news of program cuts investment in both TVE and regional channels are a catalyst to consider. We reiterate our overweight recommendation.
Gamesa. Q4 reported results before the opening 11. The directive has been revised downward guidance MWs sales and EBIT margin 2012. The new guide is on sale 2.800/3.200 MW MWs, which implies no growth in the lower range and +14% in the top vs 2011 and a review of -7% / -9% versus previous guidance (3.000/3.500 MWs, 3,200 MWs R4e). The EBIT margin guide 2012: 2% / 4% is also below our expectations (R4e 4.2%) and the consensus rom 4% in 2011. We expect a negative reaction of the securities following the announcement of this guide, although we believe that this review and should be largely discounted by the price. Revise downwards our estimates and target price. Recommendation (in financial advice newsletter review). Overweight before.
In the United States met the sales of previously owned homes in January fell below forecasts (4.57 vs 4.66 mln est..). In percentage terms was greater than the estimated growth (+4.3% vs +1.1% e) due to a strong downward revision of the December data (up to 4.38 mln vs 4.61 mln, which is a monthly decline of -0.5% in December / November +5% vs. originally announced). Read more stock market analysis.
The preliminary February PMIs showed overall deterioration from the previous month. Misreading in the Eurozone manufacturing PMI remained below the level of 50 points (49.0 vs. 49.4 and 48.8 and above) while deterioration in the services PMI also took place it below the threshold 50 (49.4 vs 50.6 and 50.4 and above). Thus, the composite PMI in the Eurozone, it maintained its recovery trend and stood at 49.7 (vs. 50.4 above does not meet the estimates thus pointing in 50.5).
Similarly in Germany, the February PMI manufacturing and services failed to meet estimates 50.1 (vs. 51.5 and compared to 51 previously) and 52.6 (vs. 53.9 and 53.7 versus prior), respectively).
While in France, evolution mixed with the manufacturing PMI improved more than expected up to 50.2 points (vs 49 est.. And 48.5 above) and the services PMI to deteriorate at a faster pace than expected 50.3 (52e vs vs 52.3 above) but remaining in expansion zone.
In France, published the CPI January which stood at -0.4% over the previous month (0.4% vs. -0.2% prior and e) and standing-on-year in +2.3% (vs. +2.5% previously).
Yesterday’s session was marked by the negative reaction by the European indices published economic data (-0.83% Eurostoxx, CAC -0.52%, DAX -0.93%, FTSE 100 -0.20%). In Spain, the Ibex index was the worst hit (-1.26%) closing at 8,657 points. Big rise by FCC (+9,58%) reacting to the agreement by the Government to settle the debt of the government, followed by Sacyr Vallehermoso (+3,33%) and ACS (+2,69%). The hardest hit area was the bank, being the People’s Bank affected the value (-4.11%) after learning of the proposition to its retail customers of the exchange of preferred shares convertible bonds. Among the worst values of the day are also Caixabank (-3.51%), Banco Sabadell (-3.13%), Banco Santander (-2.66), BBVA (-2.57%) and Bankinter (-2.22%). Wall Street shows a close European contagion from European data (Dow Jones (DJI) -0.10%, S & P 500 -0.18%).
Amadeus. Post 4Q 11 results on Friday, February 24 before the opening. Held a conference on the same day from 14:00 CET. The market discount income 640 mln eur (+5.3% vs Q4 10), EBITDA 185 mln eur (in line with Q4 10) and net profit (excluding Opodo sale) 80 mln eur (+18% vs. Q4 10). By divisions, Income Distribution (490 mln eur, +5.8%) growth is expected to explain most of the volume growth, while IT provides, income 150 mln eur, vs +4.2% Q4 10) favored by major airlines migrations that occurred in 2011. We hope that the board confirmed its forecast to continue gaining market share worldwide in distribution and good prospects for migration of large companies provided in H1 12 (SAS (Xetra: A1C0DX – news), Singapore Airlines (SES: C6L.SI – news) and Cathay Pacific) continue to give high visibility to forecast growth for the group in this division for the coming years. Trading at attractive multiples Amadeus (EV 7.5 x 12e, 12e 11x PER) although we believe that securities could be short-term pressure on expectations of a sale total / partial shares some investors (Air France (Paris: FR0000031122 – news)?). We reiterate overweight.
People (Berlin: PP4.BE – news). Conduct a swap of preference for compulsory convertible subordinated bonds newly issued ordinary shares. The maximum amount to issue amount to EUR 1,128.3 mln, so assuming a conversion price at market prices and a 100% acceptance would increase by 20.4% the share capital of the entity (once including the issuance of shares to satisfy the exchange of supply over Pastor). The impact on core capital would be around 128 basis points from their number of People to December 2011 and held without extending the tender offer Pastor. Not surprisingly, in line with the trend of the sector to strengthen capital via debt exchange. On the other hand, commented that today begin trading the new shares issued by the acquisition of Pastor so that we cannot rule out seeing downward pressure on the price.
Ferrovial. BAA yesterday published its results for 2011 showed an improvement at the operational level (+10% yoy revenue, adjusted EBITDA +17% yoy) due to cost containment, the progress of aeronautical revenues and retail. Good traffic growth with an increase of +3.7% yoy to record in the case of Heathrow (+5.5% yoy), markets the best traffic behavior is recorded in Europe (+4% yoy) and long travel (+5.2% yoy). Improvement of financial structure. The regulatory value of assets (RAB) increased +8.4% yoy We still believe that the good performance of BAA remains one of the main attractions of Ferrovial. Overweight.
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