Rémi Le Bailly: Hello everyone. It’s time for our Monday chat. I am very happy to see you once more for this weekly meeting devoted to the stock market and investments. The session is calm today, as often (always?) when Wall Street is closed.
Etienne: Hello, Mr. Le Bailly, is it too early to return to the stock market in moderation given the inflation peak that seems to have been reached in the United States? What are the 4 or 5 stocks that you would put in your portfolio today given the high volatility? Thanks in advance.
The Paris Stock Exchange recovered well last week in the wake of Wall Street and the Cac 40 index is still gaining ground today. The index returns to the 6,500 point mark for the first time in a month.
That said, I’m not sure this signifies the return of a sustainably bullish market. Last week’s advance is more of a rebound following a sharp decline (especially at UNITED STATES) than a trend reversal. Even if inflation no longer seems to be accelerating in the United States, it remains strong and looks set to last. In Europe, the figures published today (8.7% over one year in Germany and in Spain) do not reflect any slowdown.
Admittedly, the improvement in the health situation in Chine is good news that may allow the indices to go a little higher but I do not think that the Cac 40 will manage to cross the graphic resistance which is located at 6,630 points. The market should therefore continue to evolve between 6,200 and 6,650 points as it has been doing for several weeks. We are therefore rather at the top of this fluctuation zone, which does not really encourage me to strengthen positions. I would tend to sell a little in the current zone.
To talk a bit regarding values, I think that the “sleeping beauties” (Orange, Sanofi, TotalEnergies, etc.) that we talked regarding in the weekly a few weeks ago are still attractive in the current context. Instead, they fell last week as the market rebound benefited luxury and cyclicals more. Other high-return stocks such as Axa, Veolia or Stellaris may be worth it.
Remy08: Hello, I wanted to have your opinion on luxury companies, in particular LVMH, which has fallen significantly over the past two months. However, I find that it still has many assets, including the share buyback program. I don’t understand why it doesn’t go up. Good for you.
Yes, luxury has fallen a lot because of China and it has picked up for a few days and in particular today due to the improvement in the health situation in this country. As I have said on several occasions, the context of rising interest rates is not favorable to growth stocks, and therefore to luxury stocks. This is why I think that other sectors are probably to be favored in the short term.
On the other hand, in a medium-long term vision, it is a sector which therefore retains very good prospects. At five years, luxury stocks will be worth much more than today, I am convinced of that, but over a one-year horizon, this is not necessarily the sector to play. Finally, I remind you thatInvest does not give advice on LVMH sinceInvest is a subsidiary of the luxury group.
Kimmo: Hello Mr. Le Bailly, concerning Saint-Gobain, what would you advise me to sell or wait? Despite the “so-called” acceleration in growth, the price is steadily falling: in January 2022 it was 67 euros and today it is 55 euros. What do you think of this solid group that fails to stand out? Is it a management problem, because the markets are there? Counting on your always fine analysis, thank you. Cordially.
Saint-Gobain has fallen more or less like the market since the start of the year following an excellent year in 2021 (fifth biggest rise in the index with a gain of 65%). The overall performance remains very correct. I would even tend to think that the management manages things quite well with a fairly dynamic asset management policy. Furthermore, the group still seems to be confident in its ability to pass on, in its selling prices, the sharp rises in costs, in particular of raw materials.
Finally, from a longer-term perspective, the strong prospects for thermal renovation are very favourable. I therefore advise you to keep your titles.
RAZATBACK: Hello, interested in following the restructuring of the galaxy of Mr. Vincent Bolloré, I would like to know on which of his participations is it better to position oneself in order to benefit from future movements of rapprochement? (Vivendi? Bolloré? Financière de l’Odet? Any other?) Thanking you in advance.
If there is a complete restructuring of the organization chart of the group, it is better to target the leading companies since they pile up the discounts. In this case, it is Financière de l’Odet, but since the start of the year the stock has performed less well than Bolloré, which benefited from the announcement of the sale of its transport and logistics in Africa.
It is also possible that the operation is done in two stages. First at Bolloré and then at Odet. So it’s not easy to decide. I would say that you have to bet first on Odet and also put a few balls on Bolloré.
Papanoel: Hello Mr. Le Bailly, in this period of dividend distribution, can you explain to me the difference between a coupon and a partial amortization (for example for Klépierre or ABC Arbitrage)? Thank you and have a good day.
I’m not 100% sure, but I think the difference comes from the origin of the dividend. Klépierre cannot pay a dividend as such since it has no distributable result as such. He must therefore deduct sums from premiums. This explains the different name.
land42: Hello Mr Le Bailly, following the capital increase of Air France-KLM, is there a modification of the upper and lower limits of the capped bonus certificate FRBNPP03DD68? Thanks.
Yes, in the event of a capital increase, the limits are adjusted to take this operation into account.
JPMarkan: Hello, it can be difficult to know whether to bring to a takeover bid when the majority of the capital is split between many small holders because in the event of failure of this one, the action remains listed. Also, once the takeover bid has been opened, how can you know the percentage and number of shares tendered to the takeover day by day?
It is always a difficult choice. The easy way out is to bring in the offer but, if the price isn’t good enough, it may be better to hold on to it.
This choice is not without risk. A general decline in the market may cause the stock to fall below the bid price. In another scenario, the float becomes reduced and the stock market life of the stock is less lively and the stock declines. However, the threshold for triggering the withdrawal offer is now set at 90%. This means that if this threshold is not reached, enough shareholders have refused the offer. Among them are often funds that have also felt that the price was not high enough.
They associate and sometimes negotiate an increase in the offer with the company which triggered the takeover bid. But it’s not always the case. In other cases, the security remains listed for several years before the majority shareholder company launches a new offer at a much higher price.
In short, there is no precise rule. This is why we decide on a case-by-case basis on transactions. Finally, to be complete, it is not possible, to my knowledge, to know from day to day the number of titles contributed.
BOURVIL: Hello, I’m tempted to buy an American Nasdaq 100 security, but the exchange risk is currently very high with a very strong dollar which would weaken. A simulation with an Amazon share bought today that would take 20% and kept until the euro/dollar rises to 1.20 to be resold is catastrophic and would only allow a capital gain of barely 8% given the fall in the dollar. So is the game worth the candle? Is it better to play an ETF in this case?
You are right, the performance of indices and stocks is very different if we think in euros or in dollars. If you want to bet on American techno as a whole, it may therefore be preferable to do so via ETFs hedged once morest exchange rate risk (we say “hedged”). Major ETF issuers offer such products on major indices and, in particular, on the Nasdaq.
On the other hand, if you want to enjoy the fall of a great techno, it is better to buy it live. The volatility of these securities is such that if your anticipation is good, this should largely cover an unfavorable currency effect.
Gilbert: Hello Rémi, I would like to repeat my question from last week, understanding very well that you cannot process all requests. What do you think of Worldline’s outlook? Where is the sale of the payment terminals branch announced as imminent at the beginning of the year? Thank you very much for your opinion.
The quarterly figures were quite reassuring and the company maintained its annual targets. The sale of the terminals to the Apollo fund should be completed in the second half. However, the company has lost its “star” status for more than a year. After a series of disappointments, she must convince investors that the future will be better. We are buying but it is a value that has a “joker” side. This is, for me, an extra line to play for a possible stock market “recovery”.
It’s nearly 5:20 p.m. It’s time to leave us. You will find Denis Lantoine next week. Please note, due to Whit Monday, the appointment is set for Tuesday, 4 p.m. Have a good week.
