A Look at Europe’s Top Two Most Valuable Companies

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The most valuable company in Europe based on market capitalization is the French luxury giant LVMH Moet Hennessy Louis Vuitton SE (LVMUY). Based in the ADR trading on the OTC market, the market cap was $482.5 billion as of yesterday. Below is a short profile of the firm:

LVMH Moet Hennessy Louis Vuitton SE is a France-based luxury group active in six sectors: Wines and Spirits, Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, Selective Retailing and Other Activities. Wines and Spirits owns brands, such as Moet & Chandon, Krug, Veuve Clicquot, Hennessy and Chteau d’Yquem, among others. Fashion and Leather Goods owns brands, such as Luis Vuitton, Christian Dior and Givenchy, among others. Perfumes and Cosmetics owns brands, such as Parfums Christian Dior, Parfums Givenchy Guerlain, Benefit Cosmetics, Fresh and Make Up For Ever, among others. Watches and Jewelry owns brands, including TAG Heuer, Hublo, Zenith, Bulgari, Chaumet and Fred, among others. Selective Retailing owns the brands DFS, Miami Cruiseline, Sephora and Le Bon Marche Rive Gauche, among others. Other Activities includes its acquisition of Pedemonte Group, a jewelry producer and the arts brands, such as Les Echos, Royal Van Lent, and Cheval Blanc

The stock is up 30% year-to-date. Over the past 5 years it has more than doubled as shown in the chart below:

Source: Google Finance

The second most valuable firm based on market cap is Danish drug giant Novo Nordisk A/S (NVO). It is a world leader in the treatment for diabetes (Ozempic). This drug is currently prescribe for treating obesity also. NVO stock has soared recently due to the extreme popularity of its obesity drug Wegovy.

The company has a market cap of $286.0 billion based on the ADR trading in the US market. Year-to-date the stock is up 23%. The 5-year return is an astonishing 243% as shown in the chart below:

Source: Google Finance

Disclosure: No positions

Germany’s Top 10 Trading Partners in 2022: Chart

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The top export destination for Germany is the US based on preliminary 2022 data according to Destatis. The next export country was France followed by the Netherlands. China used to the second top export market Germany in 2020. But the pandemic and other factors have changed that.

China is the top country for imports into Germany. Only the US and China are among the non-European countries that are the major trade partners of Germany.

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Source: Destatis

US Total Public Debt 2007 to 2023: Chart

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The Total US Public Debt stood at around $31.46 Trillion as of Feb 10th this year according to a report by PEW Research Center. While the public holds most of this debt about one-fifth are owned by another arm of the government itself.

The following chart shows the growth of the total US debt over the years:

Click to enlarge

Source: The US debt ceiling, commodity supercycles, & oil, Market Index

The educational piece at the Market Index above link provides a good overview for understanding the debt ceiling.

Here is a fascinating excerpt:

Lessons from History

Since 1960, Congress has permanently raised, temporarily extended, or revised the definition of the debt limit 78 times, according to the US Treasury Department. 

49 instances occurred under Republican presidents.

29 instances occurred under Democratic presidents. 

Yep – the debt ceiling is revised (on average) 1.23 times a year. 

Related:

The World’s Top 50 Safest Banks 2022

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The Global Finance magazine published their annual list of the world’s safest banks for 2022 in November last year. With the banking sector under stress and many uncertainties facing investors, the list can be a good starting point for further research. Despite the dramatic decline in equity markets and economic volatility in 2022, the top 10 banks remained stable showing resilience. In fact, they remain unchanged from the previous year.

The world’s safest bank was Germany’s Kfw. This bank took the top spot for an astonishing 14th year in a row. Canada’s Royal Bank of Canada (RY) jumped from 20th rank a year ago to 11th this year.

Below is the methodology used by Global Finance to shortlist the winners:

Our rankings apply to the world’s largest 500 banks by asset size and are calculated based on long-term foreign currency ratings issued by Fitch Ratings, Standard & Poor’s and Moody’s Investors Service. Where possible, ratings on holding companies rather than operating companies were used; and banks that are wholly owned by other banks were omitted. Within each rank set, banks are organized according to asset size based on data for the most recent annual reporting period provided by Fitch Solutions and Moody’s. Ratings are reproduced with permission from the three rating agencies, with all rights reserved. A ranking is not a recommendation to purchase, sell or hold a security; and it does not comment on market price or suitability for a particular investor. All ratings in the tables were valid as of August 31, 2022.

The World’s Top 50 Safest Banks 2022:

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Source: World’s Safest Banks 2022, Global Finance

A few observations:

  • All the 5 major Canadian banks are in this list.
  • The 4 US banks in the ranking are relatively unknown – AgriBank, CoBank, AgFirst and Farm Credit Bank of Texas. All four are part of the US Farm Credit System.
  • Similarly the 4 major banks of Australia also made it to the list.
  • Interestingly Credit Suisse of Switzerland did not make the cut but UBS (UBS) did.

Disclosure: Long RY