Japanese lessons (BBC)
Canada to benefit from a strengthening U.S. economy in 2014 (MaClean’s)
Why corporate feminism is convenient for capitalism (The Guardian)
How U.S. Workers Rebuilt an Industry (Bloomberg)
What Sir Isaac Newton can teach us about London’s ludicrous property price bubble (MoneyWeek)
The safer way to access the emerging market recovery story (Trustnet)
JPM’s Forey: for emerging markets worst is behind us (CityWire)
Germany-based Continental AG (CTTAY) is one of the world’s largest tire and auto-parts makers. Due to the strong growth of the global auto industry the ADR is up over 80% year-to-date and closed at $210.93 today.
Continental announced a stock split in the ratio 5:1 recently. The ADR Record Date is Dec 20, 2013 and the ADR Payable Date is is Dec 23, 2013. Currently 1 ADR represent 1 ordinary share. As a result of this stock split, the ratio will change to 5 ADRs representing 1 ordinary share. ADR holders will receive 4 additional shares for each ADR held.
From a recent Bloomberg article:
Continental, based in Hannover, Germany, has a price-earnings ratio of 12, even after it rallied 72 percent this year, more than five times the Stoxx 600. Europe’s second-largest auto-parts maker has beaten analyst earnings estimates the last four quarters and raised its profit forecast for 2013 on growth in China and North America.
Tricky Market
The manufacturer has sidestepped the effects of the region’s car-market contraction by adding sales to customers including Volkswagen AG and Bayerische Motoren Werke AG in growing markets such as China and the U.S. Continental gets 27 percent of its revenue from Europe outside Germany, 16 percent from North America and 14 percent from Asia, data compiled by Bloomberg show.
“They have a good balance of exposure, so in essence you’re not betting on any one company or area,”James Moffett, who oversees $10 billion in international assets at Scout Investments in Kansas City, Missouri, said in a Dec. 4 phone interview. “It’s both the earnings and the market pricing, which helps with the question of how do you try to play with what can be a tricky market next year.”
Source: Bargains Beckon Funds to Europe With S&P 500 Past Prime, Bloomberg
Some facts from the company’s website:
Today, Continental ranks among the top 5 automotive suppliers worldwide.
As a supplier of brake systems, systems and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires and technical elastomers, Continental contributes to enhanced driving safety and global climate protection. Continental is also a competent partner in networked automobile communication.
With around 170,000 employees (Status: December 31, 2012) in 46 countries, the Continental Corporation is divided into the Automotive Group and the Rubber Group, and consists of five divisions:
More information can be found on their Investor Relations site.
In 5 years CTTAY is up about 264%.
Disclosure: No Positions
When the S&P 500 index rises commodities usually follow. Commodities, as represented by the CRB Commodity Index and the S&P 500 run generally higher based on economic growth expectations.
From the lows of 2009, S&P’s strong rebound coincided with a run up of commodities. However after 2012 the S&p 500 and CRB commodity Index started to diverge in their performance. While the S&P 500 has continued to rise higher commodities have declined for almost two years in a row.
However CIBC is optimistic on commodities and the mining sector in particular moving forward.
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Source: A Look to the Future – 2014 Edition, CIBC World Markets
From CIBC’s “A Look to the Future – 2014 Edition” report:
The big divergence in the late 90’s saw the bursting of the Tech Bubble but the current run in the S&P could be pointing to commodities being priced too low. Alternatively, commodities, and hence mining shares may well offer a very good investment hedge against a possible pullback in the S&P. This view is further backed by very clear evidence across the mining space of sharp reductions in capital expenditure and aggressive reductions in future output growth.
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Disclosure: No Positions
What Keynes can teach us about investing (MarketWatch)
European equities safer than UK and US, says Mitchell (FE Trustnet)
The story behind sluggish growth (The Guardian)
Lloyds leads the way in global bank revival (CityWire)
The trouble with government ‘megaprojects’ (MoneyWeek)
Housing bubbles worldwide will test a big lesson from the financial crisis (Macleans)
Century of Fed failure (Asia Times)
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Chart showing 5-year performance of iShares MSCI Brazil Index (EWZ) against iShares MSCI Chile Capped (ECH) and iShares MSCI Mexico Capped (EWW) ETFs.
Source: Google Finance
Disclosure: No Positions
The economies of Brazil and Malaysia can be considered similar in some ways. For example, both are emerging countries and commodity-dependent. Brazil is a major exporter of commodities such as iron ore, lumber, etc. Malaysia on the other hand dependent on palm oil and rubber exports. Both countries have offshore oil reserves and a large manufacturing sector. Malaysia has a strong contract electronic manufacturing industry.
In terms of equity market performance, Malaysia has performed better in the past 5 years than Brazil. This could be due to investors’ declining attraction towards Brazilian equities, political issues and other factors. Unlike Brazil, Malaysian political system is stable despite the same party continuing to stay in power for many decades.
Comparison of returns of Brazil ETF vs Malaysia ETF – 5 Years:
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Comparison of returns of Brazil ETF vs Malaysia ETF – Long Term:
Source: Yahoo Finance
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Disclosure: No Positions