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Article / 12 October 2016 at 8:19 GMT

LVMH and Solarworld added to portfolio — #SaxoStrats

Head of Equity Strategy / Saxo Bank
Denmark
  • LVMH revenues improvement reflects Asian economic uptick
  • German solar subsidy increase should boost Solarworld
  • Positions in Teekay Tankers and Twitter also added this week
leather handbags
 Asia's appetite for luxury leather handbags has returned. Photo: iStock

By Peter Garnry

As communicated in our morning call yesterday, we went long LVMH (MC:xpar) and Solarworld (SWVL:xetr). LVMH has broken out of its recent range as Q3 earnings figures were better than expected with revenues at €9.14 billion vs an estimated €8.92bn and organic growth was better than expected. Especially leather goods are showing an improving demand picture. The recent uptick in Asian economies including China is helping luxury companies. Our stop in LVMH is set to €153.50 just below recent lows.

LVMH price daily chart the past year :
LVMH
Source: Saxo Bank 
 
We bought a small position in Solarworld because the stock is showing strong price momentum from recent lows and due to news on Tuesday that Germany will increase solar subsidies. This could lead to a sustained repricing of solar stocks in Germany – which is what we are betting on here. The stop is set at €3.65 .

Below is a complete overview of all our positions. Please note that we have also added a position in Teekay Tankers (TNK:xnys) to bet on rising oil prices and improving fundamentals in the tanker segment. We also re-entered a long position in Twitter (TWTR:xnys) on Monday around the open at $17.41 with no stop for now. We will update that today. Twitter shares rose 4% in German trading yesterday.

chart
 Source: SaxoBank

Our portfolio has suffered a small loss of round 1.5% the past couple of trading sessions but the portfolio should recover this loss if risk sentiment improves from here.

chart
Source: Saxo Bank

– Edited by Clare MacCarthy

 

Peter Garnry is head of equity strategy at Saxo Bank 

12 October
Entrefilet Entrefilet
Thanks but why this love for lo-res images? Can't read anything on the stock table
12 October
tcat tcat
Where can I find your portfolio as would like to have a deeper look into it and the picture nyou posted is not very good.
12 October
Andrei Shervashidze Andrei Shervashidze
Hi Peter, I'm unable to track any news related to Germany solar subsidies. As far as I know the subsidies for batteries were extended in March (http://www.photon.info/en/news/germanys-new-energy-storage-incentive-program-start-march) but FiT incentives are offering low returns - 0.12 cents/kWh and declining.
Would you share your source ?
12 October
Clare MacCarthy Clare MacCarthy
The images have been updated in high resolution. If you click on them they'll appear clear as crystal in a new pop up window :-)
12 October
Peter Garnry Peter Garnry
@tcat we send out updates frequently by the portfolio does not have a public home
12 October
tcat tcat
@ Peter ok thanks for the info I am always checking :)
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