Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Strategic trade
Trade view / 20 August 2015 at 9:01 GMT

#SaxoStrats: Sell Heineken, buy Carlsberg

Head of Equity Strategy / Saxo Bank
Instrument: HEIA:xams
Price target:
Market price:

Carlsberg shares are down 11.5% over two sessions following a profit warning driven by weak sales in Western Europe. Fundamentally, Carlsberg is attractive (notably against competitor Heineken) based on its current earnings yield, and we expect the new cost-cutting programme to lift investor sentiment.

Investors can be outright long Carlsberg, however we prefer hedging the bet with a Heineken short. Historically the pair has reverted in around two months which fits with our maximum period based on Heineken’s next earnings release on October 28.

Carlsberg shares (year to date):
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Source: Saxo Bank

Heineken (weekly):
Source: Saxo Bank 

Management and risk description

Sentiment following the introduction of the new cost-cutting programme.


Entry: buy 10 CARLB:xcse for every 13 short positions in HEIA:xams.

Time horizon: until October 28.

— Edited by Michael McKenna

For more on equities click here.

Non-independent investment research disclaimer applies. Read more
dominom dominom
I would rather buy a Pilsner Urquell and not sell anything ;)


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