Trade view /
20 August 2015 at 9:01 GMT
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
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
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