Market Musings 26/1/2012
It’s been a busy 48 hours on the corporate newsflow front since my last update. Let’s wrap up on what’s been going on.
(Disclaimer: I am a shareholder in Ryanair plc) To start off, Easyjet issued a strong trading update this morning, revealing a particularly good performance on the revenue side. This tees us up nicely for Ryanair’s results, which are due on Monday – NCB has a good preview of them here. Ryanair has had a decent move of late, rising from €3.42 at the start of November to the current price at the time of writing of €4.13. With continued positive updates from the sector and increasing chatter of one or possibly two €500m special dividends, I wouldn’t bet against this trend continuing.
(Disclaimer: I am a shareholder in both Allied Irish Banks plc and Irish Life & Permanent plc) I note press reports that AIB has told Irish Finance Minister Noonan that it has no interest in taking over IL&P’s permanent tsb banking unit. Given that Noonan effectively controls both companies through the State’s 99%+ stake in the two businesses, I’m not sure that the decision is AIB’s to make! As I recently noted, the State is mulling over its options for IL&P, so we should have a better idea of ptsb’s future within a couple of months. My guess is that ptsb is going to end up being subsumed into either AIB or IBRC (the former Anglo Irish Bank).
(Disclaimer: I am a shareholder in Datong plc) Regular readers will recall that a few weeks ago I did a detailed case study on Datong plc. Within it I noted that the outcome of a patent infringement case would have a material effect on the stock’s valuation. Happily for shareholders in it like myself the outcome was a positive one. Management is guiding that the total costs of it will come in “substantially” below the £0.3m it had provided for in its accounts. Hopefully the shares will now start climbing towards the most recently reported NAV of 70p at least.
This stat grabbed my attention – McDonalds served 1.3bn meals in the UK in 2011 – meaning that on average each Briton ate there 21 times last year.
(Disclaimer: I am a shareholder in Marston’s plc) In the blogosphere, Wexboy released part 2 of The Great Irish Share Valuation Project. I would broadly agree with his views on the most recent additions to his list, save for C&C, which I believe should be trading on a mid-teen PE in line with its international peers. This is something that I hope to look into in more detail later this year. Lewis at Expecting Value did a great write-up on Marston’s – that piece, and indeed the article on the same company I’ve previously highlighted by Richard Beddard, really underlines the quality of analysis that one encounters across much of the UK and Irish blogosphere. Elsewhere, Valuhunter did a stonking write-up on Marks & Spencer and Debenhams that’s worth checking out.