Market Commentary - Housing, Infrastructure, Construction and Services 14th June 2017
Severfield, Norcros and Bellway attract attention this morning with releases to the market. The moves yesterday saw Capita storm ahead with a 15.2% increase to 634p as the trading update restored investor confidence and the previous valuation was too low by some distance if the business is stable.
Read more...Market Commentary - Housing, Infrastructure, Construction and Services 13th June 2017
Capita, Crest Nicholson and Ashtead all have news for us today. Mitie’s results meeting yesterday was over in an hour, much earlier than expected. The interesting elements from yesterday are the ideas about using technology and the admission that the Property Management operation is potentially up for sale.
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Fed rate decision: One and done - or not done?
One and not done would spook markets in our view
On Wednesday 14 June, we believe the US Fed is highly likely to raise the target range for the federal funds rate by a further 0.25%. We believe the opportunity the move policy rates further away from the zero “lower bound” will not easily be passed-up as US unemployment figures improve and as importantly without spooking markets, which have priced this move in. However, a signal of “one and done” for 2017 – or at least “one and wait and see” will be critical to keep markets buoyant. In addition, investors will be watching for benign comments in respect of any adjustments to the Fed’s balance sheet policy.
Read more...Market Commentary - Housing, Infrastructure, Construction and Services 12th June 2017
Mitie’s numbers for 2016 were released this morning and as expected they make grim reading but no grimmer than expected. The election result was the main driving force in the sector and, as we know, will remain so. For the remainder of the year the issues are clear; it depends on what you think will happen with Brexit.
Read more...Alphabet - Goodbye blue sky pt Ii
It looks like SoftBank needs to really beef up its robotics expertise if it wants to be a player in this space which is what these two acquisitions should start to accomplish.
Alphabet has reached a deal to sell both Boston Dynamics and Schaft to SoftBank leaving it more focused on its core business of collection and monetisation of Internet data. Boston Dynamics is a robotics company that specialises in robots that are autonomous as far as navigating and adjusting to their immediate environment. SoftBank is also acquiring Schaft from Google which is a humanoid robotics company that was spun out of the University of Tokyo. These robots can move around with relative ease but how they would be able generate value for Alphabet shareholders was always unclear. At the end of the day Alphabet is a data and analytics company whose objective is to categorise and understand every piece of digital information that users generate and to sell those insights to marketers. Every other piece of hardware that Alphabet makes from Google Home to Pixel and Internet Balloons, have the capacity to collect huge amounts of data and thereby generate can value to the core business.
Read more...The strategy around the smart home is bang on and it has created the right product
Home is where the heart is. Whilst not fans of Essential Products’ phone, the strategy around the smart home is bang on and it has created the right product. The phone simply does not do anything particularly special in a brutal commodity market and given the company’s overall strategy, we see no real need why it can’t make use of the phones of others. However, the Home product is something else, and although it may not succeed, it has a good chance. This is because, has been designed to explicitly address the two biggest problems with home automation that exist today.
Read more...UK election: Another step-up in political risk
A tactical blunder does not mean the end of Brexit or the Conservative administration
UK PM Theresa May’s strategy of consolidating power when the Labour opposition was seemingly in disarray and the Conservative poll lead unassailable has seriously backfired. The likelihood now is that the UK will be governed by a minority Conservative administration with support from the Democratic Unionist Party (DUP). May’s future as leader of the Conservative party remains in serious doubt following a number of campaign mistakes, not least the failure to recognise importance of appeasing the older voter. Much now remains open for debate over the next few weeks.
Read more...Market Commentary - Housing, Infrastructure, Construction and Services 9th June 2017
What do we make of that? There is no company news today as you may have expected. In the absence of news we mention below two fundamental changes taking place in the sector, Partnership Housing and Modern Methods of Construction on which we have done much work recently. Get in touch if you want to hear more. The recent positive news from quoted entities about prospects in Partnership Housing begs the question of who might pay to have the properties built and how. The Modular/MMC (Modern Methods of Construction) market looks right and the news that Berkeley is looking at a site for a 2,000 unit pa modular factory at Northfleet is a big move.
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