Market Commentary - Housing, Infrastructure, Construction and Services 13th February 2017
Capita has announced that its long standing quarrel with The Co-operative bank has ended with what looks like a no score draw.There is little news expected this week; its half term and the snow is good so the real action with the December year ends does not begin until next week.
Read more...Tullow dipping a toe back into exploration
It is not surprising to see the markets continue to concentrate on the near-term financial health of the company given the material impacts that the TEN start-up and recent issues with Jubilee will have in 2017. Tullow rightly acknowledge the company’s current financial situation and are focussing on production cashflows to enable the steady de-leveraging of the balance sheet. Exploration and appraisal spend remains at very limited levels vs history.
Read more...Market Commentary - Housing, Infrastructure, Construction and Services 10th February 2017
The updates from Electrocomponents and Shaftesbury provide read across information for mainstream HICS companies today. Carillion was the best mover yesterday, up 1.5% to 222p with 2.6m shares traded. Mears was the back marker, down 0.9% on 1.9m shares traded.
Read more...“You like me and I like you”
Trump promises to “load up” the US military
With Valentine’s Day next week, it seems fitting that President Trump has made public his love affair with the US military. He opened his first speech to service personnel on Monday with the words “you like me and I like you”, referencing the support he received from military voters during the election. He then promised to “load them up with beautiful new planes and beautiful new equipment.” Words which sent US defence stocks soaring. So is this really music to the defence industry’s ears?
Read more...Market Commentary - Housing, Infrastructure, Construction and Services 9th February 2017
There is no formal news this morning from sector companies. The item to which we draw attention is a short thought piece sent by Balfour Beatty, the latest in a number of documents in which the company uses its place in the UK industry to attempt to drive broader agendas. The document is worth a read because it applies not just to Network Rail. It also tells us something about Balfour Beatty, as you might expect.
Read more...Facebook and Alphabet - Worlds Apart
Facebook and Alphabet are worlds apart when it comes to AI.
While Google is pushing the boundaries of artificial intelligence forward, Facebook is making excuses for its inability to control hate speech highlighting once again who is the leader and who the laggard in the field of AI.
Google has demonstrated a system it has built that allows very poor digital photos to be enhanced to reveal details of the photograph that have been completely obliterated. In a similar fashion to the way that Deep Mind built AlphaGo, Google has combined two neural networks to produce the algorithm capable of enhancing low resolution images. One of these networks uses its knowledge of certain images to add details while the other effectively reverse engineers the process by which the image was compressed into its current form. The result is quite startling but it is worth remembering that the machine knew what the original image was a face or a bedroom but no more than that.
Despite Google’s claim that this was an experiment only with no plans to put it to use, we think that the uses for this are endless. This technology would be useful in upscaling video to high resolution screens as well as being highly applicable to law enforcement, security, military, medical and so and so forth. Hence, we think that this technology or an off shoot of it is likely to find its way into Google’s products and services in the medium term.
To us this is another demonstration of how well Google leads the field of artificial intelligence and is the closest to using it to enhance the richness and quality of its Digital Life services. This will be a huge benefit to Google as better services will drive more usage through its networks giving it a greater opportunity to monetise. However, this is also the opportunity that Facebook is chasing but when it comes to making its Digital Life services deeper and richer with intelligence, we see it being miles behind.
The problems that it has had with fake news, idiotic bots and Facebook M, all support my view that when Facebook tries to automate its systems, things always go wrong. The problem is not that Facebook does not have the right people but simply that it has not been working on artificial intelligence for nearly long enough. RFM research has found that time is the single most important element when it comes to having a solid foundation of intelligent algorithms upon which to build intelligent services.
In contrast, Google has been working on this for over 20 years and is still innovating as fast as it can. Facebook’s most recent pronouncement by one of its lawyers that it is unable to control hate speech on its platform due to the scale of data that is posted every day, is just another data point highlighting the problem. Facebook has to get this under control otherwise we fear that it will fail to really expand beyond social networking and instant messaging as the offerings from its rivals will be more useful and more fun. Facebook has some time to get to grips with this problem but we still think it will have to resort to making a series of acquisitions in order to catch up with its rivals.
We remain uninterested in both Alphabet and Facebook at this time preferring Microsoft, Tencent and Baidu with Apple for income based investors.
Read more...Market Commentary - Housing, Infrastructure, Construction and Services 8th February 2017
Atkins and Grainger with planned trading updates and Redrow with its half year results provide new information this morning. The big move yesterday was at Berendsen which finally came to life with a 6.9% rise to 904p, its first close above 900p since mid November.A few HICS sector stocks fell yesterday but none by more than 0.2% on what was relatively good day for the sector
Read more...Edison KOL call
PNH
The fourth in our KOL series, Edison sponsors an interview between Dr. Jaroslaw Maciejewski, Chairman of the Department of Translational Hematology and Oncology Research at the Cleveland Clinic. The conversation featured a discussion on current and emerging PNH treatments.
Read more...Market Commentary - Housing, Infrastructure, Construction and Services 7th February 2017
Speedy Hire, Entu and Bellway have issued trading updates today, St Modwen has issued finals and Rentokil has told us of its most recent acquisition and indicates that it did 41 transactions in 2016, mostly bolt-ons, with £124m of annualised revenue. G4S was the main riser, up 1.3% yesterday to 255p. The company is getting tad more support right now from buy and sell side and we suspect that target prices of at least 300p will become the norm quite soon.
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