Sector reports

Below is a list of sector reports.

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Mining

16/11/2017
Mining overview: Unlocking the price to NPV discount
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Equity investors are well aware of the returns achievable in mining when markets get behind an early-stage story. This can drive share prices quickly in often wildly different directions, depending on a range of criteria, ie the size and stage of resource, commodity type, listing country, etc. For the last few years Edison has published its annual mining sector report, which assesses how markets consider and potentially value these different criteria. The analysis is not simple and we attempt to normalise for anomalies (of which there are many in mining) to develop a suite of tools that investors can use to assess the plethora of different investment options out there. Our analysis throws up interesting observations that can help companies and investors alike understand where there are opportunities for value creation, and where there are risks of value traps.

Companies mentioned

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*Multiple Sectors

09/11/2017
Deutsches Eigenkapitalforum - EKF conference book 2017
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Welcome to the Edison Conference Book for the Deutsches Eigenkapitalforum 2017. Since 1996 the Eigenkapitalforum has been an anchor for companies, investors and advisers in an ever-changing capital market landscape. The core of the Eigenkapitalforum is to bring medium-sized listed companies together with investors. It also provides an effective platform for bond issuers and, increasingly, for unlisted later-stage start-up companies to access and communicate with the capital markets.

Companies mentioned

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Investment Companies

08/11/2017
LPE sector performance - 10 years of outperformance
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The LPX Europe Total Return Index (LPX) of major UK- and Europe-listed private equity (LPE) companies rose 26% over the last year to end October 2017, outperforming the MSCI Europe and FTSE All-Share indices over one, three and five years. More importantly, the LPX has also now outperformed over the last 10 years. As we pointed out in our June note, the rolling 10-year relative performance should continue to improve as basis effects dominate. Assuming flat performance, the LPX would show over 66% outperformance of MSCI Europe by end October 2018 and 61% relative outperformance by October 2019.

Companies mentioned
LPEQ

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Travel & Leisure

16/10/2017
UK gaming sector: Winning against the odds
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2017 has been a challenging year for the UK gaming sector. Negative media has been compounded by an increasingly aggressive regulator. The imminent outcome of the Triennial Review will certainly have an adverse impact on betting shops, as well as placing additional burdens on advertising and social responsibility for all operators. Furthermore, the Budget presents the risk of higher taxes across the board. However, valuations are undemanding vs the market and, as the regulatory overhang clears, winners should emerge. Paddy Power Betfair (PPB) has limited downside to the fixed odds betting terminal (FOBT) debate and Rank may even benefit. Soft gaming companies, Jackpotjoy plc and Stride Gaming, are growing strongly and internationally diversified players (eg GVC, Playtech) are relatively well positioned. M&A is also highly likely.

Companies mentioned
Show companies...888, Bet-at-home, Betsson, GVC, Jackpotjoy plc, Kindred, Ladbrokes Coral, Paddy Power Betfair, Playtech, Rank Group, The Stars Group, Stride Gaming, William Hill,

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Technology

29/09/2017
Automotive ecosystem: Sitting ducks
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Transport is likely to be the next industry to be digitised and almost all vehicle makers are unprepared. Electric vehicles (EVs) and autonomy could reduce overall US transport spending by 65%, which needs to be supplemented with digital services by players wishing to survive. Edison thinks that sensor data is the one area where vehicle makers have an edge and hence is critical to their future. They must control this asset or face becoming sitting ducks for those that would reduce them to handsets on wheels.

Companies mentioned

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Consumer Support Services

25/09/2017
European luxury goods - Signs of life
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The industry is seeing a patchy recovery in demand, but is unlikely to return to the stellar growth rates of 2010-14. Luxury goods companies will continue to be buffeted by macro-economic and geopolitical events and are more exposed than ever to consumer confidence trends and tourist flows. Chinese consumption (increasingly at home) remains a key driver. Recent positive top-line numbers have driven valuations back up to demanding levels so stock selection is paramount.

Companies mentioned
European luxury goods , See more..., LVMH (MC FP), Kering (KER FP), Hermes (RMS FP), Richemont (CFR VX), Burberry (BRBY LN), Moncler (MONC IM), Tod’s (TOD IM), Ferragamo (SFER IM), Prada (1913 HK), Mulberry (MUL LN), Ted Baker (TED LN), Hugo Boss (BOSS GR), Brunello Cucinelli (BC IM)

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Oil & Gas

16/06/2017
Exploration watch - Offshore Mexico
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Mexico’s offshore acreage is vastly underexplored compared to the US Gulf of Mexico, but now the region is being opened up to international investment as the country implements its 2013 energy reform. Three offshore rounds have been held since 2015, attracting a range of companies including majors ExxonMobil, Total, Chevron, Statoil and BP, and two further rounds are expected in 2017. International companies have drilled a number of successful appraisal wells in shallow waters here over the last nine months, while the first non-Pemex exploration well in over 80 years, Zama-1, was spudded in May 2017. However, the deepwater round generated most interest and activity here is expected to commence from late 2018.

Companies mentioned

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Investment Companies

13/06/2017
LPE sector performance - Positive trends
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The LPX Europe Total Return Index (LPX) of major UK and European listed private equity (LPE) companies rose nearly 38% over the 12 months to end May 2017, outperforming the Stoxx Europe 600 and FTSE All-Share indices over one, three and five years. The LPX has lagged somewhat over 10 years despite NAV outperformance due to discount widening. However, the rolling 10-year relative performance is set to improve strongly as high pre-crisis valuations drop out of the comparatives. Assuming a flat performance going forward, the LPX would show over 7% outperformance of the major indices by end May 2018 and over 60% relative outperformance by May 2019. This could improve the perception of LPE as an asset class with long-term investors.

Companies mentioned
LPEQ