| Sector |
Household goods & Construction |
Last closing price
(27/04/2009) (p) |
2677 |
| 52 week High/Low (p) |
3045/2097 |
| Market Cap (£bn) |
18.77 |
Sector weight age by
Market Cap (%) |
74.96 |
| Average Volume (mn) |
2.21 |
| P/E ratio (TTM) |
17.07 |
Industry P/E
ration (TTM) |
8.65 |
TTM: Trailing Twelve Month
Daily chart (RB.L)
Business background and investment rationale
Reckitt Benckiser PLC manufactures and markets branded products in household cleaning, Health and Personal care, selling it’s range through more than 60 operating companies across 180 countries. It’s operations are based on seven core product groups comprising Fabric Care, Surface Care, Dishwashing, Home Care, Health & Personal Care, Other Household and Food.
Strong growth outlook in 2009
In a full year results statement released in February 2009, Reckitt announced strong performance for the previous year despite challenging conditions. Like-for-like net revenue growth was 10% and the gross margin improved by 100 basis points to 59.3%. This growth was thanks to incremental increases in sales price, benefits from cost optimisation programmes, volume leverage and the impact of a positive product mix which more than offset higher input costs. The inclusion of the recently acquired Adams business contributed approximately half of the 100 basis point increase. All regions and all of Reckitt’s 17 Power brands contributed to this growth, supported by significant media investment and successful innovations such as Vanish Intelligence and Finish Max in One dishwasher tablets. In 2009, based on the current market outlook, Reckitt is targeting net revenue growth of 4% from a base of £656bn and net income growth of 8–10% from a base of £1.14bn, both at constant exchange rates.
Launch of new products to boost earnings
In the first half of 2009, Reckitt announced a number of new products including Vanish Oxi Action Intelligence and Magnets in Fabric Care. The new offerings boosted net revenue by 5% to £1.47bn, although this was largely attributable to Vanish. In Surface Care the launch of further variants of Cillit Bang, such as Grease & Floors and Stain & Mildew and Veja in Brazil, performed well. In Home Care net revenue increased by 6% to £908m, thanks to products from the Air Care range. Growth was led by the continuing success of Airwick Freshmatic and new initiatives including Mini Freshmatic, Airwick Aqua Essences and the Airwick Symphonia liquid electrical ranges. Strong performance in Healthcare was led by Strepsils and Nurofen, enhanced by successful innovations including Strepsils Cool, Sore Throat & Blocked Nose and Nurofen Express.
Technical outlook
On daily chart, Reckitt is trading in the range of 2670.0p and 2507.0p making a positive slope. It is near to the break out upside from this range if it maintains above 2600.0p. Stock has strong support near 2500.0p and resistance near 2850.0p. MACD (moving average convergence/divergence) is positive and 12 day EMA (exponential moving average) is above 26 day EMA, indicating strength in uptrend. 14 day RSI (relative strength index) is above 50 showing strength in trend. 14 day positive DMI (directional moving index) is above 14 day negative and DMI is above 25, indicating uptrend. Stock is also above 20 day and 50 day EMA which supports strength in trend.
Trading strategy
The stock can be bought around 2620.0p with a profit target 2855.8p and stop loss of 2502.1p
| Sector |
Oil & Gas Producers |
Last closing price
(27/04/2009) (p) |
1067 |
| 52 week High/Low (p) |
1415/637.5 |
| Market Cap (£bn) |
36.44 |
Sector weight age by
Market Cap (%) |
14.59 |
| Average Volume (mn) |
7.35 |
| P/E ratio (TTM) |
11.72 |
Industry P/E
ration (TTM) |
5.93 |
TTM: Trailing Twelve Month
Daily chart (BG.L)
Business background and investment rationale
BG Group PLC is engaged in the discovery, extraction, transmission, distribution and supply of natural gas to existing and developing markets around the world. The company’s divisions include Exploration and Production (E&P), Liquefied Natural Gas (LNG), Transmission and Distribution (T&D) and Power & Other Activities.
Increase in total reserves and resource base
In a final result announced in February 2009, BG Group 2P (proved plus probable) reserves increased by 64%, while it’s total reserves and resource base increased by 31% to 13.1 billion barrels of oil equivalent (boe).In December 2008, BG Group acquired control of the Queensland Gas Company (QGC), which has seen the company make excellent progress as 2P reserves increased to 3.7 trillion cubic feet (tcf) and total resources to over 11 tcf.
Future growth through investment and acquisition
In December 2008, BG Group was awarded the first Algerian concession licence under the new hydrocarbon law. Guern el Guessa lies just to the northwest of the existing Hassi Ba Hamou permit, where BG Group has drilled several successful wells and covers an area of about 12,200 square kilometres. BG Group will hold a 49% interest and be the operator, while Sonatrach will hold a 51% interest. In January 2009, BG Group and Partners announced the first gas from the Poinsettia field development of which BG Group has a 45.88% stake and is again the operator. Gas is transported into a newly installed pipeline connecting Poinsettia to the existing Hibiscus platform and thereafter to Atlantic LNG. Production is expected to reach a maximum rate of 350 million standard cubic feet per day (mmscfd) on completion of the drilling programme. In February 2009, BG Group entered into an agreement with the Queensland Government to acquire land at North China Bay on Curtis Island off Gladstone for it’s proposed Queensland Curtis LNG plant. To further increase it’s presence in the Australian gas market and feed the global demand for LNG, in March 2009 BG acquired pure energy to expand it’s project without the need for further reserves acquisitions or secure reserves. BG has shifted it’s LNG business model away from trading cargoes in the spot market towards medium-term contracts, locking in high prices. 80% of it’s volumes will be contracted in 2009 – compared to 15–20% in 2007 - guaranteeing strong earnings in coming years.
Technical outlook
BG Group is trading above positive slope and making a higher low indicating a bullish move with a strong support at 1000.0p. MACD is positive but declining and RSI is near 50 showing some consolidation. 14 day DMI is near 20 indicate consolidation. Stock is also above 20 day and 50 day EMA which supports strength in trend. If stock sustains 1000.0p a higher move can be expected.
Trading strategy
The stock can be bought around 1040.0p with a profit target 1159.91p and stop loss of 987.86p (Hedge position: short position in spread betting with £1.12 bet per point).
Game Group PLC
Game Group hit the profit target of 180.67p last week and is trading near 200.0p, breaking out from resistance near 190.0p. MACD is positive and 12 day EMA is above 26 day EMA indicating strength in uptrend. 14 day RSI is near 70 showing overbought. 14 day positive DMI is above 14 day negative and DMI is above 25 indicating strong uptrend. Stock is also above 20 day and 50 day EMA which supports strength in trend. All positions should be closed for the stock.
Autonomy Corp PLC
Autonomy hit the profit target of 1338.86p and is still trading above that level. Entry for the stock could be only taken at 1224.0p. Stock has completed a ‘V’ pattern between 1200.0p and 1400.0p. Stock is still trading above 20, 50 and 200 day EMA indicating the long-term upside trend is intact. Momentum oscillator MACD is positive and 12 day EMA above 26 day EMA indicating strength in uptrend.14 day RSI is above 50 which indicate strength in trend. All positions should be closed for the stock.
Important Information
This report has been issued by CSS Partners LLP (“CSS Partners”). CSS Partners is an appointed representative of Charles Street Securities Europe LLP (“CSS”) which is authorised and regulated by the Financial Services Authority in the UK. It constitutes non-independent “investment research” as contemplated by the FSA Rules and is thus considered a marketing communication. This report was prepared by Kuldeep Bhati who is employed as an analyst at CSS Partners and as such does not conform with the FSA definition of independent investment research and as such is not subject to the rule of not dealing ahead of distribution of the marketing communication and was not prepared in line with the legal requirements for independent communication.
The report is provided solely for your information and may not be reproduced or redistributed, in whole or in part to any other person without specific consent of CSS Partners.
In the preparation of this report, CSS Partners has had access to publicly available information and other sources believed to be reliable. Whilst reasonable care has been taken to ensure that the facts stated herein are accurate and that the recommendations, forecasts, opinions and expectations contained herein are fair and reasonable, neither the author, nor CSS Partners, nor CSS has verified the public information upon which this is based. None of the author, CSS Partners, CSS or any of their respective directors, officers or employees (the “Parties”) makes any representation or warranty, express or implied as to soundness of the recommendation, the accuracy or completeness of the information or opinions contained herein. Investors must make their own investment decision and not rely on this report. The Parties shall not be liable for any loss, costs, liability, expenses (together “losses”) suffered by you following your utilising any of the services we provide other than losses arising directly as a result of fraud or wilful default on our part or as a result of any liability that may not be excluded under the UK regulatory system. In no event shall we be liable for special, indirect or consequential damages of any kind, even though we may have been informed about the possibility of such loss. You shall indemnify us and our officers and employees on demand and keep all such persons indemnified against all losses which may be incurred directly or indirectly by reason of or in consequence of providing this service save to the extent that such losses arise directly as a result of our, fraud or wilful default.
Any opinions, forecasts or estimates herein constitute a judgment as at the date of this report. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. This information is subject to change without notice. It may be incomplete or condensed and it may not contain all material information concerning the Company. This document does not constitute or form part of and should not be construed as any offer for sale or purchase of (or solicitation of or invitation to make any offer to buy or sell) any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.
Risk Factors
There is no certainty that the recommendations will be successful or that they will make money for investors.
There is no certainty that execution prices can be achieved, either in opening or in closing a position.
There is considerable risk operating in equity, futures, options and spread betting markets and investors need to be able to sustain a total loss of capital along with unlimited liability. Potential investors are recommended to consult a financial adviser before entering into such positions.
Regulatory disclosures
In accordance with the Conduct of Business Rules COBS12.4.7R (i) in the preparation of the report the analyst used price and volume charts provided by independent data suppliers and applied technical analysis tools of investment and trading evaluation in arriving at his recommendations, ii) all recommendations made by the analyst are followed up in subsequent reports until the closure of a position, iii) there is no certainty that any recommendation will be successful or that technical analysis should be used exclusively to arrive at investment decisions.
In accordance with section 12.4 of the FSA’s New Conduct of Business Rules, CSS Partners makes the following disclosures:
CSS, CSS Partners and their respective officers, directors, shareholders and /or partners may have a shareholding in the companies reviewed in this report. They will not have access to this report until it is published, except those responsible for compliance issues concerning this report.
The research analyst responsible for the content of this research report certifies that: the views expressed and attributed to the research analyst or analysis in the research report accurately reflect his personal assessment about the subject securities and issuers and/or other subject matter as a appropriate and no part of his compensation was, is or will be, directly or indirectly related to the specific recommendations or views contained in this research report. On a general basis, the efficacy of recommendations is a factor in the performance appraisals of analysts.
The analyst is not involved in any other activity of CSS Partners or CSS that is inconsistent with his objectivity in preparing the reports. His research information is confidential, the only persons privy to this data bar the analyst are senior management. The research recommendations will be updated, but neither CSS nor CSS Partners accept any responsibility for any delay or interruption of service in the submission of reports or updates to reports.
Distribution of recommendations for the period 1st January to 31st March 2009:
| |
% Distribution of recommendations |
No of recommendation |
| Buy |
100% |
22 |
| Hold |
0 |
0 |
| Sell |
0 |
0 |
The first column displays the % distribution of recommendations made by CSS Partners in this Technical Analysis Trading programme and the second column shows the numbers of such recommendation. Neither CSS nor CSS Partners has any investment banking relationships with any of the companies covered in the Technical Analysis Trading Programme, namely the companies in the FTSE 350 index.
Your attention is also directed to the terms of our client agreement with you that covers the provision of this service. To the extent that there is any conflict between the above and the client agreement, the provisions of the above disclaimer will take priority.
