Canada Goose Stock: the cold snap

Probably. But that is not free from backlash. As in fact shows the significant slide of nearly 30% recorded by the title since the beginning of December.

Granted, there is a general tidal decline in this correction (the retail sector sub-indices are down 5% in Canada and the US). You also have to recognize that we were starting from a high (the market tends to adjust down a stock at a peak more strongly when the general mood changes, because it fears that it has been over-enthusiastic ).

But above all there is this: Huawei.

The arrest of the financial director of the Asian giant at the beginning of December has greatly chilled relations between Canada and China.

It took only a few days for the media to echo a movement of resentment and a potential boycott of Canadian products in China.

Canada Goose, which is just trying to expand into the Middle Kingdom, has felt the cold snap.

Is the Chinese boycott so tough?

On Canada Goose's short-term profitability, not really. The company actually only has around 30 distribution points (and only two stores of its own) in China. By comparison, it has 250 in North America and 865 in Europe. A boycott of 2.5% of a network is unlikely to jeopardize a company's profits. Especially when other outlets continue to deliver growth.

A boycott of 2.5% of a network where significant hopes of growth are built is however likely to deal a felt blow to the multiples at which a security is traded. Doubt settling in the market on future prospects, multiples deflate. Particularly when the stock is trading at 60 times current year expected earnings.

Hence the slip observed.

Can the stock recover?

Some think so, like Meaghen Annett of TD Securities, who, when the price touched $60, raised his recommendation to “best stocks to buy today”.

The analyst expects that the recent events will work out over time and that the potential of the Chinese market will then return to minds and valuation.

She further notes that while Canadian, American and Chinese diplomacy is at work, the results should continue to progress.

Growth generated by the expansion of the physical distribution network, but above all by the popularity of the brand and online efforts. The strength of online coat shopping is eyebrow-raising. In 2015, direct online sales accounted for approximately 4% of Canada Goose's total sales. They are now at 43%. And Susquehanna Financial Group expects them to reach 70% in 2021. Their progression is all the more interesting as they offer higher profit margins, with no commission having to be paid to physical retailers.

Ms. Annett notably bases her optimism on the fact that the international market is still weakly penetrated by Canada Goose. In Canada, for every 1,000 individuals with a household income of over $100,000, the company currently sells 52.2 coats. Elsewhere, above the 37th parallel, penetration is at 10.2 coats per 1000 individuals in Japan and South Korea, 6 per 1000 in the United States and 5 per 1000 in Europe.

Most analysts are also optimistic, while the consensus predicts that earnings per share should increase by 31% over the year 2020 (March) and 26.9% the following year (2021).

“Yes but, even by adhering to the reasoning, the title remains at more than 51 times the profit expected in March 2019, a very strong multiple”, we will say.

It all depends on the angle from which you choose to look.

Apparel companies like Under Armor and Brunello Cucinelli have averaged trading at a multiple of 42 times earnings for the next 12 months in times when their earnings were growing at a rate of 20% to 30% per year. However, for the following year (2020), Canada Goose's multiple is 39.4 times, and it is only 31 times the 2021 anticipation.

If one believes that relations will have warmed up between China and Canada in 2020-2021 and that penetration rates have the potential to climb significantly, the title is probably indeed an attractive opportunity.

However, we remain personally suspicious of high-multiple designer clothing and accessories companies. With the rapid market declines experienced in the past by iconic names such as Crocs, Tommy Hilfiger and Under Armour, in mind. Too popular often makes people less popular, and reversals in growth can be rapid.

For those who would still want to venture into the fashion market, retailer Aritzia's stock (ATZ, $16.22) seems more appealing. Its clothing designs are gaining popularity as its profit has advanced 23% in the past 12 months; driven by strong growth in same-store sales. The consensus of analysts is for an increase of 15% next year and 22% the following year. Earnings advances are a little more modest than for Canada Goose, but at 17.6 times next year's anticipation, the stock carries much less expectation than the latter's 39 times.

Japan extends a control on the foreign exchange market

The Japanese government has decided to extend until September its surveillance of the foreign exchange market by requiring participants to report their positions daily.

This measure, set up in summer 2011 and already extended since, should be completed in late June, but the Ministry of Finance considers it "always necessary to carefully observe the evolution of markets."

The authorities want to identify and hedge fund managers ("hedge funds") and other investors seeking short-term profits and officials sometimes considered excessive volatility of exchange rates, the yen tends to serve as a safe haven against the dollar and the euro.

Although industry professionals consider the control of short-range as limited to large financial institutions active in the Japanese market and not abroad, the purpose of government is in them to exert psychological pressure on profiteers showing them that he has an eye.

The government decided on 24 August 2011 to implement the system through a set of measures to fight against the dreadful rise of the yen at the time.

He decided to pursue this same scrutiny if the Japanese currency falls again significantly in the past six months due to the strengthening of monetary easing from the Bank of Japan (BoJ) and the economic policies of Prime Minister Shinzo Abe arrived right to power in December.

The Paris Stock Market pauses

After rebounding more than 2% Wednesday reassured by the words of the President of the ECB, the Paris market addresses the session slightly lower.
After two session rebound, the Paris Stock Market takes a deep breath. In early trade, the CAC 40 was down 0.34% to 3713.07 points.

French morale fell to a new record low in June, largely as a result of fears of rising unemployment, according to the National Institute of Statistics and Economic Studies (INSEE).

Fears about the evolution of U.S. monetary policy and drying credit risk in China, however, continue to fade. The agreement reached last night by finance ministers of the European Union on the delicate issue of sharing the losses in case of bank failure is likely to reassure investors. A compromise that takes a few hours of the opening of the European Council.

The U.S. markets ended up almost 1% last night. The downward revision of GDP for the first quarter were interpreted as likely to delay the announced reduction of asset purchases by the Federal Reserve. The Standard & Poor's 500 index closed above 1,600 points for the first time last week.

Meanwhile, the Chinese markets recover prudently, led by a modest rebound in financial stocks, although many uncertainties remain on the management of liquidity by the People's Bank of China. The cash rate on the Chinese money market trending down for the fifth straight session after soaring last week. Tokyo also has a rebound of 2.96%.

Stocks ​​to follow

Paris Orleans (0.015% to 18.45 euros), holding company of the Rothschild bank reported yesterday evening adjusted net profit up 17% to € 47 million for the fiscal year 2012-2013 due to the increase in revenues in the merger and acquisition advisory and reductions in administrative costs. Revenue rose 1% to 1.15 billion euros.

Global Bioenergies (-0.86% to 32.17 euros) is planning a capital increase of EUR 20 million to finance the industrialization of the manufacturing process of isobutene, a chemical involved in many Product, in particular fuels.

Alcatel-Lucent (2.43% to 1.35 euros) set at 1.80 euro the price of convertible bonds (bond) that a bond issue to refinance tranche maturing in 2015. 39.4% of the outstanding 2015 convertible bonds were redeemed. The maturity of the new tranche in 2018.

Also note, the British laboratory Sinclair IS Pharma, which was trading on Euronext of anecdotally, will leave the Paris stock exchange on 12 August.

Stock market concerns for employment

A new cloud obscured the horizon Monday employees of Fnac, three days before the IPO of their group. The management had to deny a proposed 600 new job cuts mentioned in the press, but failed to dispel fears about jobs. An officer of Fnac quoted by the daily Le Parisien suggests two planes, one called "Mars" which would affect 289 music stores and other "Phoenix", which would cover all the group's businesses (cashiers, librarians, technicians .. .) but only ten stores in Paris.

The distributor of cultural products, which faces a disruption of markets caused by the rise of online commerce, has categorically denied these job losses. But he spoke of negotiations for 18 months with the social partners on "workforce adjustments on the record market" and that could lead to job cuts in stores. However, "in no case" this reflection for 289 positions. "We are well below such a number," said a spokesman told AFP, saying that there would "not necessarily a social plan." Fnac has recently deleted 510 posts including 310 in France as part of a plan to save 80 million euros announced in early 2012. Subsidiary Kering (formerly PPR), which will gain its independence on Tuesday at the general meeting of the group, now has 16,648 employees worldwide in 170 stores, including 10,555 employees in 103 stores in France. Its sales amounted to EUR 4.06 billion in 2012 and its profitability has faltered in recent years. Its net loss more than quadrupled in 2012 € 141.7 million (28.2 million in 2011).
€ 80 million savings

CFO Matthew Malige, told AFP, puts, explaining that this includes an impairment loss of more than € 93 million to the stock exchange, but EUR 37 million restructuring charge and 26 million loss exceptionnelles.La Fnac is profitable, insists Mr. Malige. It reported an operating profit of € 73.3 million in 2012 earnings before its parent, depending on the stock prospectus. But concedes the CFO, we must continue to reduce costs in the face "strong economic economic crisis" and "structural problems in some of our markets."

In its prospectus, Fnac said to have saved 60 million euros in 2012, "about 80 million of savings in a full year" and says he wants to "continue this policy to the same extent over the period 2013-2014" . "We are working on different tracks and so far none has stopped. This goes further renegotiation of leases at reducing our IT costs in our store delivery systems, etc," says Mr. Malige. The unions asked by AFP report not having been informed of possible job cuts. But Thierry Lizé (FO) believes "completely" the information Parisien and "outraged" that the social partners are thus "put out of it."

Fnac placed on the e-commerce

Meanwhile, PPR, refocused on luxury and more profitable than the distribution sportswear, officially becomes "Kering" Tuesday and, having failed to sell the Fnac, discards by putting in stock market.Kering will free distribution to its existing shareholders Fnac share for each package 8 Kering shares they hold. "We approach our independence with confidence because Fnac has a number of strengths," he told AFP Mr. Malige. Fnac judge have successfully taken the turn of e-commerce, unlike its main competitor Virgin, whose liquidation was issued Monday.

The Paris Stock Market suspended the decisions of the U.S. central bank

The Paris Stock Market, All which is far from recent highs icts Will scrutinize macroeconomic appointment next week in terms of the long-awaited meeting of the U.S. Federal Reserve (Fed) and the speech of the Chairman Ben Bernanke.

In the past week, the CAC 40 lost 1.74% to close Friday at 3805.16 points. Its earnings since January 1 are Reduced to 4.51%.

The Paris stock exchange "has ADOPTED logical consolidation Effective experiencing the Highest," says Bertrand Lamielle, director of management at B * Capital (BNP Paribas).

Markets are showing a "hypersensitivity (...) the monetary policies of central banks," indicate Their side economists BNP Paribas CIB, For Whom it was "clearly illustrated by the recent turmoil in a wide-range of turbulence assets."

This week, They Expressed disappointment Tuesday Effective in meeting of the Bank of Japan, All which HAS Chosen icts the status quo on monetary policy, current ultra-loose.

This setback HAS resulted in "a rebound in the yen, All which HAS Weighed on Asian stock exchange" Especially in Tokyo, Where the Nikkei lost more than 6% Thursday, said Jean-Louis Mourier, economist at Aurel BGC.

According to BNP Paribas CIB, all now depends on the Fed, All which meets Tuesday 18 and Wednesday, June 19, with a news conference by icts chairman Ben Bernanke.

In recent months, financial markets Have benefited from generous policies Including U.S. and Japanese central banks, to climb to new heights.

Purpose since Mr. Bernanke's speech before Congress and the publication of the minutes of the last Fed meeting in late May, Suggesting That The discussions Were more open to a slowdown in asset can Purchases, the uncertainty is installed in investors' minds.

Schedule

They Will aussi Pay Particular Attention to any comments on interest rates, Especially Now That Mourier says, "slowing Purchases [of assets] Fed is Acquired."

The question therefore relates to the calendar and adopt the monetary institution Largely All which depends on the level of economic recovery in the United States.

"The Fed chairman made clear the first movement That Could Occur in future meetings as long as the improvement in the U.S. economy and Improving job market are confirmed," Recalls strategists Credit Mutuel CIC.

Next week, Will investors take the pulse of economic dynamism overseas through several indicators.

Monday, They look the industrial activity in the New York area for the month of June, That Followed Thursday in the Philadelphia area.

Also on Thursday Will Be published weekly jobless claims and Existing home sales for May, as well as the composite indicator of economic activity in the Conference Board in May

In Europe, the ZEW barometer of confidence in German financial circles Will Be released Tuesday. Goal Will Be Especially Careful investors to the publication of leading indicators of activity in the euro area and China Thursday (PMI).

In the lack of information about the companies before the Beginning of July, "That the only numbers can move the markets are macroeconomic figures," says Lamielle.

Finally, the Finance Ministers of the euro area are meeting on Thursday to Discuss the terms of the banking union.

Among the losses to follow next week, Orange Monday Bringing together a board decides That Could icts the departure of CEO and EADS, parent company of the aircraft manufacturer Airbus is expected to announce orders at the Le Bourget air show, All which opens Monday.

Market: Weekly nil balance on Wall Street

The Dow and S & P fell 0.80% and the Nasdaq 1.21%: the decline has amplified the mid-session content was then precisely so that the weekly balance sheet remains close zero (+0.02% for the Nasdaq) or slightly negative (-0.18% for the S & P500 or -0.3% for the Dow).
In this way, no short or medium term support has been threatened, U.S. indices are just back to position "soft" on the floor last tested on May 5. Everything is "under control" ... and what a contrast to the volatility that has been unleashed on the commodities market for 10 days.
The "adjustment" algorithms applied to stock indices, by contrast, is fascinating precisely: about one side (due to oscillations above the moving average 20 days), the other with chaos breaking media on metals and oil.
Equity markets maintain their status as a refuge in a speculative context rendered unstable by the deliberate modification of the rules of the game on the market "commodities".
Will they ever escape the instability factor consisting of the indebtedness of the states and the insolvency of many (Greece and Potugal are on everyone's mind)?
The economic figures of the day do not expect a response because they are not likely to influence the strategy of the Fed.
U.S. figures of the day were 'good bill, with consumer prices in the U.S., which rose 0.4% in April compared to March (+0.5%), and the' core rate ', excluding food and energy, the index was up by 0.2% (+0.1% cons).
The real 'good surprise of the day' came from the rebound of the index of consumer confidence, UMich ': it rises to 72.4 for the month of May in the preliminary estimate, against 69.8 in April, while economists on average expected a figure close to 71 in May
But we must believe that Wall Street does not like the 'good news': just recall the negative closing of U.S. indices few hours after the announcement of the death of bin Laden. On the currency front, the euro continues to slide (-1% to $ 1.4110), and he loses contact with the former resistance of 1.4250 USD (the Euro has lost 8 percent against the dollar in 10 days).
Rising Dollar accompanied relapse symmetric price per barrel below $ 99 after testing $ 100 in mid-day.
Among the most actively traded securities, there was -11% with Nvidia, Baidu -5.3%, -4.9% First Solar, Motorola -4.4% -3.6% Yahoo.
Financial stocks have suffered from uncertainty about the solvency of JPMorgan Chase Greece fell by -2.1%, Bank of America and Citigroup -2.2% -2.10% 41.5 $ (despite the payment a dividend of 1 cent).

Sanofi: license agreement with Glenmark Pharmaceuticals

Sanofi announced today that it signed a licensing agreement with Glenmark Pharmaceuticals S. A. (GPSA). This agreement covers the development and marketing GBR500, a new monoclonal antibody for the treatment of Crohn's disease and other chronic autoimmune diseases.
GBR500 just be a Phase I study in the United States in order to determine its optimal dose and was well tolerated with a good pharmacokinetic profile.
"There is still an important medical need for products that are better tolerated and more effective in the treatment of inflammatory diseases," said Dr. Elias Zerhouni, President Worldwide Research and Development at Sanofi. "Through its innovative approach, the GBR500 complete portfolio of Sanofi on the treatment of inflammatory diseases and could address the lack of treatments against inflammatory diseases for the benefit of patients."