Mostly an investor, sometimes a trader. Always a fixed income fanatic. Trying to survive first 30 yrs as an investor after a career in bond trading.
Wandsworth, London
Joined July 2010
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Credit spreads are starting to crack and widen materially.
Risk off sentiment is increasing. Trading desk heads will be telling credit traders to cut risk as fast money sellers try to capture the move which exacerbates the spread widening. Its the same every time!
It’s environmental vandalism not to use our natural resources whilst the country relies on these resources. Offshoring our supplies worsens climate change & is economically stupid.
We need to pay MPs more to attract higher quality higher intelligence individuals.
UK 10yr Gilt yield - French 10yr OAT spread down to just 26bp from a 5yr average of 100bp, highlighting how substantial the French yield move has been since September.
But in 2022 the differential got as low as 19.5bp & as wide as 167bp in the course of just 3 months!
#LSEG is a good growing business that is not well understood & trades at a discount to international peers.
I don't think management are sufficiently focused on capital allocation though. Growth/M&A are good to consolidate mkt position but, shouldn't be their only goal.
Juicy fixed income episode 3
VMED 5.25% 2029 -17.5% yield
Virgin Media senior debt B+/Baa3
Capital structure to make your eyes water ✅
CMA investigation into crucial M&A ✅
Potential haircut in 2yrs without M&A ✅
Best of all - potential for issuer on creditor violence ✅
$RMS Hermes hits a 52 wk low on disappointing Q3 sales.
It's certainly on sale vs recent years at 26x but presumably still wouldn't be cheap enough for Mr Munger as he didn't buy it at 20x.
#AJB continues to deliver customer & AUA growth, driven this quarter by the D2C business. Definite seasonality in evidence.
Nearly 20x falling to 15x vs FY 29 forecasts isn't cheap, but it has the best product offering of its peer group.
#MCG hybrids up 30 points on takeover.
Change of Control covenant = 500bp step up in coupon in the event hybrid not called at par.
Documentation is always a crucial in credit!
Probably a better purchase than equity if you believe it goes ahead.
#MCG receives an approach at 46p per share. My first thought is what happens to the hybrid which at 58p offers a YTC of 23.5%. There will be a debt plan for both senior and hybrids.
Full LME exercise seems entirely possible to sort whole debt stack.
$EL FP - This chart says EssilorLuxottica is cheap.
Its share count has gone up over 100% in 10yrs & unadjusted ROCE asks a lot of questions as to the underlying quality. #toodifficultpile
#SDG Vote approaching.
Retail shareholders will hold the key to the outcome.
Please vote FOR the two resolutions.
lbvam.com/assets/news/LBV-SD…
Juicy fixed income episode 2.
Another hybrid: Stellantis (Ba2/BB) 8.25% callable 2032 (non call coupon = 5yr Gilt +408bp)
Current yield to call 10.8%. £865m issued March.
Non-call a definite possibility, but way too early to really estimate.
#GEN telling the same story it has for years. The problem here is cyclicality and now weather. I was miffed that it got to a 19x fwd PE after I had sold out at 14x.
It'll be a recovery play at some point but at 12x vs lower EPS est (20.5) its just not cheap enough.
I don't know anything about $CRWV yet but with a spread of nearly G+1000 & a yield of 14.8% for under 4 year B1/BB- risk then there is serious money to be made/lost here for those willing to dig into the credit. Watching with interest.
#CLIG continued outflows & negative mkt performance. Equity -8.5% this morning but still up 26% YTD.
Looks expensive to me with a Mkt Cap/AUM ratio of 2.8%.
Not sure there is enough to support this valuation unless they can attract inflows & better mkt performance.
#AV trumpeting wealth. 'UK wealth market set to grow 10% pa'. But what none of them seems to consider is that every bank & his dog are also chasing it.
Wealth providers definitely growing faster than 10%!
