Report by Messels

Messels’ weekly Stocks & Sectors report highlights renewed strength in Aerospace and Banks, with selective improvement in Miners and long-term support levels being monitored for Media stocks. New Buys include Sainsbury's (breaking out of a two-year range and gains relative momentum) and HSBC (breaking out of a short-term range and renews outperformance). Entain, a Buy last week, is finding support above prior price and relative bases. Messels also closes their long position in Ashtead as it reaches potential price and relative resistance following a strong rally since Apr. Other notable moves include: Babcock renews price and relative uptrends; Fresnillo has broken resistance and made one-year price and relative highs; while RELX approaches long-term support. Messels’ FTSE 100 Momentum portfolio currently consists of 19 stocks.

Consumer Staples

Report by ROCGA Research

ROCGA has recently launched a product that ranks companies using their own CFROI based DCF valuation modelling tools. The list contains the UK’s largest companies ranked according to warranted value, the most undervalued to the most overvalued. CWK appears in the top part of the list, along with Sainsbury, Imperial Brands and ITV. Among others, Sage and Ocado appear at the bottom. ROCGA also covers the US and European markets, with over 2,150 companies in total.

Consumer Staples

Report by Nutstuff

Following Asda’s buyout last year and Morrisons rejecting a £5.5bn takeover earlier this week, Will Nutting looks at what is driving private equity interest in the sector. He also explains why he believes Tesco would make an ideal candidate for activist involvement and why management should be aggressively buying back stock. While Sainsbury’s and Waitrose both remain viable acquisition targets, he remains very bearish on Ocado - besides valuation concerns, it is too small and consequently while it's best in class tech solution may give 50-100bp advantage it’s weaknesses in other areas make it ultimately uncompetitive.