Consumer stocks poised for a recovery
Consumer Discretionary
AIR expects a wave of upward revisions from European corporations in the coming months as tariff clouds thin, China stabilises, infrastructure spend ramps up and European rates remain low. The missing piece is consumer confidence, which should rebound quickly if geopolitical tensions ease. Consumer names like Inditex, Stellantis, LVMH, Diageo, Kering, Adidas, Nestle and Unilever look compelling after steep share price declines, with valuations back to decade-lows. Many of these firms are pursuing clear turnaround strategies focused on FCF generation, deep efficiency gains (utilising AI) and renewed focus on core businesses - supported by a trend toward insider CEO appointments, after a decade of appointing outsiders.
Edition: 218
- 22 August, 2025
Stellantis (STLAM IM) Italy
Consumer Discretionary
Forensic Alpha maintains its highest risk rating on STLAM, citing the growing financialisation of the company (both on- and off-balance sheet) which increasingly appears to be driving its fundamentals. The rapid growth in capital deployment is particularly striking given it is occurring when overall auto shipments are down. Sales to related-party JVs surged 50% Y/Y to €7bn (>10% of total sales), while receivables from JVs rose €1bn over 6 months to €3.2bn. STLAM significantly expanded its Financial Services balance sheet, with €4.4bn in H1 outflows (including €2.8bn on leased vehicle purchases and €1.7bn on dealer/retail financing) excluded from its preferred “industrial FCF” metric, which was already negative €3bn. Without an improvement in macro conditions, STLAM’s growing financial risk may force management to consider more drastic restructuring measures.
Edition: 217
- 08 August, 2025
Short ideas deliver 100% hit rate in the first half of 2025
AIR delivered an exceptional 1H25, closing 20 out of 20 European Sell/Short ideas in profit, with an average return of +24.5% per idea. Standout trades included Stellantis (+56%), STMicroelectronics (+55%), Aston Martin (+54%), Remy Cointreau (+53%) and Swatch (+43%). Out of 28 Sell/Short ideas still in force (opened in the last 18 months), 20 are currently making gains. Notable winners include LEM Holding (+51%), B&M (+49%), Alten (+42%) and Mercedes-Benz (+32%). AIR continues to issue an average of 3 high-conviction short ideas per month, making them a must-follow provider for investors seeking consistent alpha from the short side.
Edition: 215
- 11 July, 2025
90% hit rate on Shorts, while Buy calls also continue to outperform
Since the beginning of 2024, AIR has published 41 Short ideas, 37 of which have generated absolute gains. Standout performers include B&M, LEM Holding, Remy Cointreau, STMicroelectronics, Stellantis and Valeo. In Q1 2025, AIR initiated 6 new Short positions, with LVMH leading the pack, and closed 6 positions, including a 54% gain on Aston Martin. On the long side, AIR’s Top 10 Large Cap Best Ideas returned +7.7% in Q1 this year, outperforming the Stoxx 600’s +5.2% gain. Since inception in 2012, the selection has outperformed the index by nearly 300%. Meanwhile, AIR’s Top 10 Mid Cap Best Ideas Selection delivered +17.3% in Q1, far exceeding the +4.3% return from the Stoxx Europe Mid 200 Index.
Edition: 209
- 18 April, 2025
Tracking the mutual funds tax selling
Quantitative Partners with Phil Erlanger Research
Geoff Garbacz thinks this might be the most important data point to follow to determine if we continue to see a stock market rally. Stocks vulnerable to tax selling include Boeing, Intel, Rio Tinto, Stellantis and UPS. Click here to watch the video which also includes the key levels to monitor on the S&P 500.
Edition: 193
- 23 August, 2024
Europe Top 200 Weekly Technical Strategy
The SXXE tests 2021 highs. Both short- and medium-term Breadth are failing at the tops of their ranges, showing negative divergence with the indices. Technology and Media made new highs, while Insurance made a new high but no new relative high. Banks may be struggling, they edge to a new high but now encounter relative resistance. Retail may form short term tops. Energy reasserts short term downtrends, while Health makes a new medium-term relative low. Stockcube’s portfolio remains net long with 42 long positions and 18 short. Recently opened trades include Sartorius Stedim Biotech and Stellantis (both long) and ArcelorMittal (short).
Edition: 179
- 09 February, 2024
Renault (RNO FP) France
Consumer Discretionary
Woozle upgrades the stock to Buy following their latest interviews with dealers across Europe and the US - RNO prices are +6% Y/Y in 1Q23 following the launch of several higher margin midsized and compact vehicles in 2022. Volumes are +13% Y/Y (vs. consensus of -8%) driven by a 27% increase in sales in Europe, where RNO has gained market share and its Dacia Spring is now the second most sold EV in Europe, behind Tesla. Elevated raw material / energy prices, rising wage pressure and logistical problems are the main risks to look out for 2023. A lack of truck drivers in Europe was also flagged, but this has mostly impacted Volkswagen and Stellantis.
Edition: 158
- 14 April, 2023