Ecuador: Noboa under the microscope
With 97% of ballots counted following the presidential run-off, President Daniel Noboa had won 55.65% of the vote, comfortably defeating his leftist rival, Luisa Gonzalez. Noboa therefore secures his first full four-year term having served out the truncated term originally won by Guillermo Lasso. Noboa’s National Democratic Action (ADN) party will have 66 out of 151 seats in the unicameral National Assembly but has supposedly already secured the support of an unconfirmed number of the nine-strong Pachakutik (PK) indigenous bloc and will probably gain additional votes from the Social Christian Party (PSC) and individual legislators. Gonzalez’s Citizen Revolution (RC) party will have 67 seats, but may well experience divisions and disarray after this new defeat. If governability appears more solid than under recent governments, the detail and direction of Noboa’s always-vague policy plans will now come under scrutiny.
Edition: 209
- 18 April, 2025
Consumer Discretionary
Announces a massive buyback, crowning what has a been a great 2 years of performance since Asymmetric Advisors, as the only broker in the market recommending the stock, turned bullish in Feb 2021. Their buy thesis was based around this long overlooked name having a very cash rich balance sheet, emerging from 3 years of intense restructuring and asset write downs and re-orientation of its watch business towards higher priced, premium models. This delivered a major earnings recovery, and having announced a 6% buyback in May 2022, management has surprised the market again by detailing plans to repurchase up to 25.6% of its outstanding shares.
Edition: 154
- 17 February, 2023
Consumer Discretionary
Contrarian Buy - Asymmetric are the only broker with a Positive rating on the name. Shares are up 90% since they turned bullish in Feb 2021. Citizen has been able to engineer a strong earnings recovery after restructuring, promoting its higher end watches and a recovery in its machine tool business. 9x CoE (but heading for substantial earnings overshoot due to FX so more like 7-8x); FCF yield of 14%; 5% dividend; 0.7x PBR with ¥86bn net cash (49% of M/Cap) - the stock looks great value and has strong momentum following the company’s impressive 1Q results.
Edition: 143
- 02 September, 2022