Posts Tagged ‘ india ’

Heinz – An Emerging Market Food Leader

May 29, 2012
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Heinz – An Emerging Market Food Leader

Heinz (HNZ) had an Analyst Day on Thursday last week with about four hours of management presentations and Q&A posted on the investor relations section of the Heinz website. This presentation is a wonderful way to understand the Heinz business model and appreciate the strategic vision of the company. Heinz stock had a relatively strong run hitting new all-time highs around $55. Post-results, the shares have pulled back based on fears relating to the extent of reinvestment into restructuring projects, weakness in the frozen entrée category, exposure to Europe, and a near-term reduction in sales expectations as the company is being hit by foreign exchange and focusing on some low hanging fruit margin opportunities. Despite the concerns, Heinz is very well positioned strategically with a number of positives within...

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Global Demographics – An Important Multi-Year Investment Theme

January 26, 2012
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Global Demographics – An Important Multi-Year Investment Theme

With much fanfare, estimates of the earth’s population recently surpassed 7 billion people. Population growth rates have been staggering for decades, for a number of reasons. The straightforward explanation is that global birth rates have remained high while there has been tremendous improvement in child mortality rates and life expectancy. Sewer system implementation in the 1800s helped separate waste from drinking water and cut down on the spread of cholera and typhus. Later medical advances in the form of a smallpox vaccine and Penicillin, coupled with DDT control for Malaria, helped more people live longer. As people lived longer, more reached childbearing age and had children themselves. Back in the 18th century, replacement fertility was up to six children. In order to keep population stable, women needed to have...

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Investing Ahead of a European Recession

December 14, 2011
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Investing Ahead of a European Recession

Investing ahead of a recession is like a trip to the dentist for a filling when the Novocain isn’t quite right. You know you are in for some pain, but it’s unclear just how much, and how long it will last. Europe is accepting the German path forward, which will at a minimum, lead to plenty of pain for many countries. Spain, Portugal, Greece, Belgium, Italy, and France are all experiencing, or likely to experience, a recession. Forward looking indicators are declining, confidence is dashed, austerity being implemented, European financial assets down sharply, and interest rates higher. The ECB is taking a minimalist approach to fighting the recession and the 17 countries in the Eurozone have different agendas, interests, and policy aims. In the background of the economic recession, there...

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Emerging Market Currencies Signaling More Risk Aversion

November 22, 2011
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Emerging Market Currencies Signaling More Risk Aversion

For almost a decade, emerging markets have been in a bull market with high growth rates, declining interest rates, and capital inflows. During the financial crisis, emerging markets were hit like financial assets around the world, and capital flowed out of the asset class. Over the course of 2010, and most of 2011, emerging market currencies strengthened once again. Recently, the European financial crisis cast doubts on the risk appetite for emerging market investment. EM currencies experienced a sharp, across the board, selloff in September 2011. Currencies such as; the Brazilian Real, Mexican Peso, and Indonesian Rupiah quickly declined by 20%. Part of the decline was based on the start of EM central bank rate cuts but the majority of the move was simply risk aversion. Many of the...

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EM Stock Markets – Destabilized by Currency Sell-offs and Capital Outflows

September 26, 2011
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EM Stock Markets – Destabilized by Currency Sell-offs and Capital Outflows

Developed market equities are attempting to stabilize based on additional talks from Eurozone leaders who are meeting with the IMF and reported to be discussing items such as expanding the size of the EFSF, creating a TARP-EU, and recapitalizing more of the European financials. Developed market investors are attempting to look ahead during scary times. This contrasts to the overnight session in Asia, which saw another spiral into panic selling towards the Asian close. Most markets were down 3-6% again, and for a short period last night the S&P futures were down 15 points (2.5% lower than 8:00am NY time). There are a number of signs that this round of selling is liquidation with little regard to fundamentals in the region. The selling is indiscriminant when you look across...

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