March 19, 2018 / 1:51 PM / 6 months ago

BUZZ-VIEW FROM THE BUYSIDE-Comgest sticks with Zara owner Inditex

** French fund manager Comgest is sticking with Zara fast-fashion chain owner Inditex despite currency-related share price weakness in Jan and Feb

** Inditex represented around 6 pct of Comgest's 7-billion-euro European strategy heading into Q4 results and the fund has not changed its position since, says analyst and fund manager Alistair Witter

** Believes rapid growth in online won't dilute gross margin as a large chunk of orders and returns happen in store, keeping lid on online delivery costs. Also, online customers often buy more in store during those visits

** "They have good reasons to argue they are at a structural advantage," says Witter

** Comgest also holds Jeronimo Martins, a fast-growing Portuguese discount food chain that's strong in Poland

** Among telecom stocks, Comgest holds French challenger Iliad. Sees strong launch in Italy as phone packages offered by Italian telecom incumbents are "extremely complex"

** "If you have a licence to operate you can make super-normal profits quite easily and Italy is no different, so ... Iliad can start to chip away at those profits," says Witter

** Comgest holds Assa Abloy (U.S. pricing power means can push through higher steel prices), Geberit (addressing shortage of plumbers in Germany, strong organic growth elsewhere), SAP (continued growth in licensing)

** Also has ASML (EUV milestone in 2017, huge technological barriers for rivals), Sartorius Stedim (single-use products offer strong recurring revenue linked to biopharma growth)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below