Matter of Fact – w/c 11th May 2015


1. Berkley leads surge in UK homebuiders after conservative win

2. Sally Beauty Holdings Earnings results

3. Toyota Posts an upbeat Q4 Earnings

4. Tyson Foods earnings results

5. Kion Group Earnings results

6. Record Sales drive Drew Industries

7. Airbus surges past Boeing in orders, lags in deliveries




    1. Berkley leads surge in UK homebuiders after conservative win

Company: Multiple Homebuilders

QMG product view: UK45.21_2 – Residential Construction

Event: UK election


  • U.K. homebuilder stocks jumped after a Conservative Party election victory allayed investor fears of a “mansion tax” and the possible introduction of rent controls.
  • Berkley group led the gains at +14.4%
  • Taylor Wimpey (TW/ LN) +5.84% and Bellway (BWY LN) +5.73% were the highest homebuilder gainers in our QMG focus list as at the end of trade.

QMGI comment:

QMG data highlighted the strong performance of this product group over the last few months and a conservative win helps us maintain this view. Both Taylor Wimpey and Bellway show particularly good opportunities in terms of sales and margin compared to analyst expectations and still sit undervalued in terms of EV/EBITDA and EV/Sales valuation figures (compared with 3 year averages).


  1. Sally Beauty Holdings Earnings results

Company: Sally Beauty Holdings (SBH US)

QMG product view: US52.33 – Retailers of cosmetic & toilet goods

Event: Q2 15 Results


  • Revenue: $937.8m (+2% yoy)
  • Operating income: $130.5m (+4.2% yoy)
  • Operating margin: +38bps to 16%
  • Same store sales growth of 5.9% versus 2.2% in Q2 14

QMGI comment:

This is an encouraging set of Q2 results from Sally Beauty Holdings (+3%), with EPS growth topping market estimates ($0.39 vs. $0.36) and consolidated same store sales growth of 2.8% in Q2 15. Our data highlights continued strength across US retailers of cosmetic and toilet goods, with margin growth of +197bps and sales growth of 9.7% yoy  (driven by strong volumes +8.7% yoy) – all of which are ahead of the trailing 3-year average. Additionally, while pricing power remains limited, costs remain under control (-0.9% yoy), aiding margin growth. With approximately 80% of SBH’s stores/distribution outlets located in the USA, QMG’s product data provides detailed insight to SBH’s sales and margin trends. We see scope for upgrades with consensus sales forecast sitting below QMG’s product level data (QMG +9.7% vs. cons +3.3%) and a similar trend is evident in margin growth (QMG +197bps vs. cons +0.11bps). With the shares trading at a slight premium to historic multiples, this implies that the upside to consensus earnings from QMG’s observations is not yet reflected in the share price.

  1. Toyota Posts an upbeat Q4 Earnings

Company: Toyota Motor Corp (7203 JP)

QMG product view: JA34.1 Producers of motor vehicles and their engines

Event: Q4 15 Results


  • Consolidated net income: $3.75bn (up from $2.88bn lasy year)
  • Revenues +8.4% yoy to $59.82bn
  • Share price +3.4% during the days trade before closing at $142.12

QMGI comment:

Whilst this sector is screening negatively in Japan it is a strong performing group globally. Toyota in particular can feel the effects of this stronger global performance as it sells to a majority of the global markets we cover. The strong performance of Toyota been driven mainly from sales in the European and North American markets which grew +5.2% and +7.1%  respectively. Our data reflects quite positively on the Producers of motor vehicles in these markets with either strong volumes (USA, France, UK) or pricing power (Canada, Germany).



  1. Tyson Foods earnings results

Company: Tyson Foods (TSN US)

QMG product view: US15.1 – Meat Processors

Event: Q2 15 Results


  • Revenue: $10b (10.5%)
  • Operating income: $553m (+53%)
  • Despite seasonal challenges, result was above expectations due to strong performances by the prepared foods and chicken segments

QMGI comment:

We removed TSN from our US focus list following the most recent outbreak of Avian flu, however our data continues to reflect positively on US meat processors. Tyson’s result was largely in line with QMG expectations, with our most recent data highlighting sales growth of +8% and margins +700bps. While pricing has fallen from the recent highs, costs remain under control and volumes continue to recover. It is worth highlighting that our data for poultry processors (US15.12) remains particularly strong – and was the key driver of TSN’s positive performance. Remains a product group to watch closely.



  1. Kion Group Earnings results

Source: Bloomberg

Company: Kion Group (KGX GY)

QMG product view: GE29.22 – Producers of lifting & handling equipment

Event: Q1 15 Results


  • Revenue: EUR1.165b (+7%)
  • EBIT: EUR93.4m (+7%)
  • EBIT margin: +8%
  • Confirms FY forecasts

QMGI comment:

Following record results in 2014, KGX has maintained the strong momentum, with order intake +7% yoy, revenue +7% and the order book +13%.KGX is a stock we have mentioned positively in the past given its mapping to QMG product group GE29.22, which remains one of our preferred German products. With approximately 72% of KGX sales and c90% of P,P&E from Western Europe, a weaker Europe should be helping drive strong export sales. Although the shares are +27% ytd, there appears to be further upside to consensus forecasts given the strength of QMG data and we note that the consensus opinion (as regards analyst recommendations) is very positive with +10% upside to (a conservative) price target of just EUR44.


  1. Record Sales drive Drew Industries

 Source: Inside Indiana Business May 5th 2015

Company: Drew Industries (DW US)

QMG product view: POSITIVE US34.2 – Manufacturers of vehicle bodies, trailers & caravans

Event: Q1 15 Results


  • Revenue: $361m (+27% yoy)
  • Operating income: $31.1m (+18%)
  • Operating margin: +47bps to 9.67%
  • Posts record results on RV strength

QMGI comment:

This product group has consistently screened as positive and has been regularly represented in our US Focus List since inception. Our most recent data shows that sales growth remains very strong (+14%), driven by +12% volume growth and +2% pricing. We added Drew Industries to our US focus list in April given the exposure to the US RV market (100%) and the divergence between the strength in QMG product level observations and consensus estimates. We remain positive on this positive group and see further upside to consensus forecasts.

  1. Airbus surges past Boeing in orders, lags in deliveries

 Source: Reuters May 7th 2015

Company: Airbus (AIR FP)

QMG product view: FR35.3 – Aerospace


  • Following solid Q1 results with earning broadly in-line, outlook remains positive.
  • Airbus (AIR FP) has moved ahead of U.S. rival Boeing (BA US) in their race for aircraft orders thanks to a large Latin American win.
  • The European plane maker won orders for 229 aircraft between January and April, after cancellations, net orders totalled 209.

QMGI comment:

QMG data for French Aerospace (FR35.3) remains positive and is one of our preferred product groups in the French market. Sales growth had been in steady decline from 4Q14, however an inflection point was reached in November 2014 and the positive momentum has continued. Volume growth has been the key catalyst with the most recent figure +1.9% (up from -4.7% in November 2014). While this remains below the trailing 3-year average, the momentum remains positive, with sales sitting above the broader QMG French manufacturing product universe.

  1. Kubota (6326 JP) and Komatsu (6301 JP) Stock Note

Quick snapshot from QMG highlights strength in both of these listed equities. For example, for Kubota, strength in volumes of the product group is something that does not appear to be picked up by the street. For more, click on the image to see the full report

kubota komatsu



  1. Lanxess (LXS GY) Stock Note

We map this listed equity to our Producers of Synthetic Rubber (GE24.17) product group. QMG sales observation on the back of this is also weak sitting at -13% compared with the +2% growth expected by the street. Both volumes and pricing play a strong role in this divergence. The chart below shows the movement in Lanxess pricing versus the product group movement in pricing.


Chart 1. Prices, Lanxess vs QM German benchmark (24.17)

24.17 for newsletter




POSITIVE RBC US Equity Regal-Beloit Corp 11/05/2015
POSITIVE 6326 JT Equity Kubota Corp 12/05/2015
POSITIVE 7735 JT Equity SCREEN Holdings Co Ltd 13/05/2015
POSITIVE 7731 JT Equity Nikon Corp 14/05/2015
POSITIVE EXP US Equity Eagle Materials Inc 14/05/2015
POSITIVE RBC US Equity Regal-Beloit Corp 11/05/2015




  • UK – Bank of England interest rate decision – 11th May 2015
  • UK – BRC retail sales monitor – 11th May 2015
  • UK – Industrial Production (YoY/MoM) (Mar) – 12th May 2015
  • UK – Manufacturing Production (YoY/MoM) (Mar) – 12th May 2015
  • US Change in Crude Oil Inventories – 13th May 2015
  • US Retail and Food Services sales – 13th May 2015
  • US Retail Sales (excluding vehicles and parts) – 13th May 2015
  • GE – Consumer Price Index (YoY/MoM) – 13th May 2015
  • ES – Consumer Price Index (MoM/YoY – 13th May 2015
  • US – Weekly natural gas storage – 14th May 2015
  • US – Producer Price Index ex Food & Energy – 14th May 2015
  • JA – Machine Tool Orders (YoY) – 14th May 2015


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