Eat Fast and Healthy

“And this is where Bidcorp are likely to benefit, along with their peers. By delivering more prepared foods to supermarkets and restaurants, with the correct mix of quality (and trends), they will capture a large slice of the emerging eating habits of people.”


 

To market to market to buy a fat pig OK, time to take stock. Things globally have settled, the current president of the US has met the future one, the future one has certainly toned down all the combative talk. Loads of analysis has been done on how and why, it seems that a lot of people are a bit bemused to the way that the US electoral machine works. It is what it is, there is little or nothing we can do to change the outcome. I suspect that the folks will continue to gain momentum, and then perhaps (like the occupy Wall Street movement), the weather may get the better of the protesting many. I have little idea of knowing how the general population will feel, for one thing however, there has certainly been a significant jump in nationalism in developed countries.

The influx of skills from all around the globe have impacted on locals, their way of life and most especially a yearning for an era that is unlikely to ever return. The internet and globalisation have set a course for humanity, I suspect that it would be exceptionally hard to reverse that. The fact that skills can move so freely should be celebrated, that makes many more countries having to do more to keep their skills. That can only be good for global productivity in the long run. The internet, although still not adopted by the masses, can prove to be the greatest of all levelers. The fact that you can learn anything from anywhere, provided you have a connection is pretty mind blowing. People want to share and better one another. Contrary to popular belief. Obama is actually in Athens this week, delivering a speech about the benefits of globalisation – Obama to Reassure EU Allies, China on Final Trip.

Stocks in New York, New York on Friday closed mixed, another record for the Dow Jones Industrial Average, up one-fifth of a percent to 18847 by the close. A skip hop and a jump away from 19 thousand points. I have a hat that says Dow 36,000 that Paul got for me in New York. I may well still be a number of years away from that target, it may sneak up on you quicker than you think. At the end of the day, it matters what the earnings are, or are likely to be, what the market is willing to pay for those earnings. The broader market S&P 500 was the only one of the majors to close lower, down 0.14 percent by the close. The nerds of NASDAQ added just over half a percent. Basic materials and energy stocks sank as prices waned.

Since Trump has gone from outsider to president elect, the stock market in the US has added over five percent. Obviously not all stocks have benefitted, banks and pharma have been the big winners, many tech stocks have not done as well. Five sessions, the Dow has comfortably beaten the rest, up 5.36 percent, whereas the nerds of NASDAQ are up 3.75 percent, whilst the broader market S&P 500 is up 3.79 percent. I guess that is as a result of being a proxy for the US (the Dow Jones), better than their peers that is.


 

Locally the market fizzled and fell, stocks were whacked again as emerging markets bore the brunt of global selling. There was broad based selling across the board, pretty much nothing caught a bid and the sellers reigned supreme. The All Share sank two and one-third of a percent, the Rand was under a little pressure again, although recovering a little later. The Pound to the Rand had an 18 in front of it again. A week ago it looked like we may well have a 15 in front of it, how quickly it all changes and I guess there are never ways to predict outcomes clearly. Although as Michael pointed out, Clinton did “get more votes”, so perhaps the pollsters are right in some sense.

The stocks that bore the brunt of heavy selling were Steinhoff, AngloGold Ashanti and Naspers. The stocks that attracted some buyers, mostly as a result of the weaker currency, were Hammerson, British American Tobacco and Intu. This morning there is a whole host of trading updates and results. Tongaat, Vodacom, Invicta, Mr. Price, AngloGold Ashanti and Woolworths. A whole host of updates and happenings.


 

Company corner

Bidcorp stuck out a trading statement in the afternoon, that coincided with their AGM. It was more of an update than an actual trading statement, as they only have around 4 months of data to work with. Plus, as they have a significant business in the UK, you can imagine that they are all trying to work out what this means, the implications of a weaker UK currency and potentially weaker UK economy. Bidcorp also, as a result of the splitting of the business from the original Bidvest, have very little from a comparisons point of view.

They do say: “Overall trading within Bidcorp for the first 4 months of the financial year 2017 has been good and the positive momentum achieved in the financial year 2016 has continued. Currency volatility continues to positively impact Bidcorp’s Rand reported results with the depreciation of the Rand against the Euro and Australian Dollar more than offsetting the appreciation of the Rand against Sterling following Brexit.”

So …. we will have to wait and see what transpires. The Brexit “thing” next event is December where the courts decide whether or not the government appeal is successful. If not, then it goes to a parliamentary vote, and politicians will decide in a vote whether or not they want to take themselves away from 43 years of treaties. Try and unpick that all in a hurry. There is the small matter of 508 million Europeans here, who will have to live with the consequences and the precedent set. We watch, like all others.

It is the introduction line in the trading statement that continues to attract us to this investment: “Overall conditions within the global foodservice industry remain positive and continued growth opportunities remain in all our trading geographies. Many of Bidcorp’s international foodservice peers have reported improved results benefitting from positive underlying market conditions.”

The stock initially rallied over 6 percent, and then some more, it settled back (on a very poor day for the markets overall) and closed 3 percent higher on the day. Forget for a second about kale and beets crisps and all the other healthy eating trends that have captured rich people and millennials for a moment. Time is something of a luxury that many people simply do not have. So eating fast, and making sure that it is healthy, will continue to become a trend.

Not only will people look for more ready to cook meals, they will look for more ready prepared meals. And this is where Bidcorp are likely to benefit, along with their peers. By delivering more prepared foods to supermarkets and restaurants, with the correct mix of quality (and trends), they will capture a large slice of the emerging eating habits of people. We continue to accumulate what is a good business with great people and excellent prospects.


 

Linkfest, lap it up

This may be a very small part of Facebooks business, but it will grow and it is an extra revenue stream – Facebook has signed up Singapore’s entire civil service to its Workplace chat platform.

It looks like a matter of time until weed is legal all over the US. By extension other countries globally will start legalising it. From an economic point of view, getting taxes from weed sales is better than spending money to try fight it – The States Where It’s Legal To Smoke Marijuana

Infographic: The States Where It's Legal To Smoke Marijuana | Statista
You will find more statistics at Statista

Due to the world being filled with randomness our brains try to make sense of it by connecting the dots we can see. The result is something called hindsight bias, where past events seem obvious that they would occur – Everyone Knew Trump Would Win All Along. Just given that Hillary won the popular vote shows that it wasn’t obvious that Trump would win the election.


 

Home again, home again, jiggety-jog. Stocks are mixed again across Asia, a pretty good GDP read for Japan this morning, mainly led by exports – Why Japan’s Economy Posted Surprisingly Strong Growth. The US futures market is pointing higher, the cricket fellows are doing exceptionally well. Tencent have taken a bit of a pasting, that will no doubt have an impact on our local market.


 

Sent to you by Sasha, Byron and Michael on behalf of team Vestact.

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