Markets Live: Wednesday, 6th November, 2013 This is the transcript of the Markets Live session ending at 12:04 on 6 Nov 2013. This is Markets Lie Right bryce is here And I have our portrait to hand New mayor of new York City Not sure he has a beard now Especially in that he has a cool wife Who used to be a very open and vocal lesbian Very open and cool about it Anyway, I'm glad to see the back of mayor Bloomberg Inc Putting his bloody name on everything Agree. From what I saw, he seemed intent on turning NYC into Disneyland Gotham City. Well, Manhattan and Brooklyn certainly rest was left to rot Tried to firehose out all the grubbiness downtown. I liked the grubbiness. Manhattan now safer than Singapoe And just as dull, pretty much. Anyway, should we start somewhere financial? Before we go to the London market Can we just discuss these Toyota figures We had Mo on AV earlier discussing these Yes, I can claim to be on "Mo" terms with Mohamed El-Erian Discussing whether this is a beneficial transmission of QE (MupCentral: yes, possibly. But I've grown too now old to queue outside a nightclub I don't want to be in.) But also note this out of SMMT here today This is a Citi snap The SMMT reports that the number of new car registrations in October rose 4.0% YoY, after growth of 12.1% YoY in September. Base effects from the strong Oct-12 reading (up 12.1% YoY) helped pull the YoY growth rate lower this month. Over the year to date, registrations are up 10.2% YoY and at the highest for January-October since 2007. With only two months to go, car registrations for 2013 as a whole probably will be up by 9-10% YoY, the highest growth since 2001 (up 10.7% YoY). Car registrations have picked up strongly since around mid-2012, and were one of the first indicators of the general UK economic recovery that is underway. Key factors probably are the fairly strong gains in employment, rising consumer confidence and easier credit availability, as well as replacement demand: the share of cars in use that are below five years old fell to 32.5% in 2012, the lowest since data began in 1994 and versus 43.6% in 2004 and 40.5% in 2007). I bought a car last week A huge Jeep that Im shipping to Moz It's eight years old, perfect nick And it cost me 3 grand 36k down to 3 grand in eight years Second hand car market has collapsed, as far as i can see Would be interested in thoughts/insight here Seems to me that the big car makers have captured QE They've found a direct source to free money hence all these no deposit leasing deals Where you can get just about any new car for 300 quid a month So the way we are pump priming the economy is by putting everyone in a new motor Is that sustainable?? Shipping costs for a car to Moz are 800 quid for the record - but then have to pay import duty, which varies Just heading over to the US, similar picture to here. Oct US Auto Sales were pretty uninspiring. With Japan seeming to be losing share to the domestics. Quick line from Morgan Stanley on that. Oct US auto sales SAAR of 15.23mn units matched our forecast (15.2mn), rising 6.6% YoY but at the lowest level since Apr. The partial government shutdown in the first half of the month apparently took a toll, but we estimate retail SAAR of ~13.0mn unit, which is not a weak level. Gasoline prices have been coming down recently, and light trucks are solid. The concern is industry incentive levels, which have not been high since 2000 in outright terms, but were up 11.9% YoY in Oct, the first 2-digit spike since May 2012. Japanese brands" share dropped to 35.9%, falling for light trucks. We focus on the improvement trajectory for Japanese share ahead, with model year switch timing approaching. FHI's strength continues to stand out. Note the "incentives" line, which is what you were talking about. Incentives: AUTODATA puts industry avg. at $2,574/ unit, up 11.9% YoY, for an 8 month streak of YoY increases after bottoming in Feb. Absolute levels are not alarming, but the trend needs watching. While the D3 and Korean makers lifted incentives in Oct, the J3 overall made cuts of 1.2% YoY: Toyota increased by 15.3%, Honda and Nissan cut by 16.7% and 5.1%, respectively. Mazda incentives were up 13.3%, but mainly to sell off the Mazda3. FHI's incentives are by far the industry's lowest, and were reduced by 13.6% YoY. Good theme. Will need more work. Continuing on from yesterday, i know But it's a chunky move Associated British Foods PLC (ABF:LSE): Last: 2,337, up 129 (+5.84%), High: 2,349, Low: 2,199, Volume: 736.84kBlock So .... there's a real fight developing here. Half of The Wharf is saying "you're paying 21 times current-year earnings for no growth, are you nuts?" And the other half is saying, "ah, but the growth's later. Much, much later. Starting with the bear case, Merrill sets it out very well. They reckon that when you put the rest of AB Foods on 14 times calendar 2014 - which still looks extremely punchy for sugar processing and Ovaltine - then Primark's on 26.4 times Which is a premium to its European peer group, H&M and Inditex. Primark on 26 times This is how Merrill break up the PE ratios. Actually, let me share the note as well. It's an "all in the price" type argument. YTD, ABF's shares are +39% (+20% in October) outstripping both Inditex (+12%) & H&M (+20%) on cont'd optimism for Primark's expansion. Post solid FY13 results (p.3) we believe ABF's valuation is now fairly full. The shares trade on a FY14E PE of 21x (hist. range 12-19x). Primark now trades on an implied CY14E PE of 26x (10% premium to H&M & Inditex), assuming the rest of ABF trades on 14x (p. While we are big fans of Primark's long-term growth prospects (we forecast 1.3m sqf in new space in FY14), retail still only comprises 50% of ABF's profits and faces particularly challenging LfL comps of 7%in H1 while Sugar remains under pressure. We leave our FY14E EPS unch. but cut our FY15E EPS by 3% on FX and lower EU sugar profits. We lift our PO to £23 reflecting the re-rating of the EU retail sector. Ah! Say the bulls. Shift the numbers out to 2015 and Primark's suddenly at a discount to peers. Bump them out to 2019 and it's cheaper than a Bangladesh-stitched hoodie. Morgan Stanley incoming ... Primark growth is set to accelerate with over 1m sq ft of additional selling space in FY14e vs. 0.8m in FY13. We forecast Primark LFL growth p.a. of 4% and selling space growth p.a. of 12% over the next 5y and we expect Primark to account for 57% of group profits by FY18e. Our reverse SOTP implies a 10.4x 2015e EV/EBITDA for Primark, a 20% discount to peers. As Primark continues to outperform and accelerate its expansion in Continental Europe, we see this discount narrowing. ...while momentum in Grocery should continue to strengthen. Expect the margin improvement in Grocery to be mixm driven as high margin businesses such as Twinings Ovaltine, Patak, Blue Dragon continue growing double digit. ABF now trades in line with its 5-year average PE relative to EU clothing retailers. We think this does not reflect the fact that Primark's contribution to group sales and profits has increased by 9p.p. and 8p.p, respectively, over that period. We expect this valuation gap to narrow over the coming months as Primark continues to outperform and accelerates its continental Europe expansion. While we view FY14 as a year of transition, we expect Primark to drive 8%+ group top-line growth and 11-13% EPS growth from FY15e, making ABF one the most compelling growth stories in our Staples universe. EU sugar prices and industry profitability have already started to reflect new market mechanisms, and we expect newsflow to continue to deteriorate over the coming months. And UBS, who make the most convincing case I've read .... we believe the best way to value AB Foods is to look at the sum of its parts. Within that sum of the parts, the "jewel" is Primark (currently c50% of group profits). Primark is a hard discount clothing retailer that combines very low prices with a "fast-fashion" component to generate best-in-class sales densities. This formula has been very successful in the UK (where Primark has consistently grown share for over 15 years and currently accounts for c5% of the apparel category) and is now being rolled out successfully in continental Europe (indeed sales densities there are even higher than in the UK). However, with so far only 50 stores in continental Europe (two thirds in Spain), Primark is at a very early stage in its international development. To capture this long term growth opportunity, we value Primark employing a 20yr DCF (that assumes 9.5% sales CAGR, of which 2% is LFL). This involves a quadrupling of floorspace by 2033, which assuming a slightly bigger store size, implies c825 stores (H&M currently has 400 stores in Germany alone). Our £12bn valuation for Primark equates to a CY14 EV/Ebitda of 16x; versus Inditex on 15x and H&M on 14x. Whilst Primark's hard discounter business model (low gross margin/high sales velocity) means it is not as cash generative as those two retailers, it is (from a much smaller base) currently growing its top-line significantly faster (in FY13 Primark's constant currency sales grew by 21%). In addition AB Foods has in the past accelerated Primark's roll-out by acquiring existing retail operations and converting (the most attractive) stores to the Primark format (e.g., the acquisitions of Littlewoods and C&A in the UK). It would not surprise us if management employed this approach in continental Europe, particularly in Germany where there is a significant amount of department store floor space currently generating very low returns. In our view the four critical KPIs for Primark are; (1) Continuing to grow share in its origin markets of UK/Ireland. (2) Continuing to enter new markets. (3) Positive LFLs in continental Europe. (4) Improving sales densities. Providing it "hits" all four (as it is currently), we think the burden of proof will be on those who question its international capability. Based on the current share price, our £12bn valuation means Primark represents c.70% of AB Food's market capitalisation. Whilst this means that investing in AB Foods is an effective way of "playing" the Primark structural growth story, it implies the remainder of the group is trading on an EV/Ebitda of approximately 6x. Whilst the "rump" includes attractive businesses such as Twinnings Ovaltine, it also includes a commodity sugar business, where we have recently seen a number of downwards revisions to estimates. Defensive growth, in theory. Though you're paying 22 times earnings for it, and it's not growing. Oh, and we should note that since Weston owns about 60% of AB, squirreled away in assorted trusts, it tends to be squeezy. Anyway, that's yesterday's news. Should we move on to today? What's leading the fallers board? Another defensive growth company, having problems delivering both qualities. Experian PLC (EXPN:LSE): Last: 1,181, down 82 (-6.49%), High: 1,200, Low: 1,152, Volume: 2.56mBlock Now, there's a lot to dislike here. H1 results are pretty poor. But more importantly, the company's done another wildly ambitious non-core acquisition. Paying 28 times EBITDA for a healthcare billing thing Seven times sales. And that means the share buyback has been cancelled. Or at least suspended. The target is a thing called Passport Health The idea seems to be to drop Experian credit checking into its hospital billing systems Making a one-stop shop of sorts for healthcare bills. But this is a travel jab place, right? Ah, sorry, I got an American version of Sales growing 20% at the moment, but healthcare billing's been a horrible market for umpteen companies in the past. Jefferies don't like it at all. Interim results are in line with expectations but the debate today will centre on value creation after another sizeable acquisition. Although the Passport Health Communication transaction should be EPS accretive, we believe EBITA needs to increase from $30m to $80m to cover its cost of capital. With the shares now trading at our price target, we downgrade from Buy to Hold. Passport Health Communications acquired for $850m. In addition, Experian has announced the acquisition of Passport Health Communication, a provider of data, analytics and software in the US healthcare payments market for $850m. According to Experian, PHC will generate $30m EBITA on $121m revenue in the 12 months to December 2013 and c $40m EBITA on $145m revenue in 2014. Organic revenue growth is c20%. Significant EBITA uplift required to cover cost of capital. As with the acquisition of 41st Parameter last month, value creation is likely to be the main focus of investor debate. While we estimate that the transaction will be c1.5% EPS accretive in FY14E aided by the 2% interest rate that Experian currently pays on its revolving credit facility, exit multiples are 7x price/sales and 28x EV/EBITA. To cover its cost of capital, we calculate that PHC's EBITA needs to increase from $30m to $80m. In terms of the numbers, there's a mild profit warning in here. Though it seems the consensus had already anticipated the guidance cut. So some flack will probably chew us later for calling it a profit warning. H2 organic revenue growth "similar" to H1 Previous guidance was for a mid/high-single digit increase "Similar" would be 6%, which isn't a high single-digit by my reckoning. Merrill also downgrades. We are lowering our rating to Neutral, reflecting valuation (the shares are close to our PO after rising 10% over the last month) and some disappointment on short term organic growth. Investors may also question the shift in capital allocation to more expensive M&A. We still believe that Experian has highly attractive fundamentals and growth prospects. We are tweaking EPS down by 2%, incorporating lower organic growth (5.5%) in 2014, a higher tax rate (27%) and FX (-1%) partially offset by the acquisition of Passport Health (1.5% enhancing in 15). Our new EPS of 92c and 103c in 14 and 15 are similar to the Bloomberg consensus. Experian reported in line 1H results, with EPS of 42.5c, +10%. 1H organic growth was 6%, including 5% in Q2 v BofAML's 7%. Q2 organic was weaker than expected in LatAm (5%), where Credit slowed on fewer consumer delinquencies, and Americas (4%), where Credit slowed on mortgage and Analytics was down (but this is phasing). EBITA margin was 26%, flat v our expectation of -30bps on FX (BRL). FCF was US$400m v $315m, reflecting lower CapEx and Serasa (no minority divs). Experian announced the acquisition of Passport Health Communications for US$850m, for which we have included US$145m sales and US$40m EBITA in 15. It is immediately EPS accretive and should enhance organic growth by ~0.4ppts from Q4 15 but may not be EVA accretive for Pro forma ND/EBITDA is 2.4x (falling to 2.2x by end March) and the share buyback has been suspended for now. Sorry, will try that last par again. It is immediately EPS accretive and should enhance organic growth by ~0.4ppts from Q4 15 but may not be EVA accretive for greater than 3Y. Pro forma ND/EBITDA is 2.4x (falling to 2.2x by end March) and the share buyback has been suspended for now. @fjp73: I think the valuation makes a wee bit more sense if you assume Passport uses someone else's credit data right now, so it is in effect Experian acquiring a customer from a rival as well as buying a business. Though "a wee bit more sense" is still not a lot of sense. thanks for all that Bryce We should note the threatened closure of Portsmouth dockyard Or at least BAe closing its ship building there I grew up in Portsmouth Dockyard under threat since I was about 10 Which is some years ago Shipbuilding happens nearly exclusively in Korea and Brazil now, doesn't it? And ship unbuilding happens in China fjp73 - this is true The redoubtable Sandy Morris, of BAE's house broker Jefferies, says this ..... Scylla and Charybdis. We believe the UK warship industry has been on the horns of a dilemma ever since the Queen Elizabeth aircraft carriers were ordered in July 2007. In short, the programme represented a surge in activity. It has never been clear quite how industry would come down again, so to speak, even though the Terms of Business Agreement (TOBA) agreed between the MoD and BAE in July 2009 provided guarantees to BAE of a minimum level of ship build and support activity of around £230m per annum, a level that was independently verified as the minimum required to sustain a credible warship building industry in the UK. The TOBA was designed to incentivise major reductions in the size of the industrial base on a managed basis to minimise the rationalisation costs for which MoD was already liable under historical Yellow Book rules. While the decision to build the carriers has always been separate to rationale behind the TOBA, we wonder whether the potential amendments to the aircraft carrier contract have now become linked to the TOBA and to a possible commitment by the MoD to the proposed Type 26 Global Combat Ship. Clarity, certainty and calm. We suspect the QEII carrier programme and the long-term capacity and capability of the UK warship industry were not at the top of investors" "to do" list for BAE, but we believe it would be positive to have greater clarity on both. Meantime, the debate rages over whether "vibrant" activity in export markets - as stated in the recent IMS - is more or less positive than the "strong" used at the 1H13 stage. It would, obviously, be good were BAE able to conclude the Salam pricing negotiations, not least because it would eliminate another potential source of confusion. On that subject, we reiterate that at the FY12 stage BAE stated such agreement could increase FY13 EPS by around 3p. BAE did not comment on the possible impact at the 1H13 stage. In the recent IMS, BAE did, however, state that were negotiations to extend beyond 2013, EPS could be impacted by 6p to 7p, the increase reflecting the Eurofighter aircraft delivered during 2013 on which we believe one can reasonably assume there is little or no profit recognised given the outturn of the contract depends upon the revised pricing. The Dubai air show also looms on 17 November. It is possible that may provide an opportunity for an update on progress between the UK and UAE on establishing "a defence industrial partnership that involves close collaboration around Typhoon and a number of new technologies." BAE Systems PLC (BA.:LSE): Last: 455.70, up 2.4 (+0.53%), High: 456.80, Low: 454.10, Volume: 787.28kBlock They've been building warships in Portsmouth for about 500 years Today marks an end of sorts for Great Britain's seafaring ways, and investors care more for an order of poncy jets to sit in hangers in the Middle East. (At least, we assume they will sit in hangers. The idea that they might be used and anger doesn't bear consideration.) We can't ignore the strength of barclays Barclays PLC (BARC:LSE): Last: 257.15, up 8.15 (+3.27%), High: 257.30, Low: 249.55, Volume: 21.93mBlock Lucky I held steady there ian Gordon to the rescue Firm pair of hands, Gordon The keenly anticipated round of EURIBOR fines/settlements, from which we believe that Barclays may well be "immune," serves as a reminder; if only all banks acted with the same integrity as Barclays, the sector might be in a much better place? Under Sir Bob Diamond's leadership, Barclays was the first bank to report, confront and settle the LIBOR issue, (inter alia alerting the European authorities). As such, contrary to populist perceptions, we see Barclays as notably less exposed on legal/regulatory issues than peers. There are number of points here. Firstly, if just one thing has become clear since Barclays" pro-actively settled with the UK/US authorities for c.£290m over LIBOR-related issues in June 2012, it is surely that the costs of UK redress for PPI/IRHP misselling are likely to dwarf all other legal/conduct issues combined. This appears true (1) for Barclays itself, which has already set aside £4bn for PPI/IRHP (and with £2.6bn still "in hand," it appears to be more conservatively provisioned than peers), and (2) for UK peers generally, where Lloyds (Hold) has now provided £8bn (and counting) for just the PPI issue. We do not seek to judge the relative "guilt" of banks in relation to LIBOR, Forex etc. However, we believe that Barclays has been financially well served for its pro-active approach on LIBOR. On other issues, e.g. IRHP where Barclays has been more pro-active than peers in settling redress cases, we believe it may incur higher costs for taking an apparently more constructive approach. Given that CP5/13 appears to be provoking extreme fear among investors in terms of how far/fast capital requirements may rise, it is worth recalling that, on 30 July, the PRA explicitly "agreed and welcomed" Barclays" capital plan, established with prior regard to the requirements of UK implementation of CRD4 as now addressed in CP5/13. CEO Antony Jenkins remained robust on his 40-50% payout target at the Q3 call. We see a 2015e dividend yield of 7%! Buy recommendation and 300p RoE-g/CoE-g derived TP reaffirmed. Bit light on his TP, but there you go Blinking Money Supermarket I know the outlook statement was positive Moneysupermarket.Com Group PLC (MONY:LSE): Last: 183.90, up 28.9 (+18.65%), High: 184.00, Low: 170.50, Volume: 7.68mBlock Actually, I don't know. They've been rubbish post the interims. Down 26% since the half year, so that's a hell of a rally. Matthew Price from Costa Oh, he's from Costa? What should that tell us? Whitbread has a Costa investor seminar later this month I think. Where the obvious question is, "when are you going to float Costa." My impression is, "no time soon," and the exit of management surely makes that answer even more likely. Whitbread PLC (WTB:LSE): Last: 3,461, up 2 (+0.06%), High: 3,462, Low: 3,443, Volume: 50.51kBlock Anyway, back to MoneySupermarket. Revenues have picked up But it's all from the smaller stuff. Travel, Home Services, that kind of thing. Money, the key market, is still weak because of Funding for Lending. Insurance flatlining. You'll remember Google monkeyed with its search algorithm and MONY's insurance share fell through the floor. To me, that looks stabilised rather than fixed. Smacks of a short squeeze But there's no real evidence of heavy shorting of MONY Note also that they weren't even due to announce today. Brought the statement forward a week, just to mess with us. Let's see if Jefferies (again) can shed any more light on this one. MoneySuperMarket.com (MONY LN): 3Q - Seems Cats Beat Penguins, Eventually, in a Scrap - 4Q13 Looks Better - BUY Poor communication helps make MONY tough to call. Recent work suggests things are improving from the "July flat," but perhaps not fast enough to make for a great 3Q. Penguin has impacted, though recent data shows a marked improvement. Thus there may be a speed bump, we cautiously suggest, yet the structural growth opportunity remains intact for this market leader. The MSE deal creates a robust USP and downside to FY13 adjusted EBITDA is limited. Key takeaways from the 3Q13 IMS. Probably five key takeaways from the print today; • 3Q13, revenues +5% YoY, following a "flat" July, not bad, weak versus our +10.4% expectation for FY13 and pretty much what we outlined in Monday's note. • A robust EBITDA performance, up +26%, another strong performance following 1H13, bodes well for FY13 EBITDA and cash conversion. • MONY outlined a "very strong start to 4Q13′, consumer engagement around ramping emerging prices and contract switching helping drive group revenues +25% in October, suggesting that our +10.4% estimate remains eminently achievable. • The divisional view, Money down -4%, better than 1H, Insurance +2% ahead, weak. • EBITDA expectations for FY13 guided +5% against consensus at £78.4m. Limited visibility ahead, but we like MONY. The only confusing commentary today was the emphasis on energy switching, the home vertical was c.6% of the revenue mix in 1H13, so to deliver +25% for October across the group, it must have either performed spectacularly or there was a rebound in one or more of the more material verticals too So to conclude, the Running Cats beat up the Penguins. The penguins appear to have been vanquished and the company appear on track in the reconstruction of their organic search rankings. It appears that the "running cats" played their part and one would perhaps expect growth in the key verticals to look a little better across 4Q13. At this stage we envisage very little impact from the "Hummingbird" algorithm change executed at the end of September, indeed it may work to MoneySuperMarket's benefit. (What on earth is David Reynolds on about? I feel like I was off school sick the day this cats/penguins thing was taught ...) (Is it advertising? is is a ref to Meerkats of Compare the Market, maybe Oh, and Mr Reynolds says he likes the FD, basically because he can't make things any worse so will therefore possibly make them better. And a new CFO appointment. Matthew Price, currently Finance Director at Costa Coffee will take over from Paul Doughty in 1Q14. Costa Coffee well regarded by our Leisure team and whilst Matthew appears to have no real public company CFO experience, we take this news positively, because if nothing else, financial communication seems to be going up the MONY "to do" list. Paul Doughty achieved much at MONY, but given the lack of an investor relations professional, we felt communication wasn't a top priority. Our hope is that MONY follow up this hire, with an investor relations one. Oh, hang on. Someone's sent me Jefferies" previous note on MoneySupermarket to explain the analogy .... MoneySuperMarket.com: MONY LN: BUY: Two Penguins vs. Running Cats, on a Banana Skin - Possibly a Tough Q3 for MONY Oh, sod it. Let's come back to it on a quieter day. Okay, Paul's on the phone. Just a potential bitcoin story Oooh. Always appreciated. Did you catch Max Keiser on Have I Got News For You? on Friday? Anyway, more results I guess. Oh, actually, rather than that ...... Unilever PLC (ULVR:LSE): Last: 2,478, down 57 (-2.25%), High: 2,511, Low: 2,478, Volume: 1.83mBlock But there's also a Nomura downgrade around. It's an odd sort of downgrade. Says P&G's likely to roll back on competition, but there are more important things to worry about. Base case assumes P&G volume focus softens to make FY guidance Our assessment of 3Q13 weaker sales suggests pricing levels should improve into 2014, as P&G's recent focus on volume momentum in overlapping HPC markets (at the expense of price and margin) needs to rebalance if P&G hopes to make its FY2014 (to end June) guidance. This leaves Unilever with an opportunity to recover sales growth momentum through 2014, re-establishing itself as an improved value-creating entity vs the past five years. This base case (which we ascribe a 75% probability) derives a fair value of EUR 32 with a TSR of 14% over 12 months. But takes account of risk EMG slowdown/P&G momentum persists We under-estimated the extent of a potential EMG slowdown and the refocus of P&G on volume growth momentum this year. The scale of slower contribution from EMG in 3Q and P&G's apparent ability to be a disruptor in key markets makes it prudent to seek early evidence of stable/improving trends in 4Q13. We ascribe a 25% probability to a bear case, with persistent EMG and P&G trends leading to lower sales growth in 4Q13 (vs 3.3% in 3Q13), FY2013 margins down ~20bp y-o-y, and FY2014 sales growth of just 4.1% on flat sequential pricing in HPC divisions. This derives a fair value of EUR 25. Weighting base case & bear case derives target price of EUR 30.2 A weighted-average target price of the two scenarios is EUR 30.2 (-6%), implying 4% upside potential. We downgrade to Neutral as we see minimal returns until FY2013 results. If P&G reports sequential pricing in HPC in C4Q13 and EMG trends stabilise, we may shrink the "bear case" weighting. Adjust base case to reflect pricing closer to P&G & consumer needs We trim FY2014E adjusted EPS 2% to EUR 1.57. This reflects an organic growth assumption of 4.9% in 2014 (from 5.3%) as our base case reflects a need to align price points in HPC following falling sequential pricing at P&G, and the extent of slower EMG growth, notably in Food/Refreshment, a category more sensitive to the economic environment, in our view. 18.5x P/E (2014E) & FCF of 4.8% investable as challenges subside Oh, and while on consumer goods ............. Reckitt Benckiser Group PLC (RB.:LSE): Last: 4,789, down 24 (-0.50%), High: 4,830, Low: 4,784, Volume: 190.60kBlock Brenstein arguing that Reckitt should buy Novartis's Consumer Health/OTC business Assuming it's for sale, which it probably is though we've had no official word I don't think. Puts a value on the unit of $11bn-$12bn And would mean health would become 43% of Reckitt sales Making Reckitt equal with J&J in the ORC medicines world ...... What that'd mean for Reckitt's heroin business: not sure. Assume it would need to be sold just for the funding. Good fantasy M&A from Bernstein though. Always lively. Twitter gets priced today And begins trading tomorrow range is crca 23-25 $ i think Some fun research from Aviate here Which bryce dug up late yesterday We should have an end of first day comp But we can have that comp properly tomorrow We've got to run now yes, we'll find a prize