{GLEN LN Equity AAL LN Equity GRT D<GO>}
* Glencore - (315.85p)
- Stock has been an UP of SXPP on the last few weeks (7% of underperf on the last 3 months)
- volume growth/cost savings to compensate for a less favourable commodity mix BUT Co should deliver the strongest EPS growth rates on the next 3y (c25% vs 7% for its peer group)
- FCF policy and constant debt level should help ability of company to boost divident and return cash back to shareholders sooner that expected by the market.
- Stock is trading with a discount to peers on a PE basis (9.4 x 2015e vs 10.3 for peers)
- Q1 production on 6th of May
* Angl american - (1,552p)
- Stock has rerated on the last few weeks.
- Stock has OP SXPP by 12% on the last 3 months, upside look limited
- FY14e-15e should be tougher for AA because of Copper & Iron Ore, South Africa still at risk
- FCF generation should disappoint investors
* The Spread is trading on historic low levels as shown below, I am expecting a quick rebound to come back around teh 0.22 levels (7.5%/8% from here)
Buy Glencore Sell ANGLO