{MKS LN Equity AH NA Equity GRT D <GO>}
* Marks & Spencer
- Company pulished on the 10/04 and was weak because of misunderstanding on Q4 Gross Margin Weakness, Company is expected to publish FY on the 20th of May...but numbers have been adjusted now
- M&S generak merchamfise should continue to head in the good direction, food is quite isolated from a branded food price war
- Strong execution from management and potential cash return could help the stock to rebound
- Historically MKS is trading with a 20% to UK Market P/E, trading only with 5% now
* Ahold
- Since Last publication on 27th of Feb stock outperformed the SXRP by 7%, publication can justify that move but there is no clear reason on fumdamentals
- weak LFL sales growth in the US (-2.1%) and in the Netherlands (-1.0%),
- Risk of stiffer competition and margin rebasing in the Dutch market (more powerful competitors, with in particular Jumbo)
- Still no real signs of pick-up in volumes or food inflation in the US
- It looks fully valued to us – trading at a 2014e P/E ratio of 13.7x vs 12.8x for peers
* The spread is trading on bery low historical levels - we can see a quick reversal, historical lows (-3.3% / 29.86 )
MKS 410 levels appear to be a strong support, stock can trade quickly to 460/470 levles
AH : 14 levels are a strong resistance, could see stock trading back on support 200d MA on 13 levels
BUY MKS SELL AHOLD