(GS) Randstad - Ipgraded to conviction Buy List

Favorable setup; up to Buy and add to the Conviction Buy List

* Source of opportunity
The risk reward for Randstad’s share price, ahead of 1Q results on April 30,
is favourable, in our view, and as such we upgrade to Buy (Neutral) and add
it to the European Conviction List. 1) The shares are the worst performing of
the staffers year to date, down 13% vs. Adecco up 2%. 2) The valuation
multiple has compressed this year from 11.5x 2014 EV/EBITDA to 9.3x (IBES
consensus). 3) Labour market data points and employment surveys are
supportive of improving growth in Randstad’s end markets; moreover, the
GS Global Lead Indicator (GLI) recently moved into an expansion phase,
historically this has correlated with positive share price performance.

* Catalyst
We forecast €128 mn of EBITA in 1Q, 11% above company compiled
consensus of €115 mn. Largely due to our gross margin being 20 bp higher
than consensus at 18.2%, reflecting further benefits from the French low
wage subsidy and a positive mix impact from improving permanent staffing
growth. A 10 basis point change in gross margin has a 3% to 4% impact on
our EBITA. Our FY14 and FY15 EPS forecasts are 10% and 12% above
consensus. A beat at 1Q would contrast the miss at 4Q which led, in our
view to the weak share price performance.

* Valuation
Our 12 month price target of €56 (was €53) is derived from a target
EV/EBITDA multiple of 10x applied to our 2015 forecasts. There is no change
in our methodology, though we change our estimates to reflect our more
positive view on gross margins, which drives the increase to our price
target. The shares trade on 14.3x and 11.4x FY14 and FY15 P/E for 26% EPS
CAGR (2013-2016).

* Key risks
Risks include overestimating the positive impacts on the gross margin, SGA
cost increases outstripping top line growth.

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: SMCI +17.2%, SKX +13.9%, SGOC +13.5% (thinly traded), XOOM +12.9%, FDML +9%, (light volume), ILMN +8.8%, NEO +8.7%, (light volume, also extends/amends Strategic Laboratory Services Agreement with Florida Cancer Specialists), SWKS +8.4%, ETH +8%, (light volume), SANM +7.9%, MANH +5.7%, SVU +5.8% (ticking higher), DPS +4.9%, GILD +3.9%, MAN +3.5%, (light volume), HERO +3.4%, (light volume), JAKK +3.1%, BA +2.5%, DAL +2.3%, YUM +2%, NSC +1.6%, PKG +1.5% (light volume), CVA +1.4% (light volume), DOW +1.2%, WRB +1.1% (light volume), HTS +1%.

Select metals/mining stocks trading higher: GOLD +0.7%, GDX +0.5%, NEM +0.4% (ongoing ABX merger speculation), GLD +0.2%.

European pharma/drug names trading higher: AZN +1.7% , NVS +1.6%, GSK +0.7% (upgraded to Buy from Hold at Argus)

Other news: ATRM +21.5% (Aetrium announces value-enhancing transaction for its test handler business), SPPI +11% (Spectrum Pharma's Pivotal Trial of Captisol-Enabled (Propylene Glycol-Free) Melphalan Meets Primary Endpoint; co expects to file an NDA in Q3 and plans to launch this drug with its existing hematology/oncology sales force next year pending approval), BIOD +4.4% (announces collaboration agreement with HEC Pharm for development of Ultra-Rapid-Acting Insulin Aspart Formulation), UNIS +3.4% (UNS Energy responds to Blog article), UQM +2.5% (UQM Technologies and Kinetics Drive Solutions Collaborate on Electric Drive Systems for All-Electric Commercial Vehicles), YELP +2.5% (positive MadMoney mention), ALU +2% (still checking), YNDX+1.9% (still checking), TQNT +0.9% (following SWKS results), CHFN +0.8% ( completed its initial stock buyback program and initiated a new repurchase program under which co may repurchase up to 2,250,000 shares of its common stock), AGN +0.8% (Allergan adopts one-year Stockholder Rights Plan; upgraded to Overweight from Neutral at JPMorgan), HAL +0.5% (positive MadMoney mention), SUNE +0.4% (Closes CAD115 Million In Financing To Build 33 MW Of Utility Solar Projects In Ontario, Canada).

Analyst comments: ATHN +4.3% (upgraded to Overweight from Equal Weight at Morgan Stanley), SPWR +2.8% (upgraded to Buy from Underperform at BofA/Merrill), VSI +1.3% (Vitamin Shoppe upgraded to Buy from Neutral at Sterne Agee), MDSO +0.7% ( upgraded to Buy from Neutral at B. Riley), ETFC +0.5% (upgraded to Outperform from Market Perform at Wells Fargo), SSYS +0.4% (3D printing mentioned positively in Citigroup Q1 preview; continues to view SSYS as top pick)

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: ZHNE -19.5%, CREE -10.5%, ISRG -9.1%, UIS -5.2%, VMW -4.9%, CBST -4.7%, (light volume), ARMH -4.2%, EMC -4.1%, TSS -4.1%, (light volume), ERIC -3.8%, ZIXI -3.4%, (light volume), IRBT -2.9%, HLIT -2.9% (light volume), CNI -2.7%, IGT -2.6%, AMGN -2.3%, T -2.2%, DFS -1.7%, JNPR -1.1%, RAI -1%, PG -1.0%.

Battery names lower following PLUG offering news: PLUG -7.9% (intends to offer and sell common stock in an underwritten public offering; files mixed securities shelf offering ), FCEL -3.5%, BLDP -2.5%, TSLA -1.2%.

Select oil/gas related names showing early modest weakness: E -0.8%, BP -0.7% (agreed to sell interests in four BP-operated oilfields on the North Slope of Alaska to Hilcorp ), RIG -0.5% .

Other news: SRPT -3.8% (announces proposed $100 mln public offering of common stock ), ICLD -3% (files for ~1.71 mln share common stock offering by selling stockholders), MCC -2.9% (announces offering of 6 mln shares of common stock, CHL -2.2% (still checking), HASI -1.9% (commencing a public offering of 5 mln shares of common stock), BBRY -1.4% and NOK -1.2% (following T / ERIC results), DEO -1.2% (still checking).

>>> Praxair reports EPS in-line, misses on revs; guides Q2 EPS below consensus;

Praxair reports EPS in-line, misses on revs; guides Q2 EPS below consensus; raises FY14 EPS slightly, raises low end of FY14 rev

Reports Q1 (Mar) earnings of $1.51 per share, in-line with the Capital IQ Consensus Estimate consensus of $1.51; revenues rose 4.8% year/year to $3.03 bln vs the $3.06 bln consensus.
  • Organic sales grew 6% driven by higher on-site volumes from new project start-ups primarily in North America and Asia. By end-market, sales growth was strongest for energy, chemicals, and food and beverage customers, as compared to the prior-year quarter. Acquisitions contributed 2% growth in the quarter.
Co issues downside guidance for Q2, sees EPS of $1.55-1.60 vs. $1.62 Capital IQ Consensus Estimate.

Co issues in-line guidance for FY14, narrows EPS to $6.30-6.50 from $6.25-6.55 vs. $6.46 Capital IQ Consensus Estimate; sees FY14 revs of $12.4-12.8 bln (from $12.3-12.8 bln) vs. $12.62 bln Capital IQ Consensus Estimate.

"Praxair delivered solid results in the first quarter with sales growth of 9% and operating profit growth of 12%, excluding the impact of currency headwinds. Organic growth of 6% reflected contributions from new projects in North America and Asia, as well as modest volume growth in our South America, Europe and Surface Technologies operating segments. Praxair's relentless focus on achieving productivity benefits and higher price to offset cost inflation produced strong operating leverage and an operating margin of 22.3%. We expect base volumes for the remainder of 2014 to continue to reflect modest growth in-line with the current macro-economic environment. Through continued operational excellence, project execution and financial discipline, we expect to continue to deliver increasing cash flow and earnings per share. We expect contribution from new projects and acquisitions to increase return on capital in the second half of the year."

Fwd:>>> Afren - Buy - Good Risk REward here .- follow up

AFR +6.8% since recommendation on the 16th, still think there is more potential even if target reached, 155 next target

----- Original Message -----
From: LAURENT CHEKROUN ()
To: LAURENT CHEKROUN ()
At: Apr 16 2014 16:46:46

* Afren enjoyed a successful year in 2013, ramping up Ebok and capping the year off with the Ogo discovery
* Kurdistan has been an early investment for Afren, and this asset could be sold and unlock value for shareholder, if no deal the stock should trade at least in line with the market
* Stock is trading with a decent discount to NPV
* 135 levels is a strong support and stock should hold these levels
* Stosk has been weak on the last few weeks and start to stabilize
* 2 brokers issued +ve recommendaation on the last 2 days (BMO & Investec)
* I see limited downside (132 level - 5% from here ) and see the stoc testing back the 145 & 149 levels.

as rumors were around on TLW stating Sinopec & Statoil could be interested, any news in the sector will push the stock higher.


--> Buy Afren