Special Situations/Relative Value: TNT, remember?
BUY
TNTE NA: Eur4.99
September 30, 2014
With TNT below Eur 5/sh, it may be worth getting back in the company for which UPS had offered Eur9.50/sh in Feb 2012. Since then, revenues and operating income have remained stable, and the net income has gone from a loss to an expected gain, although ebitda will be slightly lower in 2014 than in 2012. Moreover, because of the Eur200 terminating fee, TNT has most solid balance sheet of the major delivery companies with a net cash position in excess of Eur 400m. The company recently had a profit warning and the stock collapsed by over 10% last week. We view the price dislocation as an opportunity to build up an investment position in TNT. FY2014 could be a trough year, and a recovery is not priced-in the current share price. Obviously, a bid by Fedex or another party is not priced-in either.
FULL REPORT ATTACHED
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