THE BEST INVESTMENT IDEAS OF 2017

Transcription

1 THE BEST INVESTMENT IDEAS OF 2017

2 DEAR CLIENTS, 2017 was a year of many significant economic and political developments. They include the inauguration of US President Donald Trump, the presidential election in France, the parliamentary elections in Germany, the Catalonian independence referendum, Brexit negotiations, sweeping tax reform in the US, threats of sanctions by the US to several different countries, strained relations between the US and China, North Korean nuclear tests, continued fallout from the Syrian civil war, the steady recovery of oil prices, natural disasters (hurricanes Harvey and Irma), and crypto-fever among other things. The dynamics of the world s major stock markets reflect these developments, as do the performance of our structured products, and in this presentation we d like to share some of the successes we ve had in this regard. Our popular structured products service was launched by Alpari in mid and has seen increased demand from investors over the years. We re constantly making improvements to the terms of purchase for our products to make investing in them more attractive. The service not only allows you to take advantage of relevant, ready-to-use investment ideas, but also to use our unique Capital Account, allowing you to automatically receive funds secured by your structured products, which you can invest in Forex or our PAMM service. WE RE CERTAIN THAT 2018 WILL PROVIDE A GREAT NUMBER OF NEW, HIGHLY LUCRATIVE IDEAS! FOR NOW THOUGH, HERE ARE LAST YEAR S TOP 6 MOST PROFITABLE INVESTMENT IDEAS

3 13 98% 65% 33% 70.3% Asset yield per 122.2% 44.7% 80.8% Product yield per * Investment period: from 21/02/2017 to 29/12/2017. Capital protection: 95%. Ferrari is a world famous sports car manufacturer. The company was founded in the first half of the 20th century. In addition to sports cars, the company also offers second-hand vehicles, warranty programs, sponsorship programs, technical assistance, watches, clothing, headphones, headwear and other accessories. Ferrari sells its products all over the world, and in geographical terms, its revenue is distributed as follows: 14% from Italy, 41% from the rest of Europe, the Middle-East, and Africa, 28% from North and South America, 8% from China, and 9% from other countries in the Asia-Pacific region. Ferrari s headquarters is located in the Italian town of Maranello. The increase seen in share prices was down to the continued implementation of strategies to expand production and to the successful release of new popular models. In the 1st, 2nd, and 3rd quarters of 2017, the company s revenue grew by 21.5%, 13.5%, and 6.7% respectively (year-onyear), while profit margins grew by 59.5%, 29.6%, and 25.1% respectively (year-on-year). In addition to this, the company s debt load has continued to get lighter. In the 3rd quarter of 2016, Ferrari s ratio of debt to total assets stood at 52%, while by the end of the 3rd quarter in 2017, this value had dropped to 44% (during this period, the ratio of total debt to EBITDA dropped from 2.83 to 1.80, while the ratio of net debt to EBITDA fell from 2.21 to 1.18). The marginality of the business has significantly improved: in the period from the 3rd quarter of 2016 to the 3rd quarter of 2017, the ratio of net profit to revenue increased from 14.2% to 16.7%, return on equity grew from 23.3% to 116.7%, return on assets grew from 7.5% to 12.3%, and return on invested capital grew from 12.3% to 21.4%.

4 % Asset yield per 35.3% 1.5% 10.8% Product yield per * Investment period: from 21/02/2017 to 29/12/2017. Capital protection: 98%. General Motors Co. (GM) manufactures and supplies the market with personal and commercial vehicles as well as providing security systems, maintenance services, spare parts, and auto-financing all over the world. Their main brands include: Chevrolet, GMC, Cadillac, Buick, Holden, and Autobaojun among others. It is the largest American car company and has established retail networks in 192 countries and manufacturing facilities in 35. Geographical revenue distribution - North America: 74%, Europe: 12%, South America: 5%, Asia, Africa and others: 9%. Maintaining the company s level of marginality, along with a moderate debt load and significant liquidity, has contributed towards an increase in the share price; the ratio of net profit to revenue is 5.8%, the return on invested capital is 3.2%, the ratio of total debt to total assets is 40.4%, and the ratio of net debt to EBITDA has a negative value of The company s marginality has been maintained thanks to consistently high demand for GM vehicles, for which there are high mark-ups (crossovers and SUVs). The share price also got a boost from GM s successes in Asia, particularly China, where the growth in sales surpassed the industry s average value. Expectations that GM could have driverless vehicles on the road as soon as 2019 has also had a positive influence on the company s share price. Moreover, there are prototypes already being tested on the roads of California and Arizona. The plan to start mass producing driverless cars was preceded by GM s successful purchase of Cruise Automation; a company specialising in the development of autonomous vehicles. GM s growth in share price has also been helped along by the US tax reforms introduced by Donald Trump as well as his assurances that he would provide support to the American automotive industry by revising current legislation that is hindering its development (the US s tough fuel-efficiency standards, for example).

5 22% 17% 11% 6% 20.3% Asset yield per 21.8% 8.5% 9.6% Product yield per * Investment period: from 21/02/2017 to 29/12/2017. Capital protection: 95%. Norfolk Southern Corporation is involved in the railway haulage of raw materials, incomplete products and retail goods. It operates primarily in the South-East, East and Midwest of the US, providing its services across a total of 22 states. The cumulative length of rail track on which they operate is more than 32,000 kilometres. Revenue distribution by sector for which transportation services are provided - coal: 15%, agriculture: 15%, metals and building materials: 13%, paper: 8%, chemicals: 17%, auto industry: 1, multimodal transport: 22%. The company s improved financial performance has boosted its share price. In the 1st, 2nd, and 3rd quarters of 2017, Norfolk Southern s revenue grew by 6.4%, 7.5%, and 5.8% respectively (year-on-year), while their profits increased by 10.8%, 22., and 9.3% respectively (year-on-year). The company s successful implementation of its program to increase productivity; previously proposed to the company s management, has improved the business marginality. During the period from the 3rd quarter of 2016 to the 3rd quarter of 2017, Norfolk s return on equity increased from 13.1% to 14.7%, their return on assets grew from 4.7% to 5.3%, their return on invested capital went up from 8.5% to 9.3%, and the ratio of net profit to revenue rose from 17.3% to 17.9%. The company now has a higher level of financial stability. At the end of 2016, their ratio of debt to total assets stood at 29.3%. By the 3rd quarter of 2017, this value had dropped to 28.1% (over the same period, the company s ratio of total debt to EBITDA dropped from 2.49 to 2.25, while the ratio of net debt to EBITDA fell from 2.26 to 2.09). Growth in the share price was also facilitated by market expectations that Donald Trump s proposed programs would be implemented, including plans to subsidise the US coal industry and to increase US domestic oil production, which would boost the haulage industry in these specific areas, and, consequently, Norfolk Southern s revenue. Donald Trump s proposals also include increased government spending on infrastructure (including the construction and modernisation of railways), which should facilitate the future growth of Norfolk Southern s share price.

6 28% 21% 14% 7% 21.1% Asset yield per % 27.4% Product yield per * Investment period: from 25/04/2017 to 29/12/2017. Capital protection: 95%. This company specialises in issuing credit and debit cards (their own Discover Card), electronic payments (they run the Discover Network, PULSE, and Diners Club International payment systems), consumer loans, savings accounts, and certificates of deposit. The company was founded in 1986 and has since become one of the largest credit card companies in the US. The company s share price has grown thanks to the successful implementation of a strategy focused on educational and mortgage loans. This led to a year-on-year increase in revenue of 5.2%, 9.2%, and 9.7% in the 1st, 2nd, and 3rd quarters of 2017 respectively. Moreover, their credit portfolio continued to grow, posting a year-on-year increase of 9% in the 3rd quarter of 2017, including a 9% increase in credit card loans, 2% in student loans, and 18% in personal loans. Discover also got a boost in revenue from its partnership with PayPal, in which PayPal clients with Discover cards were given the opportunity to make online payments using their Cashback Bonus. The company has managed to maintain a high level of marginality; its ratio of net profit to net revenue in the 1st, 2nd, and 3rd quarters of 2017 averaged 22.6% (without dropping below 22%). In the 1st, 2nd, and 3rd quarters of 2017, the company s return on equity came to 21.7%, 21., and 20.8% respectively, with a return of assets over the same period amounting to 2.6, 2.55%, and 2.42% respectively. Risks to financial stability have reduced slightly. The ratio of debt to total assets at the end of 2016 was 27.6% and this value dropped to 27.4% by the end the 3rd quarter in 2017 (over the same period, the ratio of net debt to EBITDA fell from 2.50 to 2.46).

7 5 38% 25% 13% 14.2% Asset yield per 48.8% 5.3% 47.1% Product yield per * Investment period: from 31/05/2017 to 29/12/2017. Capital protection: 92%. Royal Caribbean Cruises is the second biggest cruise operator in the world in terms of size. The company has its own fleet of around 40 cruise liners and has several brands specialising in the elite sector («Premium» and «Luxury» classes) of the cruise holiday industry as well as in the economy sector. The company s 3 key brands (Royal Caribbean, Celebrity Cruises and Pullmantur Cruises) serve around 4 million passengers every year. The company was founded in Its revenue distribution can be broken down as follows: 74% of the company s revenue comes from ticket sales, while the remaining 26% comes from ancillary services (on-board restaurants, internet etc.). Despite being forced to cancel a significant number of cruises in 2017 due to hurricanes, the company still managed to improve their financial performance. Year-on-year growth in revenue amounted to 4.7%, 4.3%, and 0.2% in the 1st, 2nd, and 3rd quarters of 2017 respectively, while over the same period, the company s year-on-year profit amounted to 90.2%, 57.1%, and 9. respectively. The business marginality has also increased, rising from 26.9% to 29.3% between the 3rd quarter of 2016 and the 3rd quarter of Over the same period, the company s return on equity went up from 14.4% to 16.6% and their return on assets rose from 5.7% to 7.2%. Royal Caribbean s financial stability has also improved; from the 3rd quarter of 2016 to the 3rd quarter of 2017, the company s ratio of total debt to total assets fell from 43.3% to 34.4%, the ratio of total debt to EBITDA dropped from 4.22 to 2.84, and the ratio of net debt to EBITDA fell from 4.15 to The company s improved financial performance was achieved by increasing cruise ticket prices as well as by successfully implementing a program to stimulate an increase in passenger spending. This included offering special package deals and promotional offers for on-boards drinks, onboard entertainment (games), new pricing policies and management strategies for on-board restaurants, and changes to the terms of use for on-board telecommunications services (internet etc.). Share prices were also given a boost by expectations that the company will continue implementing its development strategy in Asia, where demand for cruise tourism is growing rapidly.

8 Asset yield per 145.7% 32.9% 35.6% Product yield per * Investment period: from 01/11/2017 to 29/12/2017. Capital protection: 95%. Best Buy is a major US retailer that sells consumer electronics, home office supplies, video games, household appliances, and accompanying services throughout their stores and on their website. The company has around 1,600 retail outlets in North America alone. Most of Best Buy s revenue is generated in the USA. Despite natural disasters recently affecting South Texas, Florida, Puerto Rico and elsewhere, the company has managed to improve its financial performance. In the 1st, 2nd, and 3rd quarters of 2017, revenue grew by 1., 4.8%, and 4.2% respectively (year-on-year), while profits grew by 32.8%, 13.7%, and 19.7% (year-on-year) respectively over the same period. The business marginality has also increased; during the period from the 3rd quarter of 2016 to the 3rd quarter of 2017, the company s ratio of net profit to revenue grew from 2.2% to 2.5%, their return on equity grew from 24.7% to 29.6%, and their return on assets rose from 7.4% to 8.5%. The company s financial stability has also improved; during the period from the 3rd quarter of 2016 to the 3rd quarter of 2017, the ratio of total debt to total assets fell from 9.4 to 8.99%, the ratio of total debt to EBITDA dropped from 0.57 to 0.53, and the ratio of net debt to EBITDA fell from to The growth in revenue is attributable to increased sales in Canada and Mexico, as well as the fact that the US dollar declined against other major currencies in 2017, meaning that in any case, had all other factors remained the same, the company would have seen increased sales revenue in dollar terms for its products sold in foreign currencies to consumers outside the US. Additionally, on the whole, Best Buy s average bill per customer went up in Growth in the company s share price has also been facilitated by the company s continued implementation of a strategy to develop new innovative products and bring them to market, particularly: Smart Home and In-Home Advisor products developed in collaboration with Vivint that provide various solutions for home automation and security. The company is aiming to become the top provider of smart-home technology. Assured Living (home monitoring system) allows customers to monitor their homes remotely and keep an eye on family members to ensure that they re ok.

9 WE THANK YOU FOR YOUR ATTENTION AND WISH YOU SUCCESSFUL INVESTMENTS IN THE NEW YEAR! We ll be happy to answer any questions you may have. Just get in touch with one of our company specialists using the details below: