Footonomics Footonomics Footonomics

Footonomics by Jakobsen & Garnry #4

Equities 5 minutes to read
PG
Peter Garnry

Head of Equity Strategy

Summary:  Today's Footonomics is about Spain vs Sweden and the country of tapas wins by a small edge on macro figures and football statistics/quotes and a win on equities with Inditex beating Sweden's industrial giant Atlas Copco. Steen's and Peter's prediction is that Spain will win an entertainment match by 2-1 with the home advantage in Sevilla being a major tailwind.


Match: Spain vs Sweden

Macro: La Furia Roja vs. Blågult

  • Sweden takes a massive win on Misery Index (CPI + Unemployment + Budget deficit) with 13.1 score vs. Spain's 26.7, pretty miserable in Spain!

  • Spain is ranked 15th in GDP on PPP basis vs. Sweden at 40th – big Spain win.

  • Sweden's Anders Frisk has most refereed matches: 8  (1994-2004) and Zlatan Ibrahimovic has most tournaments with at least two goals. 3 times for Zlatan.

  • Spain win in most Championships,3, and longest gap between winning 44 years.

  • Clean Spain win although Zlatan, of course, will claim his record more important.

  • Best football quotes: Sweden: Zlatan: TV4 reporter: “Who will win the qualifier? Zlatan: “Only God knows”. Reporter: “Its kind of hard to ask him”. Zlatan: “You are talking to him”….Spain: Xavi: “Most players I came across were quicker and stronger than me. Decision making is what controls our physical actions. Some have mental speed of 80 while others are capable of reaching 200, I always tried for 200”. Well, its not hard is it, as much as we love Xavi, there is only one Zlatan, God or not: Sweden wins.

  • Macro is a draw, but small edge for Spain based on size and history. Sorry Zlatan.

Equities: Inditex vs Atlas Copco

  • Inditex, the parent company of the Zara fashion retailer, wins narrowly 2-1 over Atlas Copco, Sweden’s largest industrial company, as Inditex is cheaper on valuation (24.4 vs 29.4 on 24-month forward P/E ratio) and has a higher expected growth rate (7.1% vs 5.8%). Atlas Copco is a well-run company with a return on equity of 26% easily beating Inditex at 13.7% which has been suffering during the pandemic as the company has underinvested in its e-commerce channels for years.
  • Inditex saw during the pandemic how important it is to have a larger footprint in e-commerce despite fashion traditionally being a physical experience. Convenience beats experience in many industries. The latest quarterly result from Inditex shows that the reopening is having a positive impact on the business but the e-commerce business remains an open wound.

  • Atlas Copco is strong industrial company that managed well during the pandemic with the 12-month trailing revenue back above SEK 100bn demonstrating an impressive 20% free cash flow generation on that those revenue. The company’s strongest IP and assets remain in its Compressor Technique segment.
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.