Footonomics by Jakobsen & Garnry #3

Equities 5 minutes to read
Peter Garnry

Head of Equity Strategy

Summary:  Today's Footonomics is about England vs Croatia that is tough match in football, but an easy win for England in the world of equities with Unilever winning 3-0 over INI Industrija Nafte on superior fundamentals. On the macro and football quotes it is a draw with surprisingly Croatia beating England on the Misery Index - well done Croatia! Steen's and Peter's prediction is that the match will be an entertaining one finishing 3-3.


Match: England vs Croatia

Macro: Le Roast Beef vs. Our Beautiful (Liepa nasa)

  • Croatia takes the win on the Misery Index (CPI + Unemployment + Budget deficit) with a 13.9 score vs. 16.9 for England. (Higher number is worse)

  • England is ranked 10th in GDP globally vs. Croatias 80th place. England win.

  • Croatia has most appearances in the finals without ever finishing in the top four: 5 times, but even worse England: Most appearances in the finals without ever finishing in the top 2: 9 times! Major win for Croatia.

  • Best football quotes: England: Gary Linker: Football is a simple game. 22 men chasing a ball for 90 minutes and at the end, the German always win.Croatia represented by Luka Modric: “Fight for your dreams and success. This is what has always guided me. Linkers is iconic, sorry Modric (you got some amazing good advice though!). England Win.

Equities: Unilever vs INA Industrija Nafte

  • Unilever, one of the world’s largest consumer goods companies, wins 3-0 over INA Industrija Nafte, Croatia’s largest oil company, as Unilever is cheaper on valuation (18.5 vs 35.6 on 24-month forward P/E ratio), has a better return on equity (45.8% vs 1.8%), and has a higher expected growth rate (6.5% vs 1.1%). Unilever is an extremely well-run company and difficult for Balkan oil company to beat.

  • Unilever has since 2017 been diversifying away from non-core businesses to enhance operating margins and cash flow generation. The world’s largest soap maker is a well-diversified company that has the pricing power to pass on any inflationary pressures to consumers.

  • INA Industrija Nafte had some great growth years before the pandemic but lost 35% of its revenue in 2020 and plunged into losses. With Balkan economies opening up again the business outlook has improved; however, the oil company looks quite entrenched in the old integrated oil and gas business.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Bank (Schweiz) AG
Beethovenstrasse 33
CH-8002
Zürich
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed here or within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.