WPP: Lap Of Honour?

It is good to see WPP shares up nearly 10% so far this morning, and Sir Martin Sorrell getting a bit richer again…

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This is especially the case after the stock was highlighted here on Zakmir.com with accompanying deductive reasoning as to what should happen next in terms of the newsflow regarding the company.

This was not only correct, it was timely, and useful from the perspective of both traders and investors – something which is rarely seen in the mainstream financial media. It is clearly also the reason I am not published in the mainstream financial media, I refer you to Owen Jones’s “Closed Shop” article from last week.

Disclaimer

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is  recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.

 

 

Imperial Brands: A Dog Waiting For Its Day

The chart of Imperial Brands is somewhat reminiscent of the slow, sliding pattern seen on the Shire chart before it was “saved” by Takeda, The main difference here is that rather than £30 being the bargain basement zone, we have £25. The other big technical point to note is that on the retest of the lows this month there was a bear trap rebound accompanied by very sharp bullish divergence, kind of the price action equivalent of a handbrake turn.

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The lasting floor idea is backed by the way that over the past couple of sessions there has been a sharp rise in volume on the buy side. While it has to be admitted that this stock is fundamentally out of favour, and has been a dog for years, there may be at least an intermediate rebound worth talking about. The area between 2,800p and the 200 day line is favoured over the next month. Ideally, there is no break back below the March support line at 2,400p in the interim. One is too jaded to mention M&A after so many false dawns. Instead, it would be nice just to not have to talk about the stock anymore!

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Smith & Nephew: No Laughing Matter

It was interesting that earlier in the week shares of S&N rallied, but later fell as a Tweet allegding advanced interest from Stryker was effectively laughed at in the financial media.

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The point to remember here is that in the world of M&A you really can never rule anything in or out, however ridiculous. For instance, one would presume only a fool would want to pay more for Sky than Fox (Rupert Murdoch should know what it is worth). But this week Comcast stepped forward.

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In the case of S&N the strategic logic was and is that it should be underpinned by Activist Investors, and this could mean that anyone previously interest in the group might suffer some FOMO. We shall see.

What was actually the most appealing aspect in the past week, apart from the Tweet, was the way the stock melted through its 200 day moving average (like a blowtorch through butter), via not one but two as yet unfilled gaps. Unless a bucket of very cold water is poured over this situation, it is difficult not to be optimistic.

Disclaimer
Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.

WPP: Activist Investors Trigger A Breakup Battle

There is nothing that Private Equity likes more than an asset stripping breakup situation, especially a distressed one such as we are seeing at WPP in the wake of the Sir Martin Sorrell resignation / retirement.

They have been joined by activist investors looking for a breakup of the advertising giant, something which would almost certainly have been called for even if Sir Martin had not fallen on his sword. What one would expect to see here over coming days and weeks is pressure for the kind of corporate rejig recently seen at Whitbread.

Our understanding is that activist investors have been sounding out key shareholders, presumably not our Martin, in order to garner support for a breakup of the company to extract shareholder value. Queen of Media, Lorna Tilbian echoed the idea of a breakup earlier this week on the price ticker wallpaper channel, CNBC.