By Jeff Sanford
Toronto, Ontario -- September 18, 2017 -- This week's Tuesday Ticker looks at how the global stock markets have hit new record highs, Uni-Select expands globally, AkzoNobel opens the world’s most sustainable paint factory, and much, much more!
Stock markets continue to hit record highs. Last week the Dow Jones Industrial Average, the MSCI All Country World Index and the S&P 500 all hit new highs. Recently, market watchers had been worried that Donald Trump’s inability to get anything done in the White House would drag down market expectations. But over the last week there seems to be a new hope that Trump is finally getting disciplined and serious about his job. A new chief of staff in the White House and the axing of some of the early Trump appointees is fueling the new optimism. His new willingness to work with the Democrats also holds out the promise that the White House will be able to get some work done.
That said, there are still many analysts who continue to warn that stock market indexes are at unsustainable highs. The pessimists point out that sales across the economy are stagnating. Consumers are tapped out and in debt, and that may create an upcoming downturn in corporate earnings. Another analyst suggested current stock market levels are reminiscent of the dot-com boom of the late 1990s, when stock valuations ran far ahead of what could be justified by actual earnings and profits. It will be interesting to see what the general trend in earnings will be in the next round of earnings announcements. The answer may determine whether stocks stay at current levels or sell-off to more reasonable valuations.
Quebec-based Uni-Select continues to expand globally. The company recently announced it had acquired UK company The Parts Alliance. The subsidiary has just made an acquisition of its own, buying up all the outstanding shares of Blackburn Brakes Holding Limited. Blackburn owns BBC Superfactors, which delivers parts in the Lancashire area of the UK. According to a press release, the company makes 1,000 deliveries per day in its market area, with 97 percent of orders delivered within one hour. Henry Buckley, President and CEO of Uni-Select, was quoted in a press release as saying, "This acquisition strengthens our position in the UK market and underlines The Part Alliance's capability of driving growth both organically and through acquisitions.”
PPG recently had its "buy" rating restated by investment analysts at Robert W. Baird in a research report. The brokerage has a $115.00 price target on the company, which would represent an 8 percent gain from the current price.
AkzoNobel just opened what it says will be the world's most sustainable paint factory in Ashington, UK. The new plant will cut emissions of volatile organic compounds (VOCs) by recycling all its water and 90 percent of the solvents used to make paints, according to a report by Chemistry World on the opening. The production line will not have any open vats. Extraction points on the production line mean VOCs are fully contained and can be recovered and scrubbed. Any solvents that can be reused, are.
In the report, Tom Botwell of the British Coatings Federation is quoted as saying, “The federation tracks key environmental performance indicators (KPIs) at manufacturing sites across the UK -- which demonstrate that in the past 20 years, energy consumption per tonne of product has almost halved; water use is down by 50 percent; and plants now recycle 70 percent of waste.”
The new AkzoNobel plant will rely on solar panels and, “... a biomass boiler that burns wood pellets from managed forests in the UK.” Even the lighting and employee showers are low-energy.
“AkzoNobel expects that each litre of paint produced will have a carbon footprint half that of products made at the replaced plants,” according to the report. The plant was also built in a basin so that, “... there can be no spillages into the outside environment. Surface water can be held in an underground reservoir, so that in an emergency there would be no soil or groundwater contamination from the plant.”
The opening provides a bit of good news as AkzoNobel is just coming out of a disruptive takeover battle that strained relations with shareholders. The new CEO of AkzoNobel, Thierry Vanlancker, was quoted as saying that the new plant be considered a "statement that AkzoNobel is pretty confident about its future.”
Axalta has announced it will host the 2017 Axalta CSR Summit: The Chemistry of Partnership on Friday, September 22, 2017. The 2017 CSR Summit will take place in Philadelphia. CSR is an acronym for corporate social responsibility. The event will bring together business leaders from around the Philadelphia area to discuss how businesses can positively impact their community through, among other things, environmental sustainability practices and science, technology, engineering, and mathematics (STEM) education.
Related Market Notes
- The Bank for International Settlements (basically a global central bank for the world’s national central banks) lumped Canada in with China and Hong Kong when it recently called out countries that are carrying worrying levels of debt. According to the bank, the credit gap indicator (a measure of debt-to-GDP) is at high levels for many countries. According to a quote from the bank contained in a press release, "Credit-to-GDP ratios remained well above trend levels for a number of jurisdictions, including Canada, China and Hong Kong SAR … In most cases, these large gaps coincided with property price gaps above critical thresholds."
- The shares of Nvidia Corp can’t seem to rise high enough, fast enough. Shares in the chip maker were trading at just $23.3 in 2015. Way back then, the company was making graphic chips for video games. The company has since shifted its focus to artificial intelligence and chips designed for the automotive market, where there is new demand for digital products as cars are loaded with ever more devices like LiDAR, sensors and cameras.
As investors have noted the boom in automated vehicles, the shares of Nvidia have caught fire. Shares in the chip maker were recently trading around $190. Even so, at least four brokerages have recently released reports predicting shares in the company to break the $200 mark. A Bank of America Merrill Lynch analyst has Nvidia as a "top pick", suggesting that, "... (Nvidia's) underappreciated transformation from a traditional PC graphics vendor, into a supplier into high-end gaming, enterprise graphics, cloud, accelerated computing and automotive markets," will drive appreciation of its share price.