{"id":10515,"date":"2014-08-10T13:11:17","date_gmt":"2014-08-10T17:11:17","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=10515"},"modified":"2014-08-10T13:11:17","modified_gmt":"2014-08-10T17:11:17","slug":"highlights-of-the-week-of-august-4-2014","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/highlights-of-the-week-of-august-4-2014\/","title":{"rendered":"Highlights of the week of August 4, 2014"},"content":{"rendered":"<p style=\"color: #2c2c29;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/earnings-report-300x2631.gif\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-10539\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/earnings-report-300x2631.gif\" alt=\"earnings-report-300x263[1]\" width=\"225\" height=\"197\" \/><\/a><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/WeekInReview.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-10538\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/WeekInReview.jpg\" alt=\"WeekInReview\" width=\"275\" height=\"103\" \/><\/a><\/p>\n<p style=\"color: #2c2c29;\">Dear\u00a0<strong>PGM Capital\u00a0<\/strong>Blog readers,<\/p>\n<p style=\"color: #2c2c29;\">In this weekend&#8217;s blog edition, we want to discuss some of the most important events that happened in the global capital markets, the world economy and the world of money in the week of August 4, 2014.<\/p>\n<ul style=\"color: #2c2c29;\">\n<li>Q2-2014 earnings report of Archer Daniel Midland Company.<\/li>\n<li>Nestle announced CHF 8 billion share buy-back program.<\/li>\n<li>Rio Tinto reports H1-2014 earnings report.<\/li>\n<\/ul>\n<p><span style=\"color: #0000ff;\"><strong>ARCHER DANIELS MIDLAND Q2-2014 UP 67.4 PERCENT:<br \/>\n<\/strong><\/span><b style=\"color: #252525;\">Archer Daniels Midland Company<\/b><span style=\"color: #252525;\">\u00a0(NYSE: ADM)<\/span><span style=\"color: #252525;\">\u00a0is an American global\u00a0<\/span>food-processing<span style=\"color: #252525;\">\u00a0and\u00a0<\/span>commodities-trading<span style=\"color: #252525;\">\u00a0corporation, headquartered in Decatur, Illinois, USA.<\/span><span style=\"color: #252525;\">\u00a0<\/span><\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/archer-daniels-midland-company-logo.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10546\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/archer-daniels-midland-company-logo.jpg\" alt=\"archer-daniels-midland-company-logo\" width=\"250\" height=\"284\" \/><\/a><\/p>\n<p><span style=\"color: #252525;\">The company operates more than 270 plants and 420 crop procurement facilities worldwide, where\u00a0<\/span>cereal<span style=\"color: #252525;\">\u00a0grains and\u00a0<\/span>oilseeds<span style=\"color: #252525;\">\u00a0are processed into products used in\u00a0<\/span>food<span style=\"color: #252525;\">,\u00a0<\/span>beverage<span style=\"color: #252525;\">,\u00a0<\/span>nutraceutical<span style=\"color: #252525;\">,\u00a0<\/span>industrial<span style=\"color: #252525;\">, and\u00a0<\/span>animal<span style=\"color: #252525;\">\u00a0<\/span>feed\u00a0<span style=\"color: #252525;\">markets worldwide.<\/span><\/p>\n<p>On Wednesday, August 6th, the company reported &#8211; adjusted for certain items &#8211; a profit of\u00a0<span style=\"color: #000000;\">77 cents per share, up 67.4%, from 46 cents posted in the year-ago comparable quarter.<\/span><\/p>\n<p>Based on these blockbuster results t<span style=\"color: #000000;\">he shares of this agri-business giant surged with 4.74% in the week to close at an all time high of US$49.04 a share on Friday, August 8, 2014 as can be seen from below chart.<\/span><\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/ADM-5-day-chart.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10518\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/ADM-5-day-chart.png\" alt=\"ADM 5-day chart\" width=\"500\" height=\"209\" \/><\/a><\/p>\n<p><strong>Q2-2014 Highlights:<\/strong><\/p>\n<ul>\n<li>Adjusted EPS of US$0.77 excludes approximately US$73 million in pretax LIFO income.<\/li>\n<li>Oilseeds Processing increased US$18 million.<\/li>\n<li>Corn Processing increased US$69 million on strong ethanol demand and steady sweetener\u00a0volumes.<\/li>\n<li>Agricultural Services increased US$122 million, driven by strong U.S. exports and significantly\u00a0improved results from international merchandising.<\/li>\n<li>The net debt position\u00a0of the company declined to US$3.6 billion, compared to US$5.5 billion in the\u00a0same period last year.<\/li>\n<li>The company repurchased 7.2 million shares during the quarter, bringing year-to-date buybacks to 11.5\u00a0million shares for about US$500 million.<\/li>\n<li><span style=\"color: #000000;\">Board of Directors today declared a cash dividend of 24.0 cents per share on the company\u2019s common stock payable September 11, 2014, to Stockholders of record August 21, 2014.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #0000ff;\"><strong>NESTLE CHF 8 BILLION SHARE-BUY BACK PROGRAM:<br \/>\n<\/strong><\/span><strong><span style=\"color: #000000;\">Nestl\u00e9 S.A.<\/span><\/strong><span style=\"color: #252525;\">\u00a0(SIX: NESN) is\u00a0<\/span><span style=\"color: #252525;\">a Swiss\u00a0<\/span><span style=\"color: #000000;\">multinational<\/span><span style=\"color: #252525;\">\u00a0headquartered in\u00a0<\/span><span style=\"color: #000000;\">Vevey<\/span><span style=\"color: #252525;\">, Switzerland, is measured by revenues, the world&#8217;s largest food company.<\/span><\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Nestle-Logo.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10556\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Nestle-Logo.jpg\" alt=\"Nestle-Logo\" width=\"400\" height=\"162\" \/><\/a><\/p>\n<p><span style=\"color: #252525;\">The company&#8217;s products include\u00a0<\/span><span style=\"color: #000000;\">baby food,\u00a0bottled water,\u00a0breakfast cereals<\/span><span style=\"color: #252525;\">, coffee and tea, confectionery,\u00a0<\/span><span style=\"color: #000000;\">dairy products,\u00a0ice cream,frozen food,\u00a0pet foods<\/span><span style=\"color: #252525;\"><span style=\"color: #000000;\">,<\/span> and snacks. Twenty-nine of Nestl\u00e9\u2019s brands have annual sales of over 1 billion\u00a0<\/span><span style=\"color: #000000;\">CHF<\/span><span style=\"color: #252525;\">\u00a0(approx. 1.1 billion US-Dollars).<\/span><\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/nestleproducts.gif\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10554\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/nestleproducts.gif\" alt=\"nestleproducts\" width=\"300\" height=\"300\" \/><\/a><\/p>\n<p style=\"color: #666666;\"><span style=\"color: #000000;\">In the first half\u00a0of 2014,\u00a0the Group delivered organic growth of 4.7%, composed of 2.9% real internal growth and 1.8% in pricing. Total sales were\u00a0<acronym title=\"Swiss Francs\">CHF<\/acronym>\u00a043 billion. The strong Swiss Franc continued to have a substantial negative impact (-8.8%) and after divestitures, net of acquisitions(-0.7%), reported total sales were down by 4.8%.<\/span><\/p>\n<p style=\"color: #666666;\"><strong>H1-2014 Highlights:<\/strong><\/p>\n<ul style=\"color: #666666;\">\n<li><span style=\"color: #000000;\">The Group\u2019s\u00a0trading operating profit\u00a0was\u00a0<acronym title=\"Swiss Francs\">CHF<\/acronym>\u00a06.4 billion. The reported trading operating profit margin was 15.0% (-10 basis points), +30 basis points in constant currencies.<\/span><\/li>\n<li><span style=\"color: #000000;\">The\u00a0cost of goods sold\u00a0increased by 20 basis points, reflecting input cost pressures, especially in dairy.<\/span><\/li>\n<li><span style=\"color: #000000;\">Total marketing and administrative costs\u00a0decreased by 30 basis points, reflecting efficiencies. At the same time they continued to strengthen the support for their brands, increasing\u00a0consumer facing marketing spend\u00a0in constant currencies.<\/span><\/li>\n<li><span style=\"color: #000000;\">Net profit\u00a0was down to\u00a0<acronym title=\"Swiss Francs\">CHF<\/acronym>\u00a04.6 billion, reported\u00a0earnings per share\u00a0were\u00a0<acronym title=\"Swiss Francs\">CHF<\/acronym>\u00a01.45, both impacted by the strong Swiss Franc.\u00a0Underlying earnings per share in constant currencies\u00a0were up 3.6%.<\/span><\/li>\n<li><span style=\"color: #000000;\">Operating cash flow\u00a0was\u00a0<acronym title=\"Swiss Francs\">CHF<\/acronym>\u00a04.3 billion. Working capital remains an area of focus and they have continued to lower it as a percentage of sales.<\/span><\/li>\n<li><span style=\"color: #000000;\">They plan to launch a new share buy-back programme of\u00a0<acronym title=\"Swiss Francs\">CHF<\/acronym>\u00a08 billion that will start this year and continue into 2015. The buy-back is subject to market conditions and strategic opportunities.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #0000ff;\"><strong>RIO TINTO H1-2014, EARNINGS UP 21 PERCENT<\/strong><\/span>:<br \/>\n<strong>The Rio Tinto Group<\/strong><span style=\"color: #252525;\">\u00a0is a British-Australian\u00a0<\/span>multinational<span style=\"color: #252525;\">\u00a0metals and mining corporation with headquarters in\u00a0<\/span>London, United Kingdom<span style=\"color: #252525;\">, and a management office in\u00a0<\/span>Melbourne, Australia<span style=\"color: #252525;\">.<\/span><\/p>\n<p><span style=\"color: #252525;\">The company, which is the\u00a0<span style=\"color: #000000;\">world\u2019s second biggest mining company,\u00a0<\/span>has operations on six continents but is mainly concentrated in Australia and Canada.<\/span><\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/rio_tinto_logo_excavator.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10524 size-full\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/rio_tinto_logo_excavator.jpg\" alt=\"rio_tinto_logo_excavator\" width=\"400\" height=\"333\" \/><\/a><\/p>\n<p>On Thursday, August 7th, the company\u00a0reported its H1-2014 earnings report with the following highlights:<\/p>\n<p><strong>H1-2014 Highlights:<\/strong><\/p>\n<ul style=\"color: #646464;\">\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Increased underlying earnings by 21 percent to US$5.1 billion. Underlying earnings per share rose to 276.8 US$ cents.<\/span><\/li>\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Achieved US$3.2 billion of sustainable operating cash cost improvements since 2012, exceeding the US<\/span><span style=\"color: #000000;\">$3 billion reduction target six months ahead of schedule.<\/span><\/li>\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Shipped record iron ore volumes, set production records for iron ore and thermal coal and delivered a strong operational performance in copper.<\/span><\/li>\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Increased cash flows from operations by eight percent to US$8.7 billion.<\/span><\/li>\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Reduced capital expenditure to US$3.6 billion in the first half.\u00a0<\/span><\/li>\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Decreased net debt by US$1.9 billion in the first half to US$16.1 billion on 30 June 2014.\u00a0<\/span><\/li>\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Achieved EBITDA of US$1.1 billion in Aluminum, up 26 percent on 2013 first half, despite London Metal Exchange (LME) aluminum prices averaging nine per cent lower.<\/span><\/li>\n<li style=\"font-weight: inherit; font-style: inherit;\"><span style=\"color: #000000;\">Increased interim dividend by 15 percent to 96 US cents per share, payable on September 11, to shareholders on record on August 15, 2014<\/span><\/li>\n<\/ul>\n<p><strong style=\"color: #0000ff;\">PGM CAPITAL COMMENTS:<br \/>\n<\/strong>The above mentioned earnings report of the world&#8217;s major food producers and second biggest miners, proves the fact that the world is approaching a (food) commodity based (hyper) inflation cycle.<\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/food-inflation2.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10550\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/food-inflation2.jpg\" alt=\"food-inflation2\" width=\"300\" height=\"222\" \/><\/a><\/p>\n<p>The announced hike of their respective dividends combined with massive share-buy back programs gives un indication, that the management of those companies believe that the current price of their stocks is too low.<\/p>\n<p>Based on their fundamentals and financial conditions we have a <span style=\"color: #008000;\"><strong>BUY<\/strong><\/span> rating on the stocks of all the above mentioned companies and are expecting &#8220;Archer Daniels Midland&#8221; to announce a stock split in the coming 6- 12 months.<\/p>\n<p style=\"color: #2c2c29;\">Last but not least, before following any investing advice, always consider your investment horizon and risk tolerance and financial situation and be aware that stock prices don&#8217;t move in a straight line and that sharp corrections may happen in the short term.<\/p>\n<p style=\"color: #2c2c29;\">Until next week.<\/p>\n<p style=\"color: #2c2c29;\">Yours sincerely,<\/p>\n<p style=\"color: #2c2c29;\"><a style=\"color: #807d7a;\" href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/05\/Suriname-Times-foto.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9925 \" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/05\/Suriname-Times-foto-150x150.jpg\" alt=\"Suriname Times foto\" width=\"96\" height=\"96\" \/><\/a><\/p>\n<p style=\"color: #2c2c29;\">Eric Panneflek<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dear\u00a0PGM Capital\u00a0Blog readers, In this weekend&#8217;s blog edition, we want to discuss some of the most important events that happened in the global capital markets, the world economy and the world of money in the week of August 4, 2014. Q2-2014 earnings report of Archer Daniel Midland Company. Nestle announced CHF 8 billion share buy-back<a href=\"https:\/\/www.pgmcapital.com\/nl\/highlights-of-the-week-of-august-4-2014\/\">[&#8230;]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,23,9,10,19,12,26,27,15,40,1,18],"tags":[],"class_list":["post-10515","post","type-post","status-publish","format-standard","hentry","category-dividend-declaration","category-earnings-report","category-emerging-markets","category-eric-panneflek","category-financial-news","category-inflation","category-logistic","category-news","category-pgm-capital","category-stock-split","category-uncategorized","category-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/10515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=10515"}],"version-history":[{"count":0,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/10515\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=10515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=10515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=10515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}