Europe Stock Writeups

Salvesen (Christian). A transport and logistics group which over recent years lost its way. Refusing a takeover bid 4 years ago at 200p, the company also called off merger talks with TDG at around 60p, perhaps rightly so given TDG's pension hole. However, although margins are tight and business conditions tough, the whole sector is rationalising and with luck, will 'legally' cartelise. The client base is well spread and the valuations very good, such as the 6% plus yield. The recent trading statement was downbeat but even low-balling their own numbers, it is now a clear recovery play with the prospect of significant restructuring under the rated new CEO from Exel, a larger competitor.

Sedol	Type	Price	Date
0771276	Sell	£ 0.925	02/10/2007
0771276	Buy	£ 0.642	24/03/2006
0771276	Buy	£ 0.627	22/03/2006
0771276	Buy	£ 0.622	17/03/2006
0771276	Buy	£ 0.648	19/12/2005
0771276	Buy	£ 0.675	14/06/2005
0771276	Buy	£ 0.657	10/06/2005

Sanofi-Aventis is one of Europe's leading pharmaceutical companies, with strong cardiovascular, diabetes and vaccine franchises. In line with much of the rest of the sector, the company will face significant patent expiries in 2011-2013, but this risk is now very much in the price, and moderate growth is likely in the intervening period. The attractive dividend yield (over 4%) is very safe.

Sedol	Type	Price	Date
5671735	Buy	EUR 48.615	16 September 2008

Siemens has a reputation for excellence in engineering, and indeed from an investor's point of view, the company has for too long given the appearance of being run by engineers for engineers. There is now a new management team, and the company is undergoing its first serious restructuring since 1969. The intentions of the management appear to be a "fix and sell" of non-core divisions, and to add to the core, more profitable areas. The seriousness of these intentions has already been demonstrated by the decision to merge its telecommunications equipment division with that of Nokia, thus showing that there are no sacred cows. Management is also reining in unfocused capital expenditure, and there is 21% upside in 2007FY looking at return on equity against price to book, with free cash flow yield forecast to rise to 11% the following year.

Sedol	Type	Price	Date
5727973	Buy	EUR 67.191	13/10/2006
5727973	Buy	EUR 66.902	11/07/2006

Studsvik. This $160m market cap 50 year old Swedish company is Europe 's only independent specialist provider of equipment and services to the nuclear power industry, with a focus on the operations, maintenance and decommissioning stage of a power station's life cycle. It has leading positions in Sweden , Germany , UK , US and Japan . It is going through a restructuring/disposals process but the main reason for buying this stock is our belief that after 20 years in the doldrums much of the developed world is now realising that, like it or not, nuclear power is going to have to play an increasingly bigger role in meeting their energy requirements. Studsvik are well positioned to assist in the upgrade of existing power stations and, where necessary, the decommissioning of those plants uneconomical to maintain. The company has net cash on its balance sheet and given it is about to see significant positive earnings momentum it is cheap on just 14x forward earnings.

Sedol	Type	Price	Date
7103269	Sell	SEK  255.008	05/06/2007
7103269	Buy	SEK  262.05	12/04/2006
7103269	Buy	SEK  271.037	07/04/2006
7103269	Buy	SEK 169.57	09/09/2005

Sulzer is a diversified industrial company which produces pumps, mixing and refining equipment, surface treatments and turbines. It is benefiting from the demand for infrastructure worldwide, which has created a strong order book and high visibility of sales and earnings. The company has a healthy balance sheet with no debt.

Sedol	Type	Price	Date
4854719	Buy	CHF 127.254	19 September 2008

Swisscom is the leading Swiss telecommunications company. It benefits from strong shares of both its fixed and mobile domestic markets, where competitive pressures are fewer than within the European Union. The recent acquisition of Fastweb, the number two player in Italian broadband, offers a growth opportunity in a large and under-penetrated market. The stock boasts a high level of free cash flow generation and 4% dividend yield, which compares favourably with a Swiss long bond yield of just 3%.

Sedol	Type	Price	Date
5533976	Buy	CHF 434.304	17/09/2007

Syngenta was formed out of the merger of Novartis and Zeneca's agri-crop businesses. The new entity immediately had top three franchises in all regions and treatments. The focus has moved from cost-cutting (which remains ongoing, with US$200m in fresh cuts expected in 2006) to revenue growth. This is being achieved by focusing on key products, which contain proprietary aspects, and on geographical growth areas such as Eastern Europe. The targeted crops include rice (where China has become a net importer) and corn (where farmers require higher yields as demand grows, in line with the development of biofuels). Syngenta combines increasing market share and growing demand, with increased internal efficiency. A healthy free cash flow yield of 8.8% is forecast for 2006, and a dividend yield of over 3% should also support the stock price.

Sedol	Type	Price	Date
4356646	Buy	CHF 155.514	28/06/2006
4356646	Buy	CHF 156.728	15/06/2006