Before the bell: buy quality

Retailers and packaging producers are looking back on a successful Christmas period, while chip stocks give back part of the gains they booked earlier this year.

On Wall Street, the S&P 500 ended yesterday unchanged, while the Nasdaq slipped 0.4%. Wholesale giant Costco was rewarded for an excellent year-end period with a strong share price rise. During the session, the stock climbed as much as 5.6%, before closing with a gain of 3.7%. On the European continent, shares of large companies lost an average of 0.3%. There were welcome exceptions. In London, defence group BAE Systems rose 5%, in Paris BNP Paribas jumped 3.5%, and in Frankfurt Bayer gained 3%. In the Netherlands, however, chip stocks gave back part of the strong gains they had built up since the start of the year. ASMI (-6.9%), BE Semiconductor Industries (-4.9%) and ASML (-3.7%) all retreated. The share price of British supermarket chain Tesco fell a surprising 6.7%, despite solid Christmas sales.

In Hong Kong, the Hang Seng index is trading at the same level as yesterday’s close. Alibaba gains 2.6%, while Baidu gives up 2.4%. In Tokyo, the Topix rises 0.8% and the Nikkei is up as much as 1.5%. Fast Retailing (Uniqlo) jumps an impressive 10.1% after the fashion group published excellent results. Mazda (+4%) and Honda (+3.2%) also shift up a gear, while supermarket chain Aeon drops 7.1% after disappointing figures. Germany publishes industrial production data this morning. We will also get figures on retail sales in the eurozone, while in the US data on consumer confidence and employment are due later today.

If you feel the urge, you should buy

Sometimes you come across a company that is running so well that it almost cannot help but perform strongly. Take Costco. Customers pay a fixed fee, a membership, and in return get to fill their shopping carts very cheaply. That is how a bank should be organised. Far more trackers would be sold, and far fewer expensive funds. Unfortunately, we are not there yet. In the automotive sector, there is also a striking example. AUTO1, the German specialist in second-hand cars, both on the buying side (wijkopenautos.be) and the selling side (Autohero), shows how it can and should be done. As you know, I sold my old Skoda there at a fair price. Today, the front page of De Tijd features a headline – next to a photo of the rector of Ghent – stating that far more private individuals than before are buying and selling second-hand cars. That makes it itch. How I would like to own shares of AUTO1. But they have already risen sharply and are also expensive. Quality is allowed to be expensive, because over time prices are likely to rise further. And as profits grow along with them, the share becomes cheaper even as its price goes up. When in doubt, buy half of what you want to buy. That way, if there is a pullback later on, you can add more.

Holle Bolle Gijs

While the office buildings at Smurfit Westrock’s site in Turnhout had to be evacuated because the structure appeared to be buckling under the weight of recent snowfall, shares of the Irish packaging giant rose 6.7%. The company was previously known as Smurfit Kappa and merged with the American group Westrock in 2024. The more we order online from e-commerce retailers, the more cardboard packaging rolls off the production lines at packaging giants such as Smurfit Westrock. The parcel season is therefore peak season for these companies. Other American competitors such as Graphic Packaging (+4.9%), Packaging Corp of America (+3.4%) and International Paper (+6.4%), which acquired the UK’s DS Smith a year ago, also saw their share prices rise yesterday.

Did you know…

that Swedish paper company Svenska Cellulosa is the largest private owner of forest land in Europe? The group owns 2.7 million hectares of forest in Sweden and the Baltic states, an area almost as large as Belgium.

This article was translated from Dutch and was originally published on Spaarvarkens.be.