Covering the Mexican Economy, Actinver Research

Actinver

Covering the Mexican Economy

Actinver Research

Actinver is a mexican leading financial group, that generates well being for individuals and companies through advisory services that provides investment management to maintain and grow their wealth.

Equity Bottom-Up

Fomento Economico Mexica-Ubd / Equity Bottom-Up

<ul><li>Sales grew 8.3% YoY to P$196.8bn, slightly (0.9%) above our estimates, with Proximity Americas and Fuel sales below our estimates, while other segments outperformed and posted a better sales trend.</li><li>While FX tailwinds supported growth, Proximity Americas posted a lackluster flattish SSS performance, with growth in average ticket offset by a contraction in average traffic amid adverse weather in Mexico and a tough comp base.</li><li>Unit growth was better than expected with 328 net additions during the quarter, yet segment sales still grew below our estimates at 4.8% YoY.</li></ul>

Sales grew 8.3% YoY to P$196.8bn, slightly (0.9%) above our estimates, with Proximity Americas and Fuel sales below our estimates, while other segments outperformed and posted a better sales trend.While FX tailwinds supported growth, Proximity Americas posted a lackluster flattish SSS performance, with growth in average ticket offset by a contraction in average traffic amid adverse weather in Mexico and a tough comp base.Unit growth was better than expected with 328 net additions during the quarter, yet segment sales still grew below our estimates at 4.8% YoY.

Duplicate of Actinver Research - FEMSA 3Q24: Mixed results amid margin expansion but sluggish OXXO SSS (Quick View)

Macroeconomics

<ul>
<li>Having recently launched our Food &amp; Bev coverage (link to report here), we reiterate our Outperform ratings in beverage companies AC (PT down to P$205 from P$210), KOF (P$197 PT), FEMSA (PT up to P$230 from P$222), and Becle (PT down to P$33 from P$36).</li>
<li>We see Coke bottlers as better positioned amid a competitive environment and a picky consumer, while we forecast improving trends in FEMSA and Becle.</li>
<li>We are more cautious on Bimbo (Market Perform) and Gruma (Market Perform), given harsh competition in their main markets and a more limited price/volume growth potential, in our view.</li>
</ul>


Having recently launched our Food &amp; Bev coverage (link to report here), we reiterate our Outperform ratings in beverage companies AC (PT down to P$205 from P$210), KOF (P$197 PT), FEMSA (PT up to P$230 from P$222), and Becle (PT down to P$33 from P$36).
We see Coke bottlers as better positioned amid a competitive environment and a picky consumer, while we forecast improving trends in FEMSA and Becle.
We are more cautious on Bimbo (Market Perform) and Gruma (Market Perform), given harsh competition in their main markets and a more limited price/volume growth potential, in our view.


Actinver Research - Consumer post 3Q24: Sales deceleration while trying to protect margins

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI Emerging Markets / Technical Analysis

<ul>
<li>In our prior EM Strategy (October 2) we discussed that as long as EEM-US is above our important line-in-the-sand at $37, we were buyers on the pullback.</li>
<li>This support level held and EEM-US now displays a bullish 3-month downtrend reversal as the DXY appears to be breaking below $105.70, all bullish signals signaling additional upside-- buy.</li>
<li>We are bullish as long as $36.50-$37 support holds on EEM-US. Our first target is $42, which is 1.5+ year resistance. Remain overweight India, and we're upgrading Poland/Greece to overweight</li>
</ul>


In our prior EM Strategy (October 2) we discussed that as long as EEM-US is above our important line-in-the-sand at $37, we were buyers on the pullback.
This support level held and EEM-US now displays a bullish 3-month downtrend reversal as the DXY appears to be breaking below $105.70, all bullish signals signaling additional upside-- buy.
We are bullish as long as $36.50-$37 support holds on EEM-US. Our first target is $42, which is 1.5+ year resistance. Remain overweight India, and we're upgrading Poland/Greece to overweight


MSCI EM Index Reversing 3-Month Downtrend -- Buy. Remain Overweight India, Upgrading Poland & Greece

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).</li>
<li>On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.</li>
<li>MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.</li>
</ul>


The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).
On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.
MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.


Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

<ul>
<li>In our prior EM Strategy (August 7, 2023) we discussed how MSCI EM (EEM-US) was near major 1+ year resistance at $42.</li>
<li>After being unable to break out, EEM-US consolidation has continued, and is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023.</li>
<li>As long as EEM-US is above $37, we are buyers on this pullback.</li>
</ul>


In our prior EM Strategy (August 7, 2023) we discussed how MSCI EM (EEM-US) was near major 1+ year resistance at $42.
After being unable to break out, EEM-US consolidation has continued, and is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023.
As long as EEM-US is above $37, we are buyers on this pullback.


MSCI EM Index Approaching 10.5-Month Support; Remain Overweight India; Many EM Buys

Mexico

Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA) is a Company that through its subsidiaries produces, distributes and markets non-alcoholic beverages throughout Latin America as part of the Coca-Cola system. The Company owns and operates convenience stores in Mexico and Colombia and holds a stake in Heineken.

Fomento Economico Mexica-Ubd (FEMSAUBD MM)

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Fomento Economico Mexica-Ubd (FEMSAUBD MM)

Duplicate of Actinver Research - FEMSA 3Q24: Mixed results amid margin expansion but sluggish OXXO SSS (Quick View)

Sales grew 8.3% YoY to P$196.8bn, slightly (0.9%) above our estimates, with Proximity Americas and Fuel sales below our estimates, while other...

Actinver

Actinver Research - Consumer post 3Q24: Sales deceleration while trying to protect margins

Having recently launched our Food & Bev coverage (link to report here), we reiterate our Outperform ratings in beverage companies AC (PT down to...

Actinver

MSCI EM Index Reversing 3-Month Downtrend -- Buy. Remain Overweight India, Upgrading Poland & Greece

In our prior EM Strategy (10/2/23) we discussed that, if $EEM is above $37, we were buyers on the pullback. Support held and now EEM displays a...

Vermilion Research

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

MSCI EM Index Approaching 10.5-Month Support; Remain Overweight India; Many EM Buys

$EEM is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023. As long as $EEM is...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Duplicate of Actinver Research - FEMSA 3Q24: Mixed results amid margin expansion but sluggish OXXO SSS (Quick View)

Sales grew 8.3% YoY to P$196.8bn, slightly (0.9%) above our estimates, with Proximity Americas and Fuel sales below our estimates, while other...

Actinver

Actinver Research - Consumer post 3Q24: Sales deceleration while trying to protect margins

Having recently launched our Food & Bev coverage (link to report here), we reiterate our Outperform ratings in beverage companies AC (PT down to...

Actinver

MSCI EM Index Reversing 3-Month Downtrend -- Buy. Remain Overweight India, Upgrading Poland & Greece

In our prior EM Strategy (10/2/23) we discussed that, if $EEM is above $37, we were buyers on the pullback. Support held and now EEM displays a...

Vermilion Research

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

​The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

MSCI EM Index Approaching 10.5-Month Support; Remain Overweight India; Many EM Buys

$EEM is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023. As long as $EEM is...

Vermilion Research

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...