This blog is late because of too many conference calls, but at least most of the news was good. My round-the-world summary in Monday was mostly gloomy. The problems of at least two of our shares turn out to be related to poor handling of news by their executives. While US company brass get early experience in massaging news, this is not instinctive among foreign companies with American Depositary Receipts listed in this country. 

Bad IR Opportunities

*Paddy Power Indeed! PDYPF upped its full-year foecast and the stock hit a new 2014 high in Dublin trading, at euros 62, with huge volumes changing hands.

Full-year profit now is expect to rise by a mid-to-high teens percentage, vs its August forecast of a mid-teens percentage. Sales are up, and the house losing bets are down, CEO Patrick Kennedy explained. He also said that total revenues were up 38% of which on-line sales had risen 42% in H2, both over H2 2013 to Nov. 16. At bookie shops in Britain and Ireland, the older business, sales rose a surprising14%, mainly because customers are addicted to placing bets.

Paddy no longer has any debt and euros 206 mn of its own cash despite its buyback program which began last summer under which it bought 450,000 shares for euros 23.3 mn. Paddy trades at a p/e ratio of 12.4X its latest estimate for the current year and, taking an average, its growth is 17.5%.

In its newest market, Australia, it boosted its customer numbers by 23% and its active ones by 37%.

Its mobile phone revenues at eGaming and B2B rose 19% again thanks to active customers growth, here up a third.

In Italy, another new market, from a low base revenues grew 72%.

Along with other British bookies, Paddy is promoting responsible gambling in an effort to head off too much regulation, with ads on how to bet wisely and restrictions on the wildest ads on TV sports channels. The ADR price has not moved as there were no trades here since one at $72 a month ago, but the bid is now $76.70 and the ask $80.

Daniel Stewart‘s bookies analyst, Sophie Blandford, set a euros 69 target price for the share. The broker expects Paddy’s sales will hit euros 842 mn this year and earnings euros 2.96/sh. It yields 2.7%. Its p/e ratio is just under 20. Blandford says to buy.

The news was presented in a low-key Euroland way despite the Irish bookie’s excellent publicity machine aimed at gamblers. More on this reticence follows.

*The two companies which blew their IR efforts are Allianz over the departure of Bill Gross from its Pimco sub. The stock drop gave us a chance to buy AZSEY on the cheap. We are up about 2.8% thanks to the failure of the German insurance company to react to his exit after hours on a Friday. Weekends are too important to European IR. Down withWochenendsvergnuegung!

*The other more flagrant failure was by Abengoa, a Spanish “green” energy construction firm, also on a Friday. Its failure to explain its non-recourse bonds to the market led to a monster selloff which we profited from by loading up with stock. It rose by another third (33.83% yesterday) to over $15. This share yields over 5% at present price levels, but at our buy price last Friday of barely $9 we will be richly rewarded. I got some more fan mail from subscribers; I only wish these Euro-stumbles occurred more frequently.

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