New Horizons

Accendo Markets is proud to now be offering its services to the Irish market. This naturally increases the scope of our research and analysis to cover not just UK-listed equities, but those listed on the Dublin Stock Exchange too. In some cases the stocks are dual-listed which helps. In this report, we’ve picked three stocks on account of their dual listing (UK and Ireland) and thus high liquidity.

With an Accendo trading account, you are in a position to speculate on falling as well as rising prices. This effectively doubles your opportunity to profit from market moves, since prices inevitably move down as well as up. What’s more, our trading account is a great tool for hedging a traditional physical shares portfolio against short-term adverse market conditions. Further details about the service offered by Accendo Markets can be found at the end of this report.

Three Irish stocks with fantastic trading potential right now

We’ve picked three sectors that are proving very interesting given their potential to keep moving upwards over the long term, but also offer the chance to correct lower in the shorter term. The gambling industry shows no signs of shrinking anytime soon and with plenty of potential M&A targets out there, the sector offers some fantastic growth opportunities. Paddy Power Betfair (PPB) is our pick.

Airlines have been basking in low oil prices and rising passenger numbers. In particular, budget airlines are fast wresting market share from the national flag carriers. But with fuel prices potentially set to recover given ongoing chat about a global production freeze, could airlines like Ryanair (RYA) be looking a little toppy?

Building Materials & Construction is a sector that’s been very much in focus in the UK, given all this talk of a potential Brexit. Ireland, of course, has no such debate to drive prices lower. But CRH (CRH) may have just enough exposure internationally to knock it off its perch.

Double your opportunity

At times such as this – when markets could be on the cusp of a recovery, but the fundamentals just don’t seem strong enough to usher things higher – you may already be realising that having the opportunity to profit from falling as well as rising prices is a godsend.

Our specialty is helping you to increase your profit potential and/or manage risk, maybe even eliminate it entirely (otherwise known as hedging). To do this, we use contracts for difference (CFDs). CFDs are the ideal way to capitalise on the sorts of opportunities we’re seeing in the markets right now. We explain CFDs on the following page, before looking at some trade examples for Paddy Power Betfair (PPB), CRH (CRH) and Ryanair (RYA).

Shares vs. CFDs

CFDs are leveraged instruments, but you don’t have to use the leverage

If you had, say, €13,000 to invest in the stock market, you could deposit that amount into a share dealing account and purchase shares in a company. You might pay 3% commission to open the position, 1% in stamp duty and the full €13,000 will be tied up in your chosen shares with any profit or loss based on that exposure.

The same €13,000 worth of exposure can be secured with a CFD for a fraction of the initial outlay thanks to leverage, with the risk and reward the same as if €13,000 worth of traditional shares were held. But should you not be interested in leverage, you can always treat CFDs like shares. Simply deposit €13,000 into a CFD trading account and take the equivalent CFD position which will tie up just €1300 (note that overnight financing costs will still apply). The remaining €11,700 is not tied up, so you can use some of that to take advantage of another short-term opportunity elsewhere, or simply leave it on the account to support any losses. Best of all, using a CFD means you pay no stamp duty!

What’s your view?

Think shares will rise? Take a long position by buying CFDs (buy low, aiming to sell high). Think they’ll fall? Take a short position by selling CFDs (sell high, aiming to buy low). For a more detailed rundown of CFDs, their mechanics, associated costs and some trading scenarios click here.

Now, let’s see what opportunities are offered by our 3 Irish stocks: Paddy Power Betfair, CRH and Ryanair

Paddy Power Betfair (PPB) / Online Gambling

• In the UK, PPB is set for promotion to the UK 100 blue-chip index, the ascent from €2.30 to €125 (adjusted for M&A) testament to its solid fundamentals while peers have had a less stable rise to all-time highs.

• Broker Jefferies sees the company “likely to dominate U.K. online sports betting, although there are long-term cannibalisation risks.”

Research and updates provided by Accendo Markets will help you ascertain whether you think the Paddy Power Betfair share price will rally back towards the highs of €140 or fall towards support at €110.

Broker Consensus

Think shares will rise? Then go long. €10,000 (80 shares at €124.80) worth of long exposure can be secured for €1,000 with a CFD, and might seek a re-test of the channel ceiling around €140 and a 12% (€1,200) profit.

Think shares will fall? A more bearish outlook could give a trader cause to take €10,000 worth of short exposure, on the expectation that shares will continue to fall towards €110. Again, with a CFD this can be secured for a €1,000 deposit and, if called correctly, could return an 11% profit.

CRH (CRH) / Building Materials

• FY 2015 results were well received and ushered the shares back towards multi-year highs. CRH appears un-phased by concerns about global growth and exudes confidence in the US and Europe.
• Rating agency Moody’s recently said “Strong US and UK markets will stabilize Europe's building materials sector outlook till 2017.” However, the UK market could well suffer in the shorter term due to Brexit fears (less international interest in the London property scene while the UK decides)

Research and updates provided by Accendo Markets will help you ascertain whether you think CRH shares will fall back towards lows of €20 or rally on to make new highs above €28?

Broker Consensus

Think shares will rise? €10,000 worth of exposure to CRH shares (i.e. 400 shares at €25) can be secured for just €500 with a CFD. If the price subsequently moved up to €28 (a 12% move), you would make €1,200.

Think they’ll fall? The same position size (i.e. a €500 deposit for €10,000 worth of exposure), but betting in the opposite direction, might look for shares to fall 20% to recent lows of €20. If called right, you would make €2,000.

Ryanair (RYA) / Airlines

• RYA continues to outperform its budget airline and flag carrying rivals with traffic figures continuing to grow, helped by fiery CEO Michael O’Leary toning down his harsh views.

• One thing to consider here is the price of fuel. The consensus at the start of the year was ‘lower for longer’ with regard to oil. That’s now being challenged.

Research and updates provided by Accendo Markets will help you ascertain whether you think CRH shares will fall back towards rising lows of €13 or rally on to make new highs above €15.5

Broker Consensus

Think shares will rise? €10,000 worth of exposure to RYA shares (i.e. 730 shares at €13.7) can be secured for €1000 with a CFD. If the price subsequently moved back to the highs of €15.60 (a 15% move), you would make €1,500.

Think they’ll fall? The same position size (i.e. a €1000 deposit for €10,000 worth of exposure), but betting in the opposite direction, might look for shares to fall 4% to rising support at €13. If called correctly, you would make €400.

How Accendo Markets can help you

Whether you see Irish stocks going up or down over the course of 2016, as we’ve illustrated above, tradable opportunities will present themselves regularly. We’re here to help you weed them out and capitalise on them.

We won’t tell you what to do - it’s your call whether you buy or sell. Our aim is to provide the help you need, if you need it. We’ll highlight opportunities which may be profitable to you, the investor, and assist you in making your own trading decisions. Our approach focuses on these 3 elements:

1. Education - not obligation
2. Observations - not recommendations
3. Assistance - not persistence

Our unique, award-winning service provides you with the help and tools you need to make appropriate trading decisions in the financial markets, both to grow and protect your capital. Just imagine how you’ll feel when you’re confident enough to make you own investment and trading decisions, rather than blindly following those of an expensive advisory broker who really has no better chance of calling the market than you anyway.

Before taking a position in the Index or Stocks, be sure to contact Accendo for…

• Updates - How does the index or your preferred stock look in terms of investor sentiment? News and broker updates can emerge daily affecting share prices. Optimism can switch to pessimism in the blink of an eye depending on what’s going on around the world.
• How to use CFDs and Spread Bets to maximise your profit potential.
• How to use the tools available to minimise the risk involved