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Deutsche Banks Top Picks

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Deutsche Bank held meetings with the management teams of some of the mid caps over the last week, with the most upbeat meeting being with Frigoglass and Motor Oil.

In a report dated February 18, Deutsche Bank said that there could be an upside risk to its estimates regarding Frigoglass and Motor Oil. 

Motor Oil retains a “buy” recommendation as the DB’s top pick amongst the European refiners. “Increased cash flow should see strengthening in balance sheet and support its strong dividend yield”, according to the report.

Hellenic Exchanges also has a “buy” rating. It was the third consecutive year of volume declines last year (EUR139m vs. a peak of EUR474m in 2007) with the market cap to GDP at 29% (peers 67%) and turnover velocity at 54% (vs. peers at 88%). 

“Hopefully this should be the trough. For 2011 we model volumes of €140m and net income of EUR20m and EUR31m next”, DB said. 

The Bank commented its meeting with Frigoglass as positive, while it maintains its “buy” recommendation. 

If the group manages better market share gains in Asia and better momentum in western/eastern Europe, sales could hover around EUR500-550m in 2011.

Regarding Jumbo, DB says that “Greek GDP was down almost 7% in 4Q10, but we are still Buyers.” In its meeting with the management, Deutsche Bank heard nothing to suggest that its net income estimate of EUR68m for this year was at risk. 

Ellaktor has a “hold” recommendation, as the final permit for the Greek mine could be around the corner, which is not fully discounted in the current share price. 

DB sets a “hold” rating also on Fourlis. “We did not hear anything to suggest Like for Like for IKEA had stabilised or improved so far in 2011 vs. 2010.”

As for Folli-Follie Group (“hold”), Deutsche Bank commented that the management team seemed confident of managing EUR5m cost savings in light of the merger – and of reducing the rent bill by EUR3-4m, while the Bank remains cautious on the domestic market, “although tourism could surprise”.

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