European CDR’s

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How do you feel about the new European CDR’s CIBC has put out? Are there any you would buy? Allianz SE, listed as ALZ on the NEO (ALV.DE on the DAX ) and Siemens, listed as SMNS on the NEO (SIE.DE on the DAX) look intriguing to me.

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Asked on March 28, 2025 7:53 am
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Siemens is a solid company. It is benefitting quite a bit recently due to some ramped up infrastructure spending (think Germany's large commitment to boosted spending not too long ago).

The only reason I probably wouldn't buy the company is simply due to the cyclicality of it. If we look back to pretty much every single recession/rate cycle, the company has gone through some substantial drawdowns, likely due to the higher rate environment scaling back spending. This is a company that relies heavily on business and government spending, which will no doubt scale back in weak economic environments.

If we look back to the previous 12-13 years for the company, it hadn't returned much more than its dividend. Too many ebbs and flows in this one for my liking. However, could be a solid short-term play if infrastructure spend ramps up here over the next few years. Not something I'd buy and hold though.

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Posted by Dan Kent
Answered on March 28, 2025 8:35 am