Spread Bet Bunzl plc
Bunzl plc [BNZL] as a company was incorporated in 1940, and went on to the London Stock Exchange in 1957. However, it traces its roots back to 1854 when the original Bunzl opened his shop in Bratislava, Slovakia. It functions as an international distribution and outsourcing group, supporting many other businesses by procuring and delivering non-food items to supermarkets, retailers, food processors, etc.
While it is tempting to try and categorize more precisely the types of products delivered, the simple fact that Bunzl in its UK operation supplies more than 100,000 products, including packaging, cleaning, disposables, safety and others with UK revenues of £1 billion in 2011 means that this is not an easy exercise. The UK part of the business accounts for only 20% of the group’s revenue, and the US branch based in St. Louis, Missouri deals with 500,000 different supply items delivered to all 50 states.
Bunzl prides itself on being able to assist its many customers “behind-the-scenes”, helping businesses by taking care of the mundane in order to allow them to concentrate on their chosen focus. Businesses outsource the supply of consumable products to Bunzl, which has the advantage of scale to achieve purchasing efficiencies, so that goods are provided competitively priced and with little internal administration required from the clients.
Of course, with this business model you are dependent on other businesses such as grocery stores, retailers, hotels, healthcare providers, and others being able to thrive, and require your services, and therefore there was a dip in the share price of Bunzl when the global economic crisis hit, as you can see on this monthly price chart: –
But overall, Bunzl appears to be in on the path of steady growth, with a business that takes care of others’ headaches and increases their bottom line. Bunzl’s global presence has protected it from regions that have suffered more during the economic gloom, such as Ireland and the UK while its approach of making acquisitions to boost revenue and profits appears to have worked fairly well in the past.
Bunzl Rolling Daily
Bunzl is a service company, efficiently providing consumable needs to a large range of businesses. It does not deal with the products which are produced for sale by the businesses, but provides every other need for the businesses to function. The current spread betting quotation for a daily bet is 1015.5 – 1020.5.
If you think that the share price is too high, and that it will come down in the next few days, then you may decide to place a short or sell spread bet on this equity, staking say £6.50 per point. The sell bet is placed at the lower price of 1015.5. Assuming that you are correct, you could decide to take your winnings when the price drops to 931.6 – 936.6.
You can work out how much you won by figuring out first how many points you made. Your spread bet started at 1015.5, and it closed at 936.6. Taking one away from the other, you have made 78.9 points. At £6.50 per point that works out to £512.85.
Everyone has losing bets sometimes, so you also need to look at how much this spread bet could cost you. Say the price went up after you placed the bet, until you eventually decided to close the spread bet to save any further losses, say when the price was 1082.3 – 1087.3. A short bet closes on the higher price, in this case 1087.3, so taking away 1015.5 you find you have lost 71.8 points. That has cost you £466.70.
If you don’t have time to keep an eye on the price, or if you want to take away some of the emotion of closing your bet for a loss, then you might have placed a stop loss order when you opened your spread bet. Perhaps this would close your bet when the price was 1060.2 – 1065.2. Your points lost were 1065.2 less 1015.5, which is 49.7. For your chosen stake this amounts to a loss of £323.05.
Bunzl Futures Betting
Bunzl specialize in procurement and delivery of a range of consumable products for businesses of all types. Looking at the near future spread bet quote, the selling price is 1016.0 and the buying price is 1024.1. If you think that the stocks are going to go up in value in the next few weeks then you may place a long bet for £8.75 per point at 1024.1.
If you are correct, and the spread bet quotation goes higher, then you can close your trade and collect your profit. Say it goes up to 1098.2 – 1105.0 and you decide to take your winnings. The spread trade closes at 1098.2, and if you take away the buying price of 1024.1 you will find that you have gained 74.1 points. That means you have profited by £648.37.
Sometimes your bet will go the wrong way and you will be faced with the difficult decision to close your trade and accept your loss in case it becomes even greater. Say the price dropped down to 981.3 – 988.7, and you decided to cut your losses. The spread bet which you opened at 1024.1 has closed at 981.3, losing you 42.8 points. This would have cost you £374.50.
Many traders decide to place a stop loss orders on any new trades. These instruct the spread betting provider to close the position when the price goes to a certain level of loss. If you had done this, you might have found that your losing trade was closed earlier, perhaps at 1003.4 – 1010.2. In this case you have reduced the amount of loss you suffered from the drop in price. Once again your starting price was 1024.1, but this time the spread bet closed at 1003.4, for a loss of 20.7 points. You have kept your losses down to £181.12.
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