European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>ABB's 506p offer values Rotork at 18.9x NTM EBITDA, but estimated £42m annual synergies reduce the effective acquisition multiple to approximately 15.8x, supporting the industrial rationale.</li>
<li>Rotork traded well below comparable automation companies before the approach. We estimate a standalone value of 390p/share, implying ABB pays a 30% premium to intrinsic value.</li>
<li>The remaining 4.3% spread appears attractive given unanimous Board support, committed financing and limited antitrust overlap, with international regulatory approvals representing the principal execution risk.</li>
</ul>


ABB's 506p offer values Rotork at 18.9x NTM EBITDA, but estimated £42m annual synergies reduce the effective acquisition multiple to approximately 15.8x, supporting the industrial rationale.
Rotork traded well below comparable automation companies before the approach. We estimate a standalone value of 390p/share, implying ABB pays a 30% premium to intrinsic value.
The remaining 4.3% spread appears attractive given unanimous Board support, committed financing and limited antitrust overlap, with international regulatory approvals representing the principal execution risk.


ABB/Rotork: A Full Price for an Undervalued Business

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

We highlight several positive developments that have occurred since last week’s Int’l Compass report, all of which continue to support our overall constructive outlook. Last week we noted Europe’s STOXX 500 was on the cusp of a breakout above 4040; we got the breakout. WTI and Brent crude oil also broke above key multi-year resistance at $67 and $70, respectively. The MSCI ACWI, ACWI ex-US, and EAFE indexes each hit new all-time highs and remain in uptrends. The MSCI Emerging Markets index (EEM-US) bullishly inflected above short-term resistance at $55.35 and RS is reversing the downtrend. These are all bullish signals for global equities, and our constructive outlook remains appropriate.

We highlight several positive developments that have occurred since last week’s Int’l Compass report, all of which continue to support our overall constructive outlook. Last week we noted Europe’s STOXX 500 was on the cusp of a breakout above 4040; we got the breakout. WTI and Brent crude oil also broke above key multi-year resistance at $67 and $70, respectively. The MSCI ACWI, ACWI ex-US, and EAFE indexes each hit new all-time highs and remain in uptrends. The MSCI Emerging Markets index (EEM-US) bullishly inflected above short-term resistance at $55.35 and RS is reversing the downtrend. These are all bullish signals for global equities, and our constructive outlook remains appropriate.

Major Breakouts For WTI and Brent Crude Oil. Actionable Themes: Energy, Manufacturing, Autos/Parts

Global equities are now breaking out to new highs amid positive technical developments -- something we noted was increasingly likely in last week’s Int’l Compass. These breakouts and other technical developments highlighted below argue that this is the beginning of a new leg higher. Now is the time to be playing offense. In today’s report we highlight our favorite setups within Industrials, spanning the Vermilion international Manufacturing, Services, and Transportation Sectors.

Global equities are now breaking out to new highs amid positive technical developments -- something we noted was increasingly likely in last week’s Int’l Compass. These breakouts and other technical developments highlighted below argue that this is the beginning of a new leg higher. Now is the time to be playing offense. In today’s report we highlight our favorite setups within Industrials, spanning the Vermilion international Manufacturing, Services, and Transportation Sectors.

Global Equity Strategy: Global Equities Beginning a New Leg Higher

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

As the world says goodbye to Rethink Robotics' Baxter and Sawyer, we would caution against drawing the wrong inferences from the failure of this pioneer of the cobotics movement.Ultimately, while Rethink Robotics had a great idea, we believe poor execution and product fit - particularly for more demanding industrial customers were what doomed the company, rather than a weak market where, by all accounts, growth continues to steam along. While market expectations have rightly corrected.

As the world says goodbye to Rethink Robotics' Baxter and Sawyer, we would caution against drawing the wrong inferences from the failure of this pioneer of the cobotics movement.Ultimately, while Rethink Robotics had a great idea, we believe poor execution and product fit - particularly for more demanding industrial customers were what doomed the company, rather than a weak market where, by all accounts, growth continues to steam along. While market expectations have rightly corrected.

Shuttering of Rethink Robotics Just a Bump in the Road for Cobots

Equity Analyst - Technology & Healthcare

Norm Kumar

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

A weekly review of AI related news stories impacting public companies. In this issue we take brief look at Google's recent entry into healthcare. They used AI to analyze EHRs and demonstrated a high degree of success in predicting potential outcomes. This result could embolden the Company to enter the healthcare analytics field in an aggressive manner. Also highlighted is the continued success of the Chinese in the supercomputer field. Chinese deployments now make up over 40% of the Top 500 supercomputers. This success may offer a blueprint and timeline for Chinese initiatives in AI and Quantum Computing. Finally, the combination of AI &amp; Robotics is opening up new market opportunities. Demand for industrial robotics grew 29% last year and shows no signs of slowing. Increased functionality through AI will only increase demand.

A weekly review of AI related news stories impacting public companies. In this issue we take brief look at Google's recent entry into healthcare. They used AI to analyze EHRs and demonstrated a high degree of success in predicting potential outcomes. This result could embolden the Company to enter the healthcare analytics field in an aggressive manner. Also highlighted is the continued success of the Chinese in the supercomputer field. Chinese deployments now make up over 40% of the Top 500 supercomputers. This success may offer a blueprint and timeline for Chinese initiatives in AI and Quantum Computing. Finally, the combination of AI &amp; Robotics is opening up new market opportunities. Demand for industrial robotics grew 29% last year and shows no signs of slowing. Increased functionality through AI will only increase demand.

Is Google Preparing a Major Entry into Healthcare? Robots and AI Are Going Mainstream & More

Switzerland

ABB Limited provides power and automation technologies. The Company operates under segments that include power products, power systems, automation products, process automation, and robotics.

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ABB (ABB SS)

ABB/Rotork: A Full Price for an Undervalued Business

ABB's 506p offer looks generous, but Rotork was undervalued before the approach. Our valuation and synergy analysis suggests ABB is paying a fair...

Jesus Rodriguez Aguilar

Major Breakouts For WTI and Brent Crude Oil. Actionable Themes: Energy, Manufacturing, Autos/Parts

Today we highlight several positive developments that have occurred since last week’s Int’l Compass report, all of which continue to support our...

Vermilion Research

Global Equity Strategy: Global Equities Beginning a New Leg Higher

Global equities are now breaking out to new highs amid positive technical developments -- something we noted was increasingly likely in last week’s...

Vermilion Research

Shuttering of Rethink Robotics Just a Bump in the Road for Cobots

As the world says goodbye to Rethink Robotics' Baxter and Sawyer, we would caution against drawing the wrong inferences from the failure of this...

Mio Kato

Is Google Preparing a Major Entry into Healthcare? Robots and AI Are Going Mainstream & More

A weekly review of AI related news stories impacting public companies. In this issue we take brief look at Google's recent entry into healthcare....

Norm Kumar

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