Fundamental Analyses, Contrarian Cashflows

Contrarian Cashflows

Fundamental Analyses

The purpose of Contrarian Cashflows is to document my investment research and share it with everyone who is interested in value investing. My long term aspiration for Contrarian Cashflows is to become a platform for professional investors and serious amateurs where they can get inspiration and discuss investing-related topics.
I plan to publish one company deep dive per month that is guided by my investment approach. All information I use for my write-ups is publicly available and most of the time directly sourced from public filings issued by the respective companies. To guarantee maximum transparency, for every post I provide a list of all used sources in the resources section.
Contrarian Cashflows is built around the principles of respect, honesty, open-mindedness and a touch of humour. Please consider these principles in any engagement interaction with me, other readers and the content on this blog. Misbehaviour is not tolerated.
If you want to reach out to me directly, the best way is via LinkedIn, Twitter or email. You can find the details at my homepage contrariancashflows.com

Thematic (Sector/Industry)

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!

Alpha-Centric ESG Research

Kyle Rudden

<ul>
<li>One of the significant outcomes of COP26 was an agreement on the mechanism and rules for implementing an international carbon market and emissions trading scheme.</li>
<li>Global carbon markets could help expedite emissions reductions and provide countries greater flexibility in how they meet national-level climate targets under the Paris Agreement.</li>
<li>Global carbon markets are expected to create new investment opportunities including Carbon Capture and Storage (CCS) which plays a key role in carbon markets. Herein, CCS stocks.</li>
</ul>


One of the significant outcomes of COP26 was an agreement on the mechanism and rules for implementing an international carbon market and emissions trading scheme.
Global carbon markets could help expedite emissions reductions and provide countries greater flexibility in how they meet national-level climate targets under the Paris Agreement.
Global carbon markets are expected to create new investment opportunities including Carbon Capture and Storage (CCS) which plays a key role in carbon markets. Herein, CCS stocks.


COP26: Global Carbon Markets Could Mean Investment Opportunities in Carbon Capture and Storage

In a recently published report (<a href="https://www.smartkarma.com/insights/cop26-u-n-climate-conference-to-address-mitigation-financing-and-carbon-pricing" target="_blank" data-smartkarma-citation="insights:59779" rel="noopener">COP26: U.N. Climate Conference to Address Mitigation, Financing, and Carbon Pricing</a>) I mentioned how the COP26 international climate conference (31 October to 12 November) will have far-reaching implications for global capital markets and investing.That Insight was largely about the COP26 conference itself – background, objectives, three critical agenda items with trillions of dollars at stake, and that will influence global financial markets from today (headlines coming out of the conference) through the end of this century.That report was necessary context for this Insight and others that will follow; successively deeper dives into country-specific climate action plans, and investment themes and trading ideas around the COP26 conference and climate change in general. This is the first of those follow-up reports.Herein, I present a brief overview of investment themes and angles directly linked to the three key COP26 agenda items: 1) mitigation of global warming, 2) climate finance, and 3) the development of international carbon markets and pricing mechanisms. Themes and subthemes such as:<ul>
<li>
Climate Transition: "Green" utilities, renewable energy, cleantech, electric vehicles and other areas of smart mobility, green buildings, and related. The "buy solar, sell coal" kinds of stuff.</li>
<li>
Climate Financing: Financial sector stocks poised to benefit from climate change mitigation, reduced risk from portfolio debarbonisation, and new inflows into sustainable/ESG funds.</li>
<li>
Carbon Markets: Pure-play (or close thereto) carbon capture and storage/sequestration (CCS) stocks, plus a few financial sector overlaps (e.g., related to carbon markets, futures, etc.)</li>
</ul>

In a recently published report (COP26: U.N. Climate Conference to Address Mitigation, Financing, and Carbon Pricing) I mentioned how the COP26 international climate conference (31 October to 12 November) will have far-reaching implications for global capital markets and investing.That Insight was largely about the COP26 conference itself – background, objectives, three critical agenda items with trillions of dollars at stake, and that will influence global financial markets from today (headlines coming out of the conference) through the end of this century.That report was necessary context for this Insight and others that will follow; successively deeper dives into country-specific climate action plans, and investment themes and trading ideas around the COP26 conference and climate change in general. This is the first of those follow-up reports.Herein, I present a brief overview of investment themes and angles directly linked to the three key COP26 agenda items: 1) mitigation of global warming, 2) climate finance, and 3) the development of international carbon markets and pricing mechanisms. Themes and subthemes such as:

Climate Transition: "Green" utilities, renewable energy, cleantech, electric vehicles and other areas of smart mobility, green buildings, and related. The "buy solar, sell coal" kinds of stuff.

Climate Financing: Financial sector stocks poised to benefit from climate change mitigation, reduced risk from portfolio debarbonisation, and new inflows into sustainable/ESG funds.

Carbon Markets: Pure-play (or close thereto) carbon capture and storage/sequestration (CCS) stocks, plus a few financial sector overlaps (e.g., related to carbon markets, futures, etc.)


COP26: An Overview of Investment Themes and Catalysts Related to COP26 Conference

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 17 July 2020, <a href="https://www.smartkarma.com/entities/aker-solutions-asa" target="_blank" data-smartkarma-citation="entities:22221:1" rel="noopener">Aker Solutions (AKSO NO) </a><a href="https://www.prnewswire.co.uk/news-releases/contemplated-merger-between-kvaerner-asa-and-aker-solutions-asa-809974355.html" target="_blank" rel="noopener">agreed to acquire </a><a href="https://www.smartkarma.com/entities/kvaerner-asa" target="_blank" data-smartkarma-citation="entities:24992:1" rel="noopener">Kvaerner ASA (KVAER NO)</a> in a transaction structured as a merger of equals (“statutory merger”), in which Aker Solutions will absorb Kværner.
Both oil-industry suppliers are controlled by Norwegian billionaire Kjell Inge Røkke, while Norway is also a shareholder in Aker Solutions. The declared rationale of the merger is to vertically integrate to become a stronger player in the global energy industry. Both companies have been hit by the reduction of capex among the oil companies and drilling contractors, in the wake of the coronavirus crises. Røkke seeks to unlock synergies in a leaner company and win business opportunities in renewable energies.
Shares in Oslo-listed Aker Solutions closed 34.2% higher, while Kværner’s shares closed 7.7% higher. The combined market cap edged 21.8% higher (NOK 6,358 mn at closing prices of Friday).
With the same majority shareholder in both companies and the acquiescence of Norway, cost synergies (8.5% of FY 2019 operating expenses), larger market cap and higher liquidity, this defensive deal has all the elements to succeed. I will update this situation if and when new information arises.
Read on for more details.

On 17 July 2020, Aker Solutions (AKSO NO) agreed to acquire Kvaerner ASA (KVAER NO) in a transaction structured as a merger of equals (“statutory merger”), in which Aker Solutions will absorb Kværner.
Both oil-industry suppliers are controlled by Norwegian billionaire Kjell Inge Røkke, while Norway is also a shareholder in Aker Solutions. The declared rationale of the merger is to vertically integrate to become a stronger player in the global energy industry. Both companies have been hit by the reduction of capex among the oil companies and drilling contractors, in the wake of the coronavirus crises. Røkke seeks to unlock synergies in a leaner company and win business opportunities in renewable energies.
Shares in Oslo-listed Aker Solutions closed 34.2% higher, while Kværner’s shares closed 7.7% higher. The combined market cap edged 21.8% higher (NOK 6,358 mn at closing prices of Friday).
With the same majority shareholder in both companies and the acquiescence of Norway, cost synergies (8.5% of FY 2019 operating expenses), larger market cap and higher liquidity, this defensive deal has all the elements to succeed. I will update this situation if and when new information arises.
Read on for more details.

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

Improvements in Japan are leading broad developed int’l indexes higher. The MSCI EAFE, local currency is bullishly inflecting above its downtrend and putting an end to the YTD pattern of lower highs. Both the TOPIX and Nikkei 225 have continued to improve, and now the TOPIX Small index is also bullishly inflecting. We provide a technical appraisal of major global markets, and highlight a number of actionable stocks within Japan, and across international markets.

Improvements in Japan are leading broad developed int’l indexes higher. The MSCI EAFE, local currency is bullishly inflecting above its downtrend and putting an end to the YTD pattern of lower highs. Both the TOPIX and Nikkei 225 have continued to improve, and now the TOPIX Small index is also bullishly inflecting. We provide a technical appraisal of major global markets, and highlight a number of actionable stocks within Japan, and across international markets.

MSCI EAFE Inflecting, Aided by Strength in Japan

Norway

Aker Solutions ASA provides products, systems, and services to oil and gas companies. The Company offers subsea production equipment and offshore field design to oil and gas companies globally.

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Aker Solutions (AKSO NO)

Monday Delight: 13/10/25

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you...

Contrarian Cashflows

COP26: Global Carbon Markets Could Mean Investment Opportunities in Carbon Capture and Storage

COP26 set the stage for a new global carbon marketplace which could create trillions of dollars of new investment opportunities, including Carbon...

Kyle Rudden

Aker Solutions - Kværner Agreed Merger

On 17 July 2020, Aker Solutions (AKSO NO) agreed to acquire Kvaerner ASA (KVAER NO) in a transaction structured as a merger of equals (“statutory...

Jesus Rodriguez Aguilar

MSCI EAFE Inflecting, Aided by Strength in Japan

Improvements in Japan are leading broad developed int’l indexes higher. The MSCI EAFE, local currency is bullishly inflecting above its downtrend...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Monday Delight: 13/10/25

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you...

Contrarian Cashflows

COP26: Global Carbon Markets Could Mean Investment Opportunities in Carbon Capture and Storage

COP26 set the stage for a new global carbon marketplace which could create trillions of dollars of new investment opportunities, including Carbon...

Kyle Rudden

COP26: An Overview of Investment Themes and Catalysts Related to COP26 Conference

COP26, the climate conference happening now, will impact global capital markets. Perhaps over the next two weeks, depending on headlines, but...

Kyle Rudden

Aker Solutions - Kværner Agreed Merger

On 17 July 2020, Aker Solutions (AKSO NO) agreed to acquire Kvaerner ASA (KVAER NO) in a transaction structured as a merger of equals (“statutory...

Jesus Rodriguez Aguilar

MSCI EAFE Inflecting, Aided by Strength in Japan

Improvements in Japan are leading broad developed int’l indexes higher. The MSCI EAFE, local currency is bullishly inflecting above its downtrend...

Vermilion Research