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)

<ul><li>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.</li><li>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.</li><li>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!</li></ul>

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!

AlphaSituations-Event/Catalyst Driven Research, AlphaSituations

Robert Sassoon

AlphaSituations-Event/Catalyst Driven Research

AlphaSituations

Since its establishment, AlphaSituations has delivered a track record of outperformance with a hit rate of winners of more than 70% of its portfolio of ideas generating annualized average returns of 20%. In January 2022, AlphaSituations was contracted by Water Tower Research, an investor engagement and stakeholder communication platform to provide coverage of Special Situations

Event-Driven

Among the universe of live M&amp;A deals we monitor (US M&amp;A deals of  &gt;$400MN), which we list below,  there are several deals where the prevailing spread  is above 10% offering  the potential for very  annualized returns  of &gt;50% based on their targeted closing dates.  Usually when the market is offering IRRs of that magnitude, it is indicating there is a high risk that those deals do not complete at all or, if they do,  under revised terms that are less favorable to the target company shareholders or that there is significant timing risk not originally anticipated. When it comes to spreads, Mr. Market may be right more often than not, but most definitely not always. These situations may not be that common, but it is those misunderstood situations which  provides some that we at AlphaSituations attempt to identify. <h3>The Search For Compelling Spreads</h3><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/378/original/image_82700697241635169253114.png?1635169255" class="editor-image img-responsive" data-smartkarma-image-id="237378"></figure>Source: AlphaSituations In the list above , the stand out spread remains the Wise Road Capital/ <a href="https://www.smartkarma.com/entities/magnachip-semiconductor-corp" target="_blank" data-smartkarma-citation="entities:28052:1" rel="noopener">MagnaChip Semiconductor Corp (MX US)</a> situation. This is one we have covered in previous insights, most recently in our June 29, 2021 publication: MergerTalk: Intriguing US Merger Spreads - Why Magnachip Semiconductor is at the top of our list. Since that Insight, CFIUS did initially block the deal on national security grounds (or at least left it to President Biden to decide), but subsequently agreed to the transactional parties request to withdraw and re-file their submission  in order to permit further discussion with CFIUS concerning potential options for permanently mitigating risks to the US national security that have been identified by CFIUS. This triggered a new CFIUS review period for the merger  commencing on September 14, 2021 which is expected to conclude no later than October 28, 2021. With that date only a few days away (although CFIUS has the option to extend this review process by undertaking a 45-day investigation), given the ~61% spread, the market is clearly dismissing the prospect that CFIUS will change its stance the second time around. Nevertheless, we  maintain that MX has a fundamental safety net at its current valuation (further supported by the strong 3Q 2021 earnings reported on October 25, 2021  and could remain a buyout target should the Wise Road transaction be ultimately  blocked. We will continue to monitor this situation.In this insight, we focus  on another more intriguing spreads - the Garnet Faith/  <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a>  merger transaction, which also has a China theme to it. Below, we explore the reasons for the wide spread and assess the risks. We conclude that the odds remain heavily in favor of deal consummation with the current ~24% spread offering a lucrative entry point for arbs.

Among the universe of live M&amp;A deals we monitor (US M&amp;A deals of  &gt;$400MN), which we list below,  there are several deals where the prevailing spread  is above 10% offering  the potential for very  annualized returns  of &gt;50% based on their targeted closing dates.  Usually when the market is offering IRRs of that magnitude, it is indicating there is a high risk that those deals do not complete at all or, if they do,  under revised terms that are less favorable to the target company shareholders or that there is significant timing risk not originally anticipated. When it comes to spreads, Mr. Market may be right more often than not, but most definitely not always. These situations may not be that common, but it is those misunderstood situations which  provides some that we at AlphaSituations attempt to identify. The Search For Compelling SpreadsSource: AlphaSituations In the list above , the stand out spread remains the Wise Road Capital/ MagnaChip Semiconductor Corp (MX US) situation. This is one we have covered in previous insights, most recently in our June 29, 2021 publication: MergerTalk: Intriguing US Merger Spreads - Why Magnachip Semiconductor is at the top of our list. Since that Insight, CFIUS did initially block the deal on national security grounds (or at least left it to President Biden to decide), but subsequently agreed to the transactional parties request to withdraw and re-file their submission  in order to permit further discussion with CFIUS concerning potential options for permanently mitigating risks to the US national security that have been identified by CFIUS. This triggered a new CFIUS review period for the merger  commencing on September 14, 2021 which is expected to conclude no later than October 28, 2021. With that date only a few days away (although CFIUS has the option to extend this review process by undertaking a 45-day investigation), given the ~61% spread, the market is clearly dismissing the prospect that CFIUS will change its stance the second time around. Nevertheless, we  maintain that MX has a fundamental safety net at its current valuation (further supported by the strong 3Q 2021 earnings reported on October 25, 2021  and could remain a buyout target should the Wise Road transaction be ultimately  blocked. We will continue to monitor this situation.In this insight, we focus  on another more intriguing spreads - the Garnet Faith/  51 Job Inc Adr (JOBS US)  merger transaction, which also has a China theme to it. Below, we explore the reasons for the wide spread and assess the risks. We conclude that the odds remain heavily in favor of deal consummation with the current ~24% spread offering a lucrative entry point for arbs.

MergerTalk: Intriguing US Merger Spreads-A 23% Spread, But Odds on 51job.com Privatization Completes

Genworth Financial Inc Cl A / Event-Driven

After 4 years plus of disappointment, short of another period of severe market dislocation, we believe actions that will bring about a long overdue share price re-rating for <a href="https://www.smartkarma.com/entities/genworth-financial-inc-cl-a" target="_blank" data-smartkarma-citation="entities:3876:1" rel="noopener">Genworth Financial Inc Cl A (GNW US)</a> are most likely just weeks away. This insight considers valuation scenarios for the Enact Holdings (ACT US) IPO  and their ramifications for GNW and its share price.

After 4 years plus of disappointment, short of another period of severe market dislocation, we believe actions that will bring about a long overdue share price re-rating for Genworth Financial Inc Cl A (GNW US) are most likely just weeks away. This insight considers valuation scenarios for the Enact Holdings (ACT US) IPO  and their ramifications for GNW and its share price.

SpinTalk: Genworth Raises The Curtain On Its Follow-Up ACT-Why We May Be Looking At A September IPO

<a href="https://www.smartkarma.com/entities/genworth-financial-inc-cl-a" target="_blank" data-smartkarma-citation="entities:3876:1" rel="noopener">Genworth Financial Inc Cl A (GNW US)</a> has filed an amended S-1 for the pending IPO of its US Mortgage Insurance business, disclosing the quantity of shares to be sold and the pricing range, which looks attractively pitched relative to its publicly traded peers.  The  IPO will help to crystallize the value of the business with GNW which will continue to own more than 80% of the business. Moreover, given the limited float that comes with this IPO, GNW will continue to be a more  liquid investment alternative to leverage the recovering strength of this mortgage insurer. Our updated GNW SOTP assessment points to 45% upside  to $6.39 in the GNW share price (with potential for further upside) based on  our expectation that the IPO will be priced at the top end of the proposed $20-$24/share IPO pricing range.

Genworth Financial Inc Cl A (GNW US) has filed an amended S-1 for the pending IPO of its US Mortgage Insurance business, disclosing the quantity of shares to be sold and the pricing range, which looks attractively pitched relative to its publicly traded peers.  The  IPO will help to crystallize the value of the business with GNW which will continue to own more than 80% of the business. Moreover, given the limited float that comes with this IPO, GNW will continue to be a more  liquid investment alternative to leverage the recovering strength of this mortgage insurer. Our updated GNW SOTP assessment points to 45% upside  to $6.39 in the GNW share price (with potential for further upside) based on  our expectation that the IPO will be priced at the top end of the proposed $20-$24/share IPO pricing range.

SpinTalk: Catalyst For Undervalued Genworth Financial With Mortgage Insurance Business IPO Imminent

The abandonment of its merger transaction with China Oceanwide has freed a financially healthier <a href="https://www.smartkarma.com/entities/genworth-financial-inc-cl-a" target="_blank" data-smartkarma-citation="entities:3876:1" rel="noopener">Genworth Financial Inc Cl A (GNW US)</a> to pursue its revised strategic plan without restrictions and without uncertainty regarding its ultimate ownership. With what had seemingly been a never ending saga now finally over, we assert that Plan B will likely yield a more beneficial outcome to GNW shareholders than had the Oceanwide transaction moved to completion in the current circumstances.

The abandonment of its merger transaction with China Oceanwide has freed a financially healthier Genworth Financial Inc Cl A (GNW US) to pursue its revised strategic plan without restrictions and without uncertainty regarding its ultimate ownership. With what had seemingly been a never ending saga now finally over, we assert that Plan B will likely yield a more beneficial outcome to GNW shareholders than had the Oceanwide transaction moved to completion in the current circumstances.

SpinTalk: How Genworth Financial Holdings (GNW US)Creates More Value Without The Oceanwide Merger

United States

Genworth Financial Inc. offers insurance, wealth management, investment and financial solutions   The Company offers products that include life insurance products, long-term care insurance, and mortgage guarantee insurance coverage on residential mortgage loans.  Genworth is active in the United States, Canada, Australia, New Zealand, Mexico and multiple European countries.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Genworth Financial Inc Cl A (GNW US)

Monday Delight: 14/04/25

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

Contrarian Cashflows

MergerTalk: Intriguing US Merger Spreads-A 23% Spread, But Odds on 51job.com Privatization Completes

Precedent suggests that the odds heavily favor that this Go-Private deal will be consummated. With JOBS only 4% above its undisturbed price, the ...

Robert Sassoon

SpinTalk: Genworth Raises The Curtain On Its Follow-Up ACT-Why We May Be Looking At A September IPO

After 4 years plus of false dawns, this time may be truly be different for a long overdue share price value re-rating with an IPO of GNW's prized...

Robert Sassoon

SpinTalk: Catalyst For Undervalued Genworth Financial With Mortgage Insurance Business IPO Imminent

Genworth's now seemingly imminent partial IPO of its US Mortgage Insurance business looks attractively pitched and should drive more value for GNW...

Robert Sassoon

SpinTalk: How Genworth Financial Holdings (GNW US)Creates More Value Without The Oceanwide Merger

GNW shareholders are likely to better off now that the Oceanwide deal has been called off deal as the focus turns to the pending separation of...

Robert Sassoon

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)