Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Macroeconomics

<p>Two months ago, Evidente published a report which suggested that contrary to the RBA's view that the currency remained over-valued, the Australian dollar was trading below fair value. &nbsp;After what had been a strong period of out-performance from US dollar earners, I concluded that without the tailwind of A$ over-valuation - which prevailed through most of 2014 - their returns in the near term would be capped. In this post, I show that recent currency appreciation has eliminated the modest under-valuation and been associated with under-performance from US$ earners. The basket is trading on a median 12 mth forward PE of 20x, which represents a 25% premium to the median estimate for the ASX100, slightly higher than historical norms. The premium reflects the fact that offshore earners have strong growth expectations and low betas, thanks to their defensive business models. I highlight that the stocks suffering from the highest level of analyst bearishness remain Cochlear, Treasury Wine Estates and Westfield, which each attract less than 20% of buy recommendations from analysts.</p><p>&nbsp;</p>

Two months ago, Evidente published a report which suggested that contrary to the RBA's view that the currency remained over-valued, the Australian dollar was trading below fair value. &nbsp;After what had been a strong period of out-performance from US dollar earners, I concluded that without the tailwind of A$ over-valuation - which prevailed through most of 2014 - their returns in the near term would be capped. In this post, I show that recent currency appreciation has eliminated the modest under-valuation and been associated with under-performance from US$ earners. The basket is trading on a median 12 mth forward PE of 20x, which represents a 25% premium to the median estimate for the ASX100, slightly higher than historical norms. The premium reflects the fact that offshore earners have strong growth expectations and low betas, thanks to their defensive business models. I highlight that the stocks suffering from the highest level of analyst bearishness remain Cochlear, Treasury Wine Estates and Westfield, which each attract less than 20% of buy recommendations from analysts.&nbsp;

A new narrative for the Australian dollar (update)

<p>The Reserve Bank Board meets today, a month after cutting the official cash rate (OCR) by 25 basis points&nbsp;to a multi-decade low of 2.25%.&nbsp; This followed an 18 month period of interest rate stability.&nbsp;&nbsp;&nbsp; There is a compelling case for the RBA to ease policy now to restore the psychology of risk taking in the economy and combat the new capital and cost discipline.&nbsp; But Mr Stevens has previously said that it is important that further cuts do not send a signal to the market that the economy is weak, at a time when consumer and business sentiment remain fragile.&nbsp; Thus, I believe that the May meeting presents the best opportunity to ease policy with the positive narrative of a lower inflation outlook following the release of the first quarter CPI in late April.</p>

The Reserve Bank Board meets today, a month after cutting the official cash rate (OCR) by 25 basis points&nbsp;to a multi-decade low of 2.25%.&nbsp; This followed an 18 month period of interest rate stability.&nbsp;&nbsp;&nbsp; There is a compelling case for the RBA to ease policy now to restore the psychology of risk taking in the economy and combat the new capital and cost discipline.&nbsp; But Mr Stevens has previously said that it is important that further cuts do not send a signal to the market that the economy is weak, at a time when consumer and business sentiment remain fragile.&nbsp; Thus, I believe that the May meeting presents the best opportunity to ease policy with the positive narrative of a lower inflation outlook following the release of the first quarter CPI in late April.

The New Capital Discipline and the RBA's Line Ball Decision

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/humm-group" target="_blank" data-smartkarma-citation="entities:35366:1" rel="noopener">Humm Group (HUM AU)</a></strong> announces approaches from third parties to acquire all or part of the company. Separately, Andrew Abercrombie, the founder, and major shareholder is stepping down.</li>
<li>This development follows the recently completed takeover of Buy Now, Pay Later (BNPL) market leader <strong><a href="https://www.smartkarma.com/entities/afterpay-limited" target="_blank" data-smartkarma-citation="entities:26940:1" rel="noopener">Afterpay Touch (APT AU)</a></strong> by <strong><a href="https://www.smartkarma.com/entities/square-inc" target="_blank" data-smartkarma-citation="entities:23755:1" rel="noopener">Square Inc (SQ US)</a></strong>.</li>
<li>Humm intends to engage in relation to these proposals, however there is no assurance that any transaction will occur.</li>
</ul>



Humm Group (HUM AU) announces approaches from third parties to acquire all or part of the company. Separately, Andrew Abercrombie, the founder, and major shareholder is stepping down.
This development follows the recently completed takeover of Buy Now, Pay Later (BNPL) market leader Afterpay Touch (APT AU) by Square Inc (SQ US).
Humm intends to engage in relation to these proposals, however there is no assurance that any transaction will occur.


<div>
<p>Back on the 1 July, <a href="https://www.smartkarma.com/entities/rhipe-ltd" target="_blank" data-smartkarma-citation="entities:19128:1" rel="noopener">rhipe Ltd (RHP AU)</a>, a provider of cloud-based subscription software-as-a-service licenses,  <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02390415-3A569823?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a non-binding indicative proposal from Norway's Crayon Group Holdings. </p>
<p>Less than a week later, rhipe <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02392336-3A570178?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">entered</a> into a Scheme Implementation Deed.</p>
<p>The Scheme consideration is A$2.50/share, less any permitted special dividend.</p>
<p>rhipe's board said it intended to declare a fully franked special dividend, to be paid before the Scheme's implementation date.</p>
<div>
<div>
<p>The Scheme Booklet is now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02418756-3A575319?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">out</a>. The Scheme Meeting will be held on the 11 October, with an expected implementation date on the 3 November. The special dividend record date is the 18 October. </p>
<p>This looks done.</p>
</div>
</div>
</div>
<div>
<p></p>
</div>


Back on the 1 July, rhipe Ltd (RHP AU), a provider of cloud-based subscription software-as-a-service licenses,  announced a non-binding indicative proposal from Norway's Crayon Group Holdings. 
Less than a week later, rhipe entered into a Scheme Implementation Deed.
The Scheme consideration is A$2.50/share, less any permitted special dividend.
rhipe's board said it intended to declare a fully franked special dividend, to be paid before the Scheme's implementation date.


The Scheme Booklet is now out. The Scheme Meeting will be held on the 11 October, with an expected implementation date on the 3 November. The special dividend record date is the 18 October. 
This looks done.







Rhipe (RHP AU): Done Deal As Scheme Booklet Dispatched

<div>
<p>The takeovers of Aussie tech companies continue. </p>
<p>On the 7 June, <a href="https://www.smartkarma.com/entities/altium-ltd" target="_blank" data-smartkarma-citation="entities:18626:1" rel="noopener">Altium Ltd (ALU AU)</a>, a global software company, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382370-2A1302312?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">confirmed and subsequently rejected</a> a non-binding proposal from <a href="https://www.smartkarma.com/entities/autodesk-inc" target="_blank" data-smartkarma-citation="entities:13211:1" rel="noopener">Autodesk Inc (ADSK US)</a> - discussed in <em><a href="https://skr.ma/we6mt" target="_blank" rel="noopener">Altium Ltd (ALU) Rebuffs Autodesk Offer</a>.</em> This was followed on the same day by  <a href="https://www.smartkarma.com/entities/hansen-technologies-ltd" target="_blank" data-smartkarma-citation="entities:12633:1" rel="noopener">Hansen Technologies (HSN AU)</a>, a provider of software and services globally, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382235-3A568452?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announcing</a> Australian PE outfit BGH Capital had made a non-binding conditional proposal - see <em><a href="https://skr.ma/pAK5Y" target="_blank" rel="noopener">Hansen Technologies (HSN AU)'s Assured Deal With BGH</a></em>.</p>
<p>Now <a href="https://www.smartkarma.com/entities/rhipe-ltd" target="_blank" data-smartkarma-citation="entities:19128:1" rel="noopener">rhipe Ltd (RHP AU)</a>, a provider of cloud-based subscription software-as-a-service licenses,  has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02390415-3A569823?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a non-binding indicative proposal from Norway's Crayon Group Holdings. </p>
<p>The proposal is conditional on rhipe having a net cash position of A$31mn at the close of the Offer.</p>
<p>A final binding Offer is conditional on due diligence, the unanimous recommendation from rhipe's board, and no MACs.</p>
<p>rhipe has provided Crayon with limited confirmatory due diligence on a  non-exclusive basis.</p>
<p>The Offer price appears opportunistic and is currently trading through terms. </p>
<p> More below the fold. </p>
</div>
<div>
<p data-gtm-vis-recent-on-screen-7770372_137="1025" data-gtm-vis-first-on-screen-7770372_137="1025" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1"></p>
</div>


The takeovers of Aussie tech companies continue. 
On the 7 June, Altium Ltd (ALU AU), a global software company, confirmed and subsequently rejected a non-binding proposal from Autodesk Inc (ADSK US) - discussed in Altium Ltd (ALU) Rebuffs Autodesk Offer. This was followed on the same day by  Hansen Technologies (HSN AU), a provider of software and services globally, announcing Australian PE outfit BGH Capital had made a non-binding conditional proposal - see Hansen Technologies (HSN AU)'s Assured Deal With BGH.
Now rhipe Ltd (RHP AU), a provider of cloud-based subscription software-as-a-service licenses,  has announced a non-binding indicative proposal from Norway's Crayon Group Holdings. 
The proposal is conditional on rhipe having a net cash position of A$31mn at the close of the Offer.
A final binding Offer is conditional on due diligence, the unanimous recommendation from rhipe's board, and no MACs.
rhipe has provided Crayon with limited confirmatory due diligence on a  non-exclusive basis.
The Offer price appears opportunistic and is currently trading through terms. 
 More below the fold. 





Rhipe (RHP AU): Crayon Sees Silver in Them Thar Clouds

Australia

Rhipe Limited provides licensing, business development and knowledge services that support services providers, system integrators and software vendors accelerate the adoption of the cloud by end customers.

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Rhipe Ltd (RHP AU)

A new narrative for the Australian dollar (update)

Two months ago, Evidente published a report which suggested that contrary to the RBA's view that the currency remained over-valued, the Australian...

Sam Ferraro

The New Capital Discipline and the RBA's Line Ball Decision

The Reserve Bank Board meets today, a month after cutting the official cash rate (OCR) by 25 basis points to a multi-decade low of 2.25%. This...

Sam Ferraro

BNPL Play Hummgroup Fields Proposals

humm group is in play, and by extension, given Andrew Abercrombie's decision to step down, his stake is likely up for grabs

David Blennerhassett

Rhipe (RHP AU): Done Deal As Scheme Booklet Dispatched

This has the support of major shareholder Tutus McDonagh. Trading at a 0.8%/5.5% gross/annualised spread. If you can take advantage of the franking...

David Blennerhassett

Rhipe (RHP AU): Crayon Sees Silver in Them Thar Clouds

The granting of DD indicates Rhipe is open to a firm offer, yet the non-exclusive nature of that DD suggests other suitors are welcome. I'd be...

David Blennerhassett

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