Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief discussion of macro trends as well as monetary policy and input cost developments, we assess how these companies performed compared to our analysts’ expectations, and examine credit stats trends. We provide overviews of sector developments, as well as summaries of all the companies’ earnings. This includes classifying all the names into either picks or pans, to provide an overview of which companies we are comfortable of investing in a portfolio context. We highlight that both our picks and pans can be names for which we have “Hold” recommendations.

  Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief discussion of macro trends as well as monetary policy and input cost developments, we assess how these companies performed compared to our analysts’ expectations, and examine credit stats trends. We provide overviews of sector developments, as well as summaries of all the companies’ earnings. This includes classifying all the names into either picks or pans, to provide an overview of which companies we are comfortable of investing in a portfolio context. We highlight that both our picks and pans can be names for which we have “Hold” recommendations. 

Europe HY – H1/23 Assessment And Outlook - Lucror Analytics

The Europe HY Trade Book for August 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for August 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - August 2023 - Lucror Analytics

The Europe HY Trade Book for July 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for July 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - July 2023 - Lucror Analytics

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The £2.55 billion takeover of Ultra by Advent looks set to be waved on by the UK government after the Business Secretary said he was minded to accept the deal.</li>
<li>Cobham was itself taken over and broken up by Advent over the course of 2019 and 2020, amidst some controversy. As in that case, Advent will bag its prey. </li>
<li>The 3500p offer price represents 15.4x EV/Fwd EBITDA (same as at the time of deal announcement). Gross spread is 1.49%, estimated annual return is 8.8% (assuming settlement by 30 August).</li>
</ul>


The £2.55 billion takeover of Ultra by Advent looks set to be waved on by the UK government after the Business Secretary said he was minded to accept the deal.
Cobham was itself taken over and broken up by Advent over the course of 2019 and 2020, amidst some controversy. As in that case, Advent will bag its prey. 
The 3500p offer price represents 15.4x EV/Fwd EBITDA (same as at the time of deal announcement). Gross spread is 1.49%, estimated annual return is 8.8% (assuming settlement by 30 August).


Cobham/​​Ultra Electronics: UK Government Approval

<ul>
<li>SEPI will increase its stake in <a href="https://www.smartkarma.com/entities/indra-sistemas-sa" target="_blank" data-smartkarma-citation="entities:21277:1" rel="noopener">Indra Sistemas Sa (IDR SM)</a> by 9.25% (22.2 days of trading volume) up to 28%, which should have a positive impact on the share price.</li>
<li>Indra has dropped 9.4% on market fears that the Government might interfere in the company's strategy. Nevertheless, this in my view, provides an entry point.</li>
<li>My DCF valuation of Indra is €12.12/share, which implies 44% upside. I believe share purchases should act as a short-term catalyst for the share price.</li>
</ul>


SEPI will increase its stake in Indra Sistemas Sa (IDR SM) by 9.25% (22.2 days of trading volume) up to 28%, which should have a positive impact on the share price.
Indra has dropped 9.4% on market fears that the Government might interfere in the company's strategy. Nevertheless, this in my view, provides an entry point.
My DCF valuation of Indra is €12.12/share, which implies 44% upside. I believe share purchases should act as a short-term catalyst for the share price.


United Kingdom

Rolls-Royce designs, develops, manufactures, and services integrated power systems for use in the air, on land, and at sea. The company operates in civil aerospace, defense, and power systems, offering products like commercial aero engines, naval engines, and power generation solutions. Rolls-Royce was founded in 1904 and is headquartered in London, United Kingdom.

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Rolls-Royce (RR/ LN)

Europe HY – H1/23 Assessment And Outlook - Lucror Analytics

Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief...

Lucror Analytics

Europe HY Trade Book - August 2023 - Lucror Analytics

The Europe HY Trade Book for August 2023 includes current trade recommendations drawn from our European HY coverage universe, along with...

Lucror Analytics

Europe HY Trade Book - July 2023 - Lucror Analytics

The Europe HY Trade Book for July 2023 includes current trade recommendations drawn from our European HY coverage universe, along with...

Lucror Analytics

Cobham/Ultra Electronics: UK Government Approval

The acquisition remains conditional upon the Secretary of State's formal approval, pending the outcome of the public consultation, but it can be...

Jesus Rodriguez Aguilar

SEPI to Raise Stake in Indra

The SEPI will increase its stake in Indra Sistemas Sa (IDR SM) by 9.25% up to 28%, which should have an impact on the share price. The share price...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Europe HY – H1/23 Assessment And Outlook - Lucror Analytics

Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief...

Lucror Analytics

Europe HY Trade Book - August 2023 - Lucror Analytics

The Europe HY Trade Book for August 2023 includes current trade recommendations drawn from our European HY coverage universe, along with...

Lucror Analytics

Europe HY Trade Book - July 2023 - Lucror Analytics

The Europe HY Trade Book for July 2023 includes current trade recommendations drawn from our European HY coverage universe, along with...

Lucror Analytics

Cobham/​​Ultra Electronics: UK Government Approval

The acquisition remains conditional upon the Secretary of State's formal approval, pending the outcome of the public consultation, but it can be...

Jesus Rodriguez Aguilar

SEPI to Raise Stake in Indra

The SEPI will increase its stake in Indra Sistemas Sa (IDR SM) by 9.25% up to 28%, which should have an impact on the share price. The share price...

Jesus Rodriguez Aguilar

Cobham/Ultra Electronics: UK Government Approval