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

The Europe HY Trade Book for October 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for October 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - October 2020 - Lucror Analytics

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<a href="https://www.smartkarma.com/entities/talktalk-telecom-group-plc" target="_blank" data-smartkarma-citation="entities:22175:1" rel="noopener">Talktalk Telecom (TALK LN)</a>  <a href="https://www.talktalkgroup.com/article/talktalkgroup/2020/Statement_regarding_possible_offer" target="_blank" rel="noopener">announced that it has received a preliminary and non-binding proposal</a> from Toscafund Asset Management LLP on behalf of funds advised by it.
Today TalkTalk has closed at 99p, which suggests that the Board has room to negotiate a higher offer price.
The current wave of deals in European telecoms seems to indicate that the sector is still undervalued, in spite of relatively resilient earnings.
Operating trends for the UK broadband market as a whole have been challenging over the past two years, but still, TalkTalk has c.4.2 mn broadband customers. 
Other than cash flow predictability, convergence in the UK (as in other European countries) is becoming increasingly important. The attractiveness of TalkTalk lies in the scale and being a potential target for the remaining two mobile operators that lack broadband customers.
Taking comps, a blended average of EV/Fwd Revenue, EV/Fwd EBITDA and Forward P/E provides an implied equity value of 130.6p per share of TalkTalk, which seems undemanding, in my view, and indicates that there is scope for negotiating a higher price. The premium offered does not represent a knock-out offer, c. 17%. Premia offered in the last telco deals have been around 30%
I recommend LONG TalkTalk at 99p. I believe an improved offer could come in the region of 108p (30% premium).

Talktalk Telecom (TALK LN)  announced that it has received a preliminary and non-binding proposal from Toscafund Asset Management LLP on behalf of funds advised by it.
Today TalkTalk has closed at 99p, which suggests that the Board has room to negotiate a higher offer price.
The current wave of deals in European telecoms seems to indicate that the sector is still undervalued, in spite of relatively resilient earnings.
Operating trends for the UK broadband market as a whole have been challenging over the past two years, but still, TalkTalk has c.4.2 mn broadband customers. 
Other than cash flow predictability, convergence in the UK (as in other European countries) is becoming increasingly important. The attractiveness of TalkTalk lies in the scale and being a potential target for the remaining two mobile operators that lack broadband customers.
Taking comps, a blended average of EV/Fwd Revenue, EV/Fwd EBITDA and Forward P/E provides an implied equity value of 130.6p per share of TalkTalk, which seems undemanding, in my view, and indicates that there is scope for negotiating a higher price. The premium offered does not represent a knock-out offer, c. 17%. Premia offered in the last telco deals have been around 30%
I recommend LONG TalkTalk at 99p. I believe an improved offer could come in the region of 108p (30% premium).

TalkTalk - Toscafund: Preliminary & Non-Binding Proposal

The Europe HY Trade Book for September 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for September 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - September 2020 - Lucror Analytics

The Europe HY Trade Book for August 2020 includes a summary of high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for August 2020 includes a summary of high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - August 2020 - Lucror Analytics

In our third report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we analyse issuers in the building materials & construction sector. While the pandemic could bring construction works to a halt and producers may be affected by supply chain disruptions, the lower oil prices may benefit some companies.

  In our third report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we analyse issuers in the building materials & construction sector.   While the pandemic could bring construction works to a halt and producers may be affected by supply chain disruptions, the lower oil prices may benefit some companies. 

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 3 (Building Materials & Construction) - Lucror Analytics

United Kingdom

TalkTalk is a British telecommunications company that provides broadband internet, fixed-line, and pay television services to consumers and businesses across the United Kingdom. It also offers mobile services and wholesale connectivity through PlatformX Communications. The company is headquartered in Salford, England, and was founded in 2003.

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TalkTalk (TALK LN)

Europe HY Trade Book - October 2020 - Lucror Analytics

The Europe HY Trade Book for October 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with...

Lucror Analytics

TalkTalk - Toscafund: Preliminary & Non-Binding Proposal

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Jesus Rodriguez Aguilar

Europe HY Trade Book - September 2020 - Lucror Analytics

The Europe HY Trade Book for September 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with...

Lucror Analytics

Europe HY Trade Book - August 2020 - Lucror Analytics

The Europe HY Trade Book for August 2020 includes a summary of high-conviction trade ideas drawn from our European HY coverage universe, along...

Lucror Analytics

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 3 (Building Materials & Construction) - Lucror Analytics

In our third report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we...

Lucror Analytics

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