Thematic Investing in Tech and Media, CM Research

Cyrus Mewawalla

Thematic Investing in Tech and Media

Thematic TMT investing

CM Research

CM Research is an independent research house based in London, England. We provide global thematic research in the Technology, Media and Telecoms (TMT) sectors. 

Our focus is on disruptive technologies: how will they unfold; which industries will be impacted; and who will be the ultimate winners and losers. 

Our aim is to help investors predict share prices and corporate executives stay one step ahead of the technology trends that are shaping their industry. 

We research technology investment themes in detail and then feed the results into a scorecard system to quantify the impact of several conflicting themes on individual stocks. 

Recent themes covered include internet TV, the Internet of Things, Big Data, Mobile payments, crowdfunding, artificial intelligence, the cloud, software defined networking and Generation Hashtag.

We cover the top 500 global TMT stocks by market capitalisation and several technology start-ups and pre-IPO companies too. 

In 2015, CM Research analysts outperformed the Bloomberg Benchmark Analyst Index - which measures how good analysts are at predicting stock prices - by 7.1%.

Thematic (Sector/Industry)

During this decade, the digital data universe is expected to grow 75-fold from 1.2 zettabytes to 90 zettabytes. (1 zettabyte = 1 trillion gigabytes).Ask any CEO how he expects to sell more products and cut more costs and he will tell you that Big Data features prominently in his strategy. Big Data refers to the technology processes by which companies can profit from the large amounts of data to which they have access.But investors who want to ride the Big Data wave are finding that it is not that easy to identify where to invest.In this report, we delve deep down into the Big Data supply chain and look at where the investment opportunities really lie.&nbsp;

During this decade, the digital data universe is expected to grow 75-fold from 1.2 zettabytes to 90 zettabytes. (1 zettabyte = 1 trillion gigabytes).Ask any CEO how he expects to sell more products and cut more costs and he will tell you that Big Data features prominently in his strategy. Big Data refers to the technology processes by which companies can profit from the large amounts of data to which they have access.But investors who want to ride the Big Data wave are finding that it is not that easy to identify where to invest.In this report, we delve deep down into the Big Data supply chain and look at where the investment opportunities really lie.&nbsp;

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Telefónica evaluating 1&amp;1 takeover; tight float (UI 80.8%, Rentrop 4.5%). Our synergy DCF supports €26–€30/sh takeout (sweet spot €28–€29). Downside €19–€20; October 21, €21.80.</li>
<li>Probability-Weighted fair value: €23.83/sh (45% at €28.5, 55% at €20.0). Phase-II timeline 9–12 months; PW IRR +12.6% (9m) to +9.3% (12m), ex-fees/hedging.</li>
<li>Hedge long 1U1 with EU telco basket or DAX; O2 Deutschland short impractical (TEF owns ~96.85%). Key risks: heavy remedies, execution slippage, deal pivot to cooperation-only.</li>
</ul>


Telefónica evaluating 1&amp;1 takeover; tight float (UI 80.8%, Rentrop 4.5%). Our synergy DCF supports €26–€30/sh takeout (sweet spot €28–€29). Downside €19–€20; October 21, €21.80.
Probability-Weighted fair value: €23.83/sh (45% at €28.5, 55% at €20.0). Phase-II timeline 9–12 months; PW IRR +12.6% (9m) to +9.3% (12m), ex-fees/hedging.
Hedge long 1U1 with EU telco basket or DAX; O2 Deutschland short impractical (TEF owns ~96.85%). Key risks: heavy remedies, execution slippage, deal pivot to cooperation-only.


1&1: Telefónica Circling Germany’s #4 Mobile—tight Float, Heavy Remedies, Real Synergies

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Keisei Electric Railway Co / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> places out 1% of <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>, but rejects lowering its stake to 15%.  That is the end of the near-term catalyst.</li>
<li>
<a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a> popped after property cooling measures were scrapped. Then gave those gains back. And then some, and is now trading at 0.11x P/B, its lowest-ever level.</li>
<li>The spreads for  both <a href="https://www.smartkarma.com/entities/alumina-ltd" target="_blank" data-smartkarma-citation="entities:939:1" rel="noopener">Alumina Ltd (AWC AU) </a> and <a href="https://www.smartkarma.com/entities/azure-minerals-ltd" target="_blank" data-smartkarma-citation="entities:16538:1" rel="noopener">Azure Minerals (AZS AU)</a> are trading wide; both potentially FIRB-related.</li>
</ul>



Keisei Electric Railway Co (9009 JP) places out 1% of Oriental Land (4661 JP), but rejects lowering its stake to 15%.  That is the end of the near-term catalyst.

New World Development (17 HK) popped after property cooling measures were scrapped. Then gave those gains back. And then some, and is now trading at 0.11x P/B, its lowest-ever level.
The spreads for  both Alumina Ltd (AWC AU)  and Azure Minerals (AZS AU) are trading wide; both potentially FIRB-related.


Last Week in Event SPACE: Keisei Electric, New World Development, Alumina Ltd, Azure Minerals, TDCX

Telefonica Deutschland Holding / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/telefonica-sa" target="_blank" data-smartkarma-citation="entities:21299:1" rel="noopener">Telefonica SA (TEF SM)</a> has decided to make a €2.35/share cash takeover offer to acquire the 5.65% stake in its German unit <a href="https://www.smartkarma.com/entities/telefonica-deutschland-holding" target="_blank" data-smartkarma-citation="entities:21687:1" rel="noopener">Telefonica Deutschland Holding (O2D GR)</a> that it does not own. </li>
<li>The bidder and parent company, Telefonica, have informed Telefonica Deutschland that, except for FY 2023 dividend, they do not plan to support the distribution of dividends for future financial years.</li>
<li>The Bidder will apply for delisting thus the shares will soon become illiquid. Accept offer.</li>
</ul>



Telefonica SA (TEF SM) has decided to make a €2.35/share cash takeover offer to acquire the 5.65% stake in its German unit Telefonica Deutschland Holding (O2D GR) that it does not own. 
The bidder and parent company, Telefonica, have informed Telefonica Deutschland that, except for FY 2023 dividend, they do not plan to support the distribution of dividends for future financial years.
The Bidder will apply for delisting thus the shares will soon become illiquid. Accept offer.


Telefonica/Telefonica Deutschland Holding AG: Delisting Offer

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Index Rebalance

Vitesco Technologies Group / Index Rebalance

<ul>
<li>In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the March 2024 index rebal event.</li>
<li>The official index changes for the March 2024 review could be announced after the close of 5th March 2024.</li>
<li>I currently do not see any changes for the DAX index but there could be one change for the MDAX index.</li>
</ul>


In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the March 2024 index rebal event.
The official index changes for the March 2024 review could be announced after the close of 5th March 2024.
I currently do not see any changes for the DAX index but there could be one change for the MDAX index.


Quiddity Leaderboard DAX/MDAX Mar 24: M&A Candidates Morphosys and Vitesco Could Face Index Flows

Germany

Telefonica Deutschland Holding AG provides telecommunications services in Germany. The Company offers fixed-line and mobile telephone, Internet, and data transmission services to residential and corporate customers.

Price Gauge
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Telefonica Deutschland Holding (O2D GR)

Big Data as an Investment Theme

During this decade, the digital data universe is expected to grow 75-fold from 1.2 zettabytes to 90 zettabytes. (1 zettabyte = 1 trillion...

CM Research

1&1: Telefónica Circling Germany’s #4 Mobile—tight Float, Heavy Remedies, Real Synergies

Telefónica may bid for 1&1. Tight float, scarce borrow. Synergy-backed takeout €26–€30/sh (sweet spot €28–€29). PFV €23.83; Phase-II 9–12m implies...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Keisei Electric, New World Development, Alumina Ltd, Azure Minerals, TDCX

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Telefonica/Telefonica Deutschland Holding AG: Delisting Offer

Telefonica SA offers €2.35/share to acquire remaining stake in Telefonica Deutschland Holding, plans to delist shares and halt future dividends....

Jesus Rodriguez Aguilar

Quiddity Leaderboard DAX/MDAX Mar 24: M&A Candidates Morphosys and Vitesco Could Face Index Flows

I expect Vitesco Technologies Group (VTSC GR) to trigger the fast exit rule and get deleted from the MDAX index and MorphoSys AG (MOR GR) could get...

Janaghan Jeyakumar, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Big Data as an Investment Theme

During this decade, the digital data universe is expected to grow 75-fold from 1.2 zettabytes to 90 zettabytes. (1 zettabyte = 1 trillion...

CM Research

1&1: Telefónica Circling Germany’s #4 Mobile—tight Float, Heavy Remedies, Real Synergies

Telefónica may bid for 1&1. Tight float, scarce borrow. Synergy-backed takeout €26–€30/sh (sweet spot €28–€29). PFV €23.83; Phase-II 9–12m implies...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Keisei Electric, New World Development, Alumina Ltd, Azure Minerals, TDCX

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Telefonica/Telefonica Deutschland Holding AG: Delisting Offer

​Telefonica SA offers €2.35/share to acquire remaining stake in Telefonica Deutschland Holding, plans to delist shares and halt future dividends....

Jesus Rodriguez Aguilar

Quiddity Leaderboard DAX/MDAX Mar 24: M&A Candidates Morphosys and Vitesco Could Face Index Flows

I expect Vitesco Technologies Group (VTSC GR) to trigger the fast exit rule and get deleted from the MDAX index and MorphoSys AG (MOR GR) could get...

Janaghan Jeyakumar, CFA

Telefonica SA offers €2.35/share to acquire remaining stake in Telefonica Deutschland Holding, plans to delist shares and halt future dividends....