Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel'</a>s share price is currently down some 26% from its 52 week high, almost exactly where it was three years ago. Meanwhile, competitors <a href="https://www.smartkarma.com/entities/advanced-micro-devices-inc" target="_blank" data-smartkarma-citation="entities:19009:1" rel="noopener">Advanced Micro Devices</a> and <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA'</a>s share prices have more than doubled over the same time period. Paradoxically, demand for Intel's products has never been stronger and the company will likely deliver 5% YoY revenue growth compared to the 2% forecasted back in January. How did Intel find itself in this situation and where is the company heading from here? Here's our thoughts on the matter...

Intel's share price is currently down some 26% from its 52 week high, almost exactly where it was three years ago. Meanwhile, competitors Advanced Micro Devices and NVIDIA's share prices have more than doubled over the same time period. Paradoxically, demand for Intel's products has never been stronger and the company will likely deliver 5% YoY revenue growth compared to the 2% forecasted back in January. How did Intel find itself in this situation and where is the company heading from here? Here's our thoughts on the matter...

Intel. How Did We Get Here And Where Are We Going?

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

In December Root shares fell ~22% after insurtech unicorn reported its first quarterly earnings as a public company. As of Q3-20 GAAP net loss reached $85 million and GAAP revenue collapsed to $51 million due to changing of reinsurance structure starting July 2020. During the reported quarter ceded earned premium grew to ~$110 million, 354% YoY growth and was 71% as percentage of direct earned premium while net earned premium significantly fell to $45 million and dropped ~41% YoY. New reinsurance program caused a reduction in GAAP revenue versus prior quarters.In October 2020 Root completed its IPO and received net proceeds of $1.1 billion after deducting offering costs of ~$53 million. Car insurance company priced IPO above range at $27 per share. Now stock is trading around $15 a share and fell ~45% since IPO. We believe that worst-case scenario for Root stock may be priced in and shares have limited downside potential. Consensus estimates for 2021 revenue look pessimistic and assume YoY contraction in revenue. In our insight we will focus on key drivers and catalysts that may support shares and discuss why Root should establish partnership with automaker or EV manufacturer to grow its business and customer base going forward.

In December Root shares fell ~22% after insurtech unicorn reported its first quarterly earnings as a public company. As of Q3-20 GAAP net loss reached $85 million and GAAP revenue collapsed to $51 million due to changing of reinsurance structure starting July 2020. During the reported quarter ceded earned premium grew to ~$110 million, 354% YoY growth and was 71% as percentage of direct earned premium while net earned premium significantly fell to $45 million and dropped ~41% YoY. New reinsurance program caused a reduction in GAAP revenue versus prior quarters.In October 2020 Root completed its IPO and received net proceeds of $1.1 billion after deducting offering costs of ~$53 million. Car insurance company priced IPO above range at $27 per share. Now stock is trading around $15 a share and fell ~45% since IPO. We believe that worst-case scenario for Root stock may be priced in and shares have limited downside potential. Consensus estimates for 2021 revenue look pessimistic and assume YoY contraction in revenue. In our insight we will focus on key drivers and catalysts that may support shares and discuss why Root should establish partnership with automaker or EV manufacturer to grow its business and customer base going forward.

Root Stock Is Showing Signs Of Bottoming Out

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>The percentage of US active funds invested in Tesla has risen sharply over the course of the year.  A total of 18%, or 88 out of the 496 funds in our US analysis hold a position in Telsa.  Average fund weights across all funds is 0.42%, across Telsa holders is 2.34%.  </li>
<li>Total dollar holdings are at peak levels among the funds in our analysis, with combined AUM in <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> of $37.6bn among the 88 holders.  </li>
<li>Current holders have tended to sell in to strength this year, with $4.4bn in outflows as managers keep Telsa from dominating portfolios if left unchecked.</li>
<li>At current levels, <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> will join the ranks as one of the top underweight holdings among active US managers, currently led by <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> and <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a> .  If no further buying occurs, Tesla will likely slot in to 4th place behind <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US</a> (assuming an inclusion weight of ~1.5%).</li>
<li>We expect buying pressure from benchmark aligned funds who are currently not invested in the stock.  Estimates of $5.8bn when analysing previous index inclusions <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> and <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-b" target="_blank" data-smartkarma-citation="entities:8635:1" rel="noopener">Berkshire Hathaway Inc Cl B (BRK/B US)</a> .</li>
<li>Potential $37bn of selling from active US funds, though current holders are long-term holders and not guaranteed to sell in to the rebalance.  We see an imbalance of buying from passive funds who may need to push prices significantly higher to entice these long-term holders to sell.</li>
</ul>Analysis taken from our US research, covering 496 active US equity funds with a combined AUM of $3.4tr.


The percentage of US active funds invested in Tesla has risen sharply over the course of the year.  A total of 18%, or 88 out of the 496 funds in our US analysis hold a position in Telsa.  Average fund weights across all funds is 0.42%, across Telsa holders is 2.34%.  
Total dollar holdings are at peak levels among the funds in our analysis, with combined AUM in Tesla Motors (TSLA US) of $37.6bn among the 88 holders.  
Current holders have tended to sell in to strength this year, with $4.4bn in outflows as managers keep Telsa from dominating portfolios if left unchecked.
At current levels, Tesla Motors (TSLA US) will join the ranks as one of the top underweight holdings among active US managers, currently led by Apple Inc (AAPL US) and Microsoft Corp (MSFT US) .  If no further buying occurs, Tesla will likely slot in to 4th place behind Amazon.com Inc (AMZN US (assuming an inclusion weight of ~1.5%).
We expect buying pressure from benchmark aligned funds who are currently not invested in the stock.  Estimates of $5.8bn when analysing previous index inclusions Facebook Inc A (FB US) and Berkshire Hathaway Inc Cl B (BRK/B US) .
Potential $37bn of selling from active US funds, though current holders are long-term holders and not guaranteed to sell in to the rebalance.  We see an imbalance of buying from passive funds who may need to push prices significantly higher to entice these long-term holders to sell.
Analysis taken from our US research, covering 496 active US equity funds with a combined AUM of $3.4tr.

Tesla Inclusion.  What Will Active US Funds Do?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

The S&amp;P DJI Global Indices team <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20201211-1277389/1277389_tes15aircaivspindnkn4.pdf?force_download=true" target="_blank" rel="noopener">confirmed</a> Friday night that <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> would join the S&amp;P500 and the S&amp;P100 at the close of trading on 18 December, with <a href="https://www.smartkarma.com/entities/apartment-invt-mgmt-co-a" target="_blank" data-smartkarma-citation="entities:2193:1" rel="noopener">Apartment Invt &amp; Mgmt Co A (AIV US)</a> coming out of S&amp;P500 and its 14 December spin-out Apartment Income REIT replacing <a href="https://www.smartkarma.com/entities/dunkin-brands-group-inc" target="_blank" data-smartkarma-citation="entities:15866:1" rel="noopener">Dunkin' Brands Group (DNKN US)</a> in the S&amp;P Midcap 400, and <a href="https://www.smartkarma.com/entities/occidental-petroleum-corp" target="_blank" data-smartkarma-citation="entities:17075:1" rel="noopener">Occidental Petroleum (OXY US)</a> coming out of the S&amp;P100 but staying in the S&amp;P500. When the S&amp;P announced on the 16th of November that Tesla would be joining the S&amp;P500 in December, it said the pro-forma inclusion weight would be ~1.01% (without measuring what would come out). S&amp;P also said that it would update the pro-forma inclusion weight and trading value impact when the Deletion was announced, but they did not. My calc suggests it is 1.47% as of Friday's close. And the two-way trading value based on the S&amp;P's original US$51bn number is, as of today, ~US$152bn.Which is a lot.The arithmetic, and an explanation of why it matters, follow.

The S&amp;P DJI Global Indices team confirmed Friday night that Tesla Motors (TSLA US) would join the S&amp;P500 and the S&amp;P100 at the close of trading on 18 December, with Apartment Invt &amp; Mgmt Co A (AIV US) coming out of S&amp;P500 and its 14 December spin-out Apartment Income REIT replacing Dunkin' Brands Group (DNKN US) in the S&amp;P Midcap 400, and Occidental Petroleum (OXY US) coming out of the S&amp;P100 but staying in the S&amp;P500. When the S&amp;P announced on the 16th of November that Tesla would be joining the S&amp;P500 in December, it said the pro-forma inclusion weight would be ~1.01% (without measuring what would come out). S&amp;P also said that it would update the pro-forma inclusion weight and trading value impact when the Deletion was announced, but they did not. My calc suggests it is 1.47% as of Friday's close. And the two-way trading value based on the S&amp;P's original US$51bn number is, as of today, ~US$152bn.Which is a lot.The arithmetic, and an explanation of why it matters, follow.

Tesla Into S&P - Rebal Details, and Implications for Vol and Active Portfolio Reconstruction

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> CEO Elon Musk should be having a great week. But then the stock dropped on news the company plans to raise another $5 billion from selling stock. Then he complained to the <a href="https://www.wsj.com/articles/elon-musk-decries-m-b-a-ization-of-america-11607548589" target="_blank" rel="noopener">Wall Street Journal</a> that there were too many MBA-types paying too much attention to financial performance of companies and not enough on producing quality products.Which is very interesting because this seems to me to be exactly what Tesla does, not that it seemed to deter investors one bit from gobbling up its $5 billion secondary offering.<a href="https://www.barrons.com/articles/the-jobs-report-was-ugly-but-it-may-be-good-news-for-stocks-51607130127" target="_blank" rel="noopener">Barron's</a> noticed it too, and how much Tesla,<a href="https://www.smartkarma.com/entities/doordash-inc" target="_blank" data-smartkarma-citation="entities:28881:1" rel="noopener">DoorDash Inc (DASH US)</a>, and <a href="https://www.smartkarma.com/entities/airbnb-inc" target="_blank" data-smartkarma-citation="entities:431:1" rel="noopener">Airbnb Inc (ABNBUS)</a> and other similarly inflated deals out this week felt like 1999—and not in a good way.

Tesla Motors (TSLA US) CEO Elon Musk should be having a great week. But then the stock dropped on news the company plans to raise another $5 billion from selling stock. Then he complained to the Wall Street Journal that there were too many MBA-types paying too much attention to financial performance of companies and not enough on producing quality products.Which is very interesting because this seems to me to be exactly what Tesla does, not that it seemed to deter investors one bit from gobbling up its $5 billion secondary offering.Barron's noticed it too, and how much Tesla,DoorDash Inc (DASH US), and Airbnb Inc (ABNBUS) and other similarly inflated deals out this week felt like 1999—and not in a good way.

Barron's Weighs in On "Frenzied Pops" Like Tesla Vs Wary Skeptics Like...

United States

Tesla Inc. operates as a multinational automotive and clean energy company. The Company designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. Tesla owns its sales and service network and sells electric power train components to other automobile manufacturers.

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

Tesla (TSLA US)

Intel. How Did We Get Here And Where Are We Going?

Despite unprecedented demand for their products and record revenues, Intel's share price is bouncing off its March pandemic lows, close to where it...

William Keating

Root Stock Is Showing Signs Of Bottoming Out

Our analysis suggests that Root shares show signs of bottoming out as worst-case scenario for Root stock may be priced in and investors should...

Andrei Zakharov

Tesla Inclusion. What Will Active US Funds Do?

What are the current levels of ownership in Tesla Motors? We analyse 496 US active funds with a combined AUM of $3.4tr to find out.

Steven Holden

Tesla Into S&P - Rebal Details, and Implications for Vol and Active Portfolio Reconstruction

The TSLA S&P500 inclusion involves $150bn of direct flows and perhaps another $200-300bn indirect flows. It really is a MAMMOTH trade. And index...

Travis Lundy

Barron's Weighs in On "Frenzied Pops" Like Tesla Vs Wary Skeptics Like...

Barron's notes "frenzied" deals this week like Tesla, DoorDash, and AirBnB seem like 1999 exuberance all over again, but there also are "skilled"...

Vicki Bryan

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)