High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Thematic (Sector/Industry)

<ul><li>2023- Coming in With An Open Mind After an ugly 2022, it’s important to “clear the decks” and keep an open mind to what may or may not be working for 2023.</li><li>Coming into this year, there is tremendous clamoring over recession fears given weakness in forward looking leading economic indicators, CEO/CFO surveys, and business media talking heads.</li><li>As an investor, remaining open to different ideas, scenarios, and sectors is important as to not get tethered to siloed thinking.</li></ul>

2023- Coming in With An Open Mind After an ugly 2022, it’s important to “clear the decks” and keep an open mind to what may or may not be working for 2023.Coming into this year, there is tremendous clamoring over recession fears given weakness in forward looking leading economic indicators, CEO/CFO surveys, and business media talking heads.As an investor, remaining open to different ideas, scenarios, and sectors is important as to not get tethered to siloed thinking.

Research from Superfluous Value, Superfluous Value

Superfluous Value

Research from Superfluous Value

Stock selection has rarely been as important as it is today. After a roaring decade for US markets and with signs of mania everywhere, the S&P 500 as over-priced as it has ever been.

But, there is better way. Superfluous Value is a contrarian, deep-dive into the markets forgotten by the 60/40 instos and indexing, momentum chasers. Where the hot money has long moved on, it leaves behind investments offering great safety and prospective returns.

I believe the 2020s will look diametrically opposite to the recent past, with Emerging Markets, the UK, Japan and commodities set to rip and I intend to be holding the best opportunities available as they do.

Please feel free to come along on the journey.

Contrarian Deep-Dive into the Markets

<ul><li>Just a short pre-Christmas note today. A number of market pundits have been giving the all clear to jump back in the pool now that crypto has been nuked and Peleton et al are down 80%+.</li><li>Yes, those were bubbles of the more ridiculous variety, but the S&amp;P 500 is still dangerously expensive and growth stocks are not the sole reason.</li><li>Under the hood, the index is stuffed with mature industrial and consumer businesses still trading well above their historical norms.</li></ul>

Just a short pre-Christmas note today. A number of market pundits have been giving the all clear to jump back in the pool now that crypto has been nuked and Peleton et al are down 80%+.Yes, those were bubbles of the more ridiculous variety, but the S&amp;P 500 is still dangerously expensive and growth stocks are not the sole reason.Under the hood, the index is stuffed with mature industrial and consumer businesses still trading well above their historical norms.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Credit

<ul>
<li>The TransDigm Group is a leading airline component manufacturer across the globe and has a monopolistic position in the markets in which it operates.</li>
<li>The company has had a strong financial performance in 2022 so far and the management is encouraged by the trends in air traffic and the continued recovery in the commercial aerospace market.</li>
<li>Although their results have improved, they are still negatively impacted compared to pre-pandemic levels due to the ongoing decline in air travel demand.</li>
</ul>


The TransDigm Group is a leading airline component manufacturer across the globe and has a monopolistic position in the markets in which it operates.
The company has had a strong financial performance in 2022 so far and the management is encouraged by the trends in air traffic and the continued recovery in the commercial aerospace market.
Although their results have improved, they are still negatively impacted compared to pre-pandemic levels due to the ongoing decline in air travel demand.


TransDigm Group Incorporated: Detailed Credit Analysis & Financial Strength Evaluation Report

Equity Bottom-Up

<ul>
<li>This is our first report on airline component manufacturer, TransDigm.</li>
<li>The company has a monopolistic position in its domain and had a solid quarter with an all-around beat.</li>
<li>The management is encouraged by the trends in air traffic and the continued recovery in the commercial aerospace market.</li>
</ul>


This is our first report on airline component manufacturer, TransDigm.
The company has a monopolistic position in its domain and had a solid quarter with an all-around beat.
The management is encouraged by the trends in air traffic and the continued recovery in the commercial aerospace market.


TransDigm Group Incorporated: Initiation of Coverage – The DART Aerospace Acquisition

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On October 28, <a href="https://www.smartkarma.com/entities/meggitt-plc" target="_blank" data-smartkarma-citation="entities:22044:1" rel="noopener">Meggitt PLC (MGGT LN)</a> published Q3 trading update and downgraded guidance for FY 2021: it expects FY 2021 organic revenue to be 5% below FY 2020 on an organic basis (FY 2020 revenue was £1.68 billion), due to supply chain disruption and softer defence trends. Meggitt added that it expects underlying operating profit of between £170 million and £190 million (vs. £192 million in FY 2020).
The UK government ordered a probe into the takeover offer on national security grounds. The CMA is required to investigate the proposed transaction and report to the Secretary of State by March 18, 2022. Meggitt looks forward to engaging constructively with the CMA on its review. In mid-August, the Secretary of State ordered a similar probe into the takeover of <a href="https://www.smartkarma.com/entities/ultra-electronics-holdings-plc" target="_blank" data-smartkarma-citation="entities:22196:1" rel="noopener">Ultra Electronics Holdings (ULE LN)</a> by Cobham, and gave the CMA until January 18, 2022 to investigate the proposed deal.
<a href="https://www.smartkarma.com/entities/parker-hannifin-corp" target="_blank" data-smartkarma-citation="entities:6289:1" rel="noopener">Parker Hannifin (PH US)</a> is an industrial buyer, and does not intend to dismantle Meggitt as it has happened with Cobham (Cobham was quickly dismantled after the takeover by Advent).
Boris is seeking allies beyond the EU, so I do not think the UK Government will block a deal from an American company with committed financing. Rather the Government will ask for guarantees that jobs/technology/manufacturing stay within the UK. With committed deal financing and almost sure green light from the UK Government, there are high chances that this deal will complete.
Meggitt currently trades at 18.8x EV/Fwd EBITDA (vs. the 10.3x median of comparables, source: Capital IQ consensus) and 3.4% FCF yield reflecting the bid premium. The spread is relentlessly tightening.
Gross spread is 6.2% for a deal that can take up to a year to close (and quite possibly 6-9 months). Recommendation is long MGGT LN, TP is 800p as per the Parker-Hannifin offer.

On October 28, Meggitt PLC (MGGT LN) published Q3 trading update and downgraded guidance for FY 2021: it expects FY 2021 organic revenue to be 5% below FY 2020 on an organic basis (FY 2020 revenue was £1.68 billion), due to supply chain disruption and softer defence trends. Meggitt added that it expects underlying operating profit of between £170 million and £190 million (vs. £192 million in FY 2020).
The UK government ordered a probe into the takeover offer on national security grounds. The CMA is required to investigate the proposed transaction and report to the Secretary of State by March 18, 2022. Meggitt looks forward to engaging constructively with the CMA on its review. In mid-August, the Secretary of State ordered a similar probe into the takeover of Ultra Electronics Holdings (ULE LN) by Cobham, and gave the CMA until January 18, 2022 to investigate the proposed deal.
Parker Hannifin (PH US) is an industrial buyer, and does not intend to dismantle Meggitt as it has happened with Cobham (Cobham was quickly dismantled after the takeover by Advent).
Boris is seeking allies beyond the EU, so I do not think the UK Government will block a deal from an American company with committed financing. Rather the Government will ask for guarantees that jobs/technology/manufacturing stay within the UK. With committed deal financing and almost sure green light from the UK Government, there are high chances that this deal will complete.
Meggitt currently trades at 18.8x EV/Fwd EBITDA (vs. the 10.3x median of comparables, source: Capital IQ consensus) and 3.4% FCF yield reflecting the bid premium. The spread is relentlessly tightening.
Gross spread is 6.2% for a deal that can take up to a year to close (and quite possibly 6-9 months). Recommendation is long MGGT LN, TP is 800p as per the Parker-Hannifin offer.

Parker-Hannifin/Meggitt: Update and Spread

United States

TransDigm Group, Inc., through subsidiaries, manufactures aircraft components. The Company produces ignition systems and components, gear pumps, mechanical/electromechanical actuators and controls, NiCad batteries/chargers, power conditioning devices, hold-open rods and locking devices, engineered connectors and latches, cockpit security devices, and AC/DC electric motors.

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Transdigm Group (TDG US)

Weekly Stock Bullfinder - Week of 1/16

2023- Coming in With An Open Mind After an ugly 2022, it’s important to “clear the decks” and keep an open mind to what may or may not be working...

Weekly Stock Bull Finder

The Bubble Isn't Where You Think It Is

A number of market pundits have been giving the all clear to jump back in the pool now that crypto has been nuked and Peleton et al are down 80%+.

Superfluous Value

TransDigm Group Incorporated: Detailed Credit Analysis & Financial Strength Evaluation Report

The TransDigm Group is a leading airline component manufacturer across the globe and has a monopolistic position in the markets in which it...

Baptista Research

TransDigm Group Incorporated: Initiation of Coverage – The DART Aerospace Acquisition

This is our first report on airline component manufacturer, TransDigm. The company has a monopolistic position in its domain and had a solid...

Baptista Research

Parker-Hannifin/Meggitt: Update and Spread

6.2% gross spread for a deal very likely to complete. TP is 800p. Meggitt currently trades at 18.8x EV/Fwd EBITDA (vs. the 10.3x median of...

Jesus Rodriguez Aguilar

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