All Posts By

Smartkarma Daily Briefs

Daily Brief Event-Driven: The October TOPIX FFW Review and Shinsei Bank (8303)’s Future Float and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • The October TOPIX FFW Review and Shinsei Bank (8303)’s Future Float
  • Tencent Investee Selldown – The US$120bn Global Overhang
  • Jinke Smart (9666 HK)’s Low-Balled But Virtually Unconditional Offer
  • SET50 Index: Market Consultation & DTAC/TRUE Merger Impact
  • About A Gajillion Yen of Index Flows At the Close
  • Swire B Vs A – Surprising on Regs, Surprising on Risk; Short-Tm Displacement Now in 99th Percentile
  • Jinke Smart’s VGO of HK$12.00 from Boyu Capital
  • MACA’s A$1.075 Offer from Theiss Declared Unconditional
  • STOXX Europe Quiddity Leaderboard Dec 22: Five Intra-Review Changes, Porsche Leading The Race
  • Lotte Chemical Close to Acquiring Iljin Materials

The October TOPIX FFW Review and Shinsei Bank (8303)’s Future Float

By Travis Lundy

  • This is a hybrid insight on the upcoming TOPIX FFW Review to be announced 7 October, and the situation around Shinsei Bank (8303 JP)
  • Shinsei Bank is in “limbo” post control-acquisition by SBI Holdings (8473 JP) and an attempt to go over 50% should be in the works. When is not known.
  • The TOPIX FFW Review should see ¥2.0-2.2trln of one-way flow, and amongst that flow, a large sell on Shinsei to increase Real World Float by 60+% and 25d of ADV.

Tencent Investee Selldown – The US$120bn Global Overhang

By Sumeet Singh

  • Multiple new agencies have been reporting that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. 
  • The reports have been coming in since the second half of the year and the company has been duly denying these rumors.
  • In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.

Jinke Smart (9666 HK)’s Low-Balled But Virtually Unconditional Offer

By David Blennerhassett

  • PRC-Incorporated property management play Jinke Smart Services (9666 HK) has announced a voluntary cash offer at HK$12/share, a 33.04% premium to last close.
  • The Offeror (Boyu) and concert parties collectively hold more than 50%. The Offer is contingent on regulatory approvals and 7.71% of shares out tendering. The tendering condition can be waived.
  • The Offer appears geared to bring Boyu’s stake in line with Jinke Property Group (000656 CH)‘s. 

SET50 Index: Market Consultation & DTAC/TRUE Merger Impact

By Brian Freitas

  • The SET has commenced a market consultation on lowering the turnover ratio level from 5% to 2% while selecting stocks to be added to and deleted from the SET50 INDEX.
  • The change to the turnover ratio level could lead to three changes in December that result in one-way turnover of 7.44% and in a one-way trade of THB 6.79bn.
  • Separately, the Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) merger could result in an ad hoc inclusion prior to the regular rebalance in December.

About A Gajillion Yen of Index Flows At the Close

By Travis Lundy

  • Today is a day which happens twice a year in Japan.
  • It is Day Before Divs Go Ex- Day. Which theoretically means a fair bit of buying. 
  • Nikkei 225 is pretty neutral. But there is a Nikkei 225 buy of Nidec Corp (6594 JP). TOPIX and other float market cap indices are a buy on the close.

Swire B Vs A – Surprising on Regs, Surprising on Risk; Short-Tm Displacement Now in 99th Percentile

By Travis Lundy

  • The Swire buyback has been impressive. In 27 trading days they have bought back 26.8% of teh HK$4bn promised. In that period, participation has been aggressive.
  • Swire has bought back As at a pace of 52% of pre-buyback one-year ADV. For Bs, it has been 105%. But Bs have dramatically underperformed As on “HK Re-opening” trades.
  • Historically, when B/A gets more than 6% from 3mo Avg VWAP Ratio, there is statistically significant reversion. We are now at 6.8%. I’d buy B vs A.

Jinke Smart’s VGO of HK$12.00 from Boyu Capital

By Arun George

  • Jinke Smart Services (9666 HK) announced a voluntary conditional general offer from Boyu Capital at HK$12.00 per share, a 33.0% premium to the undisturbed price.
  • The offer is conditional on 7.71% valid acceptances (such that Boyu represents 30.40% of outstanding shares) and anti-trust approval. The conditions can be waived.  
  • The offer is designed to flush out minorities unwilling to wait for the industry headwinds to dissipate. A low threshold suggests that the offer will be declared unconditional.

MACA’s A$1.075 Offer from Theiss Declared Unconditional

By Arun George

  • Theiss’ offer of A$1.075 per share for MACA Ltd (MLD AU) has been declared unconditional despite acquiring 44.30% of outstanding shares, below the 50% threshold.
  • The offer has met with resistance from retail shareholders as it remains below NRW’s rejected offer, and there is a lack of clarity on franking credits. 
  • Thiess can restart on-market purchases from 27 September. The offer closes on 7 October. The shares are trading in line with the offer.

STOXX Europe Quiddity Leaderboard Dec 22: Five Intra-Review Changes, Porsche Leading The Race

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EuroSTOXX Indices for the December 2022 Rebalance.
  • There could be five M&A-related intra-review deletions between now and the end of the year.
  • There could be more index changes in the December 2022 Rebalance too. 

Lotte Chemical Close to Acquiring Iljin Materials

By Douglas Kim

  • On 27 September, it was announced that Lotte Chemical (011170 KS) is close to acquiring a 53.3% stake in Iljin Materials (020150 KS) for about 2.7 trillion won (US$1.9 billion).
  • Iljin Materials has relatively high valuation multiples. Despite recent share price decline, its shares are trading at 32.4x P/E and 15.7x EV/EBITDA in 2022. 
  • At such a high valuation premium (93% higher than current prices), there are going to be significant concerns that Lotte Chem may have overpaid for this acquisition. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief Equity Bottom-Up: Indiamart Intermesh Ltd- Forensic Analysis and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Indiamart Intermesh Ltd- Forensic Analysis
  • Tencent Increases Its Investment in Medical and Healthcare
  • GMO Q2 2022 Quarterly Letter
  • Nintendo (7974) | Beware of Cycles
  • Nanya Tech: Valuation Backtest Implies Upside, Potential Catalyst Thursday
  • Rakuten: Two Consecutive Quarters of Narrowing Mobile Losses Could Change Price Momentum
  • Mitra Adiperkasa (MAPI IJ) – Universally Retail
  • Vipshop: Rebound in Chinese Apparel Sales Should Trump Conservative Management Guidance
  • Summers Value Partners Q2 2022 Investor Letter
  • Caregen (214370 KS): Business Recovery Backed by Strong Global Demand; New Products Brighten Outlook

Indiamart Intermesh Ltd- Forensic Analysis

By Nitin Mangal

  • IndiaMart (INMART IN)‘s annual report analysis highlights some of the issues that should not be overlooked.
  • In addition to changes in important disclosures, the company still continues to see less flow-through of deferred income into revenues.
  • On the assets side, it should be noted that the strategic investments are yet to show any promise, while fixed assets show some concerns including non-verification, disposals, etc.

Tencent Increases Its Investment in Medical and Healthcare

By Shifara Samsudeen, ACMA, CGMA

  • Tencent known to outspend its peers on strategic investments, has made only around 80 investments and acquisitions so far this year compared to more than 200 deals done in 2021.
  • Tencent’s vast investment portfolio has attracted regulatory scrutiny and it’s the market’s belief that Tencent was asked to divest some of its stake in other leading tech players in China.
  • However, over the last few months, Tencent has been increasingly investing on companies operating in the medical field.

GMO Q2 2022 Quarterly Letter

By Fund Newsletters

  • Equity investors in countries with overvalued currencies have two ways to lose and those with undervalued currencies have two ways to win.
  • Today’s strong USD looks, in the end, to be our currency and our problem.
  • Keep an eye out for dangerously destructive economic policies, but don’t use that as an excuse to avoid the asset class entirely.
  • The yen and euro are at their cheapest levels in decades and hedging emerging market equities would be an expensive proposition even if the currencies weren’t generally cheap versus the USD.

Nintendo (7974) | Beware of Cycles

By Mark Chadwick

  • Nintendo’s stocked recently popped on two positive developments – Splatoon 3 sales set a record for a Switch game & Nintendo Direct announced the release date of Legend of Zelda
  • Switch life cycle is coming to an end.  The cycle had been extended by Covid and supply issues for Sony PS5
  • Nintendo’s stock is cheap, defensive and pays a reasonable dividend, but catalysts are running out and the stock will likely follow revenues lower

Nanya Tech: Valuation Backtest Implies Upside, Potential Catalyst Thursday

By Vincent Fernando, CFA

  • We estimate that Nanya Technology has the highest level of net cash as a percent of its market cap in its history and it is trading well below 1x PBV.
  • The median 6-month total shareholder return has been 40.5% for instances since 2012 when Nanya Tech has traded below 1.0x PBV.
  • Micron’s results this Thursday will provide color on Nanya’s outlook and could be a catalyst.

Rakuten: Two Consecutive Quarters of Narrowing Mobile Losses Could Change Price Momentum

By Oshadhi Kumarasiri

  • Rakuten’s Mobile losses have held back its share price over the last few years, but it is finally starting to show some improvements with costs shrinking sequentially in 2QFY22.
  • However, most investors seem to have overlooked this QoQ drop thinking that it is driven by the impact of seasonality.
  • With the loss of subscribers in the previous quarter seeming temporary, we are expecting revenue growth through ARPU expansion to more than offset Rakuten Inc (4755 JP) Mobile’s cost growth.

Mitra Adiperkasa (MAPI IJ) – Universally Retail

By Angus Mackintosh

  • Mitra Adiperkasa (MAPI IJ) has proved itself with flying colours during the pandemic and continues to do so as mobility resumes, with offline sales recovering but digital remaining firm. 
  • The company continues to build out its newer brands such as Boots, Footlocker, Sketchers,  DigiMAP, and Lego, with 161 store openings in 1H2022 and more to come in 2H2022.
  • Mitra Adiperkasa is starting to ramp up its regional presence in Vietnam and the Philippines especially, which represents a future growth driver. Valuations are attractive despite the recent run up. 

Vipshop: Rebound in Chinese Apparel Sales Should Trump Conservative Management Guidance

By Wium Malan, CFA

  • Following a contraction in Chinese apparel sales since 3Q21, and similar negative GMV and product revenue growth for Vipshop, we have witnessed a recovery to growth since June.
  • Current sell-side forecasts are, however, still for a -10.8%y/y contraction in product revenue for Vipshop in 3Q22f, followed by a -4.4% contraction in 4Q22f which seems overly pessimistic.
  • Given the conservative nature of near-term top-line growth expectation, and management guidance, the probability for positive earnings surprise seems high.

Summers Value Partners Q2 2022 Investor Letter

By Fund Newsletters

  • Summers Value Partners is a boutique value manager that uses a focused, long-term approach to investing in areas of the market where most managers are unwilling or unable to participate.
  • The Summers Value Fund LP (“the Fund”) returned -25.9% net in the first half of 2022.
  • The majority of our decline took place in the first quarter as we were too slow to react to the Fed’s decision to increase interest rates and shrink its balance sheet to cool the over-heated economy.
  • The next stage of the bear market will most likely involve lower corporate earnings due to a more challenging businessclimate and reducedaccess to capital.

Caregen (214370 KS): Business Recovery Backed by Strong Global Demand; New Products Brighten Outlook

By Tina Banerjee

  • Caregen Co Ltd (214370 KS) is a niche biotech company, with focus on biomimetic peptide-based cosmeceuticals and medical devices targeting anti-aging industry. The company has a large addressable market opportunity.  
  • Despite the negative impact from the re-spread of COVID-19, Caregen reported 4% y/y growth in total revenue in H1 2022, with operating profit margin expanding 260bps.
  • Caregen’s COVID-19 nasal spray is in phase 1 trial. FDA has registered Caregen’s health functional food to control blood sugar as a new dietary ingredient (NDI).

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief Macro: North America Hits New Highs as Global Rotation Continues and more

By | Daily Briefs, Macro

In today’s briefing:

  • North America Hits New Highs as Global Rotation Continues
  • CX Daily: The Heated Fight Against Facial Recognition Scams
  • BoE: Waiting for Broken Markets to Heal
  • Commodities, Politics, and Mispriced Securities in Emerging Markets

North America Hits New Highs as Global Rotation Continues

By Steven Holden

  • North American allocations continue to trend higher, hitting a record average weight of 58.1% across the 358 global funds in our analysis
  • North America has consistently stolen market share from other key global regions, most notably Developed Market Europe, where average fund weights have hit all-time lows of 24.24%
  • Sectors driving allocations higher are led by Energy, Health Care and Industrials with active rotation in to all 3, whilst Consumer Staples have seen signs of investor fatigue.

CX Daily: The Heated Fight Against Facial Recognition Scams

By Caixin Global

  • Cover Story: The heated fight against facial recognition scams

  • China foreign minister urges U.S. to clearly denounce Taiwan separatist activities

  • Chinese mainland students are flocking back to Hong Kong universities


BoE: Waiting for Broken Markets to Heal

By Phil Rush

  • Markets puked after the new UK government announced its fiscal plans, and panic ensued. Sterling and rates remain at historically extreme levels.
  • Rate rises are more than offsetting the inflationary effect of GBP devaluation, which suggests the BoE need not match hawkish pricing unless neutral rates have surged.
  • We struggle to see the BoE massively exceeding the Fed’s tightening pace and extent. Contrarian trades are tough, but that is arguably why the current spread exists.

Commodities, Politics, and Mispriced Securities in Emerging Markets

By Dylan Waller

  • Commodity price gyrations and political black swan events will shape frontier and emerging equity markets during the next few years.
  • 2022-2023 are the best years to selectively shop for attractive narratives, as normalization in commodity prices and geopolitical tensions is necessary in order to adopt a holistic bullish view of emerging market equities.
  • If equity valuations move towards Post 2008 levels, then emerging market equities could be one of the most attractive buys of this decade by 2024 or later.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief South Korea: Top Material, Lotte Chemical, DB Hitek Co., Ltd., Caregen Co Ltd and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Top Material IPO Valuation Analysis
  • Lotte Chemical Close to Acquiring Iljin Materials
  • Minority Shareholders Convince DB Hitek to Stop a Company Split
  • Caregen (214370 KS): Business Recovery Backed by Strong Global Demand; New Products Brighten Outlook

Top Material IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Top Material (360070 KS) is a target price of 37,965 won per share, which is 33% higher than the mid-point of the IPO price range. 
  • Given the solid upside, we have a Positive view of the IPO. Our base case valuation is based on 25.6x P/E using our estimated net profit in 2022. 
  • We estimate the company to generate sales of 73.7 billion won (up 131.1% YoY) and operating profit of 14.1 billion won (up 190.3% YoY) in 2022.

Lotte Chemical Close to Acquiring Iljin Materials

By Douglas Kim

  • On 27 September, it was announced that Lotte Chemical (011170 KS) is close to acquiring a 53.3% stake in Iljin Materials (020150 KS) for about 2.7 trillion won (US$1.9 billion).
  • Iljin Materials has relatively high valuation multiples. Despite recent share price decline, its shares are trading at 32.4x P/E and 15.7x EV/EBITDA in 2022. 
  • At such a high valuation premium (93% higher than current prices), there are going to be significant concerns that Lotte Chem may have overpaid for this acquisition. 

Minority Shareholders Convince DB Hitek to Stop a Company Split

By Douglas Kim

  • On 26 September, DB Hitek Co., Ltd. (000990 KS) announced that it will stop the proposed split-off of its semiconductor design business. 
  • This move to stop the company split comes after numerous minority shareholders banded together to stop this move which could have a negative impact on DB Hitek. 
  • Overall, we believe DB Hitek’s decision to stop the company split driven by the campaigns from the minority shareholders is likely to have a positive impact on the company.

Caregen (214370 KS): Business Recovery Backed by Strong Global Demand; New Products Brighten Outlook

By Tina Banerjee

  • Caregen Co Ltd (214370 KS) is a niche biotech company, with focus on biomimetic peptide-based cosmeceuticals and medical devices targeting anti-aging industry. The company has a large addressable market opportunity.  
  • Despite the negative impact from the re-spread of COVID-19, Caregen reported 4% y/y growth in total revenue in H1 2022, with operating profit margin expanding 260bps.
  • Caregen’s COVID-19 nasal spray is in phase 1 trial. FDA has registered Caregen’s health functional food to control blood sugar as a new dietary ingredient (NDI).

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief Australia: MACA Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • MACA’s A$1.075 Offer from Theiss Declared Unconditional
  • MACA: Thiess Declares Offer Unconditional

MACA’s A$1.075 Offer from Theiss Declared Unconditional

By Arun George

  • Theiss’ offer of A$1.075 per share for MACA Ltd (MLD AU) has been declared unconditional despite acquiring 44.30% of outstanding shares, below the 50% threshold.
  • The offer has met with resistance from retail shareholders as it remains below NRW’s rejected offer, and there is a lack of clarity on franking credits. 
  • Thiess can restart on-market purchases from 27 September. The offer closes on 7 October. The shares are trading in line with the offer.

MACA: Thiess Declares Offer Unconditional

By David Blennerhassett

  • Diversified contractor MACA Ltd (MLD AU) announced a friendly off-market cash offer from fellow contractor Thiess on the 26 July, at A$1.025/share, a 28.1% premium to the undisturbed price.  
  • After MACA rejected NRW Holdings (NWH AU)‘s non-binding proposal (with an implied consideration of $1.085/share), Thiess lifted its all-cash Offer to A$1.075/share. NRW subsequently walked.
  • The Offer was conditional on Thiess having a relevant interest in more than 90% of MACA. That condition has been waived and the Offer is now Unconditional.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief Singapore: QT Vascular Ltd and more

By | Daily Briefs, Singapore

In today’s briefing:

  • 10 in 10 with Quantum Healthcare – Transformed for Future-Resiliency

10 in 10 with Quantum Healthcare – Transformed for Future-Resiliency

By Geoff Howie

10 in 10 with Quantum Healthcare – Transformed for Future-Resiliency

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief Thailand: Delta Electronics Thai and more

By | Daily Briefs, Thailand

In today’s briefing:

  • SET50 Index: Market Consultation & DTAC/TRUE Merger Impact

SET50 Index: Market Consultation & DTAC/TRUE Merger Impact

By Brian Freitas

  • The SET has commenced a market consultation on lowering the turnover ratio level from 5% to 2% while selecting stocks to be added to and deleted from the SET50 INDEX.
  • The change to the turnover ratio level could lead to three changes in December that result in one-way turnover of 7.44% and in a one-way trade of THB 6.79bn.
  • Separately, the Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) merger could result in an ad hoc inclusion prior to the regular rebalance in December.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief India: IndiaMart and more

By | Daily Briefs, India

In today’s briefing:

  • Indiamart Intermesh Ltd- Forensic Analysis

Indiamart Intermesh Ltd- Forensic Analysis

By Nitin Mangal

  • IndiaMart (INMART IN)‘s annual report analysis highlights some of the issues that should not be overlooked.
  • In addition to changes in important disclosures, the company still continues to see less flow-through of deferred income into revenues.
  • On the assets side, it should be noted that the strategic investments are yet to show any promise, while fixed assets show some concerns including non-verification, disposals, etc.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief Indonesia: Mitra Adiperkasa and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Mitra Adiperkasa (MAPI IJ) – Universally Retail

Mitra Adiperkasa (MAPI IJ) – Universally Retail

By Angus Mackintosh

  • Mitra Adiperkasa (MAPI IJ) has proved itself with flying colours during the pandemic and continues to do so as mobility resumes, with offline sales recovering but digital remaining firm. 
  • The company continues to build out its newer brands such as Boots, Footlocker, Sketchers,  DigiMAP, and Lego, with 161 store openings in 1H2022 and more to come in 2H2022.
  • Mitra Adiperkasa is starting to ramp up its regional presence in Vietnam and the Philippines especially, which represents a future growth driver. Valuations are attractive despite the recent run up. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief United States: Nasdaq-100 Stock Index, US Dollar Index, Crude Oil, iShares Micro-Cap ETF, Tesla Motors, Liberty Global Plc Lilac Class C, Omnicom Group, Ringcentral Inc Class A, Alteryx Inc, Waste Management and more

By | Daily Briefs, United States

In today’s briefing:

  • Risk Pivots and Color into Late September
  • GMO Q2 2022 Quarterly Letter
  • Bloomberg Commodity Index Breaks 2.5-Year Uptrend; Key Indexes/Sectors Testing Support at YTD Lows
  • Summers Value Partners Q2 2022 Investor Letter
  • Tesla’s Q3 Ests Are Fading On Weaker China Sales—Again
  • Lets Talk About LILAK
  • Omnicom Group Inc: Catering To The Gaming Market & Other Developments
  • RingCentral Inc: New Features For Remote Working Environment & Other Drivers
  • Alteryx Inc: New Alteryx Server For FIPS & Other Drivers
  • Waste Management: Recent Acquisitions & Other Drivers

Risk Pivots and Color into Late September

By Thomas Schroeder

  • Risk pivots and action points into our late September capitulation cycle with a granular look at intraday SPX, NDX and DXY wedge patterns. DJI new low leads.
  • September 27/28 cycle date with a secondary timeline in early October. Need final touches into new lows for a turn signal. 27-28 capitulation that leads to a key low.
  • Impulsive yield rise fits with a blow off yield move toward 4.19% projection with DXY to 115.40 and an SPX crack to a new low (3,530 once below 3,650).

GMO Q2 2022 Quarterly Letter

By Fund Newsletters

  • Equity investors in countries with overvalued currencies have two ways to lose and those with undervalued currencies have two ways to win.
  • Today’s strong USD looks, in the end, to be our currency and our problem.
  • Keep an eye out for dangerously destructive economic policies, but don’t use that as an excuse to avoid the asset class entirely.
  • The yen and euro are at their cheapest levels in decades and hedging emerging market equities would be an expensive proposition even if the currencies weren’t generally cheap versus the USD.

Bloomberg Commodity Index Breaks 2.5-Year Uptrend; Key Indexes/Sectors Testing Support at YTD Lows

By Joe Jasper

  • In last week’s Macro Vision report, we noted breaks below 3900 on the SPX and $293 on the QQQ opened the door for a test of YTD lows, or worse.
  • We are now getting a test of the YTD lows of 3636 on the S&P 500 and $269 on QQQ
  • With so many indexes and key Sectors currently oversold and testing support, we could certainly see a bounce/pause at current levels.

Summers Value Partners Q2 2022 Investor Letter

By Fund Newsletters

  • Summers Value Partners is a boutique value manager that uses a focused, long-term approach to investing in areas of the market where most managers are unwilling or unable to participate.
  • The Summers Value Fund LP (“the Fund”) returned -25.9% net in the first half of 2022.
  • The majority of our decline took place in the first quarter as we were too slow to react to the Fed’s decision to increase interest rates and shrink its balance sheet to cool the over-heated economy.
  • The next stage of the bear market will most likely involve lower corporate earnings due to a more challenging businessclimate and reducedaccess to capital.

Tesla’s Q3 Ests Are Fading On Weaker China Sales—Again

By Vicki Bryan

  • Market consensus on Q3 deliveries has been dropping toward my ~330,000 estimate on weaker China sales, as we saw in Q2. 
  • This time they can’t blame Covid-shutdowns—Tesla’s production is wide open.
  • Instead it looks like softer demand despite lower prices—signalling potentially more pressure ahead.

Lets Talk About LILAK

By Superfluous Value

  • LILAK has become a tragic joke among investors. During its 6-year public life, the share-price has tanked over 80% and all the way down, the faithful have been pitching it with bullet points like “Malone vehicle” and “leveraged buy-backs”.
  • While some of this was self-inflicted (the spin price was too high and the company overpaid for C&W in a sweetheart deal), much of the pain was outside management’s control and only cyclical in nature.
  • Hurricane Maria destroying Puerto Rico, Covid 19 and relentless weakening in Emerging Market currencies and sentiment can hardly be laid at their feet.

Omnicom Group Inc: Catering To The Gaming Market & Other Developments

By Baptista Research

  • Omnicom’s performance in the second quarter was good as the company delivered an all-around beat.
  • The company kept its attention on improving its current skills throughout the quarter to fulfill the demands of its clients and potential customers.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

RingCentral Inc: New Features For Remote Working Environment & Other Drivers

By Baptista Research

  • RingCentral achieved good results in Q2 and delivered an all-around beat despite being impacted by the current macro climate.
  • Its direct business and partners helped the company deliver an all-around beat.
  • In Q2, RingCentral Rooms improved with brand-new seamless interfaces with hardware partners, including Avocor, Jabra, and EPOS.

Alteryx Inc: New Alteryx Server For FIPS & Other Drivers

By Baptista Research

  • Alteryx had a strong Q2 result, exceeding Wall Street expectations in terms of both, revenues as well as earnings.
  • The company reported an ARR of $727 million, up 33% year over year, and revenue of $181 million, up 50% year over year.
  • The present market climate resonates with its value-driven sales approach, and sales execution is still excellent.

Waste Management: Recent Acquisitions & Other Drivers

By Baptista Research

  • Waste Management had remarkable organic revenue growth, driven by a collection and disposal yield of 6.2%.
  • The company continues to combat widespread inflationary cost pressures and its pricing has accelerated sequentially.
  • Overall, we give Waste Management a ‘Hold’ rating with a revised target price.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars