Smartkarma Daily Briefs

• Monolithic Power Systems (MPWR US) is a direct addition followed by AppLovin (APP US) which is a conditional addition but close to be direct. Demand is ~$1.8bn and ~3.5 ADV.
• Dollar Tree Inc (DLTR US) is a direct deletion with the highest exclusion probability as it is  ranked above the exit rank of 125. 
• Super Micro Computer (SMCI US) , ARM Holdings (ARM US) and Moderna (MRNA US) are amongst the prioritized constituents preventing eligible candidates from entering the index. 

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• In this insight, we take a look at the upcoming constituent changes in the run up to the December 2024 index rebal event.
• We expect two regular changes in December 2024. There are also several live spin-off and M&A events which could trigger intra-review index changes in the late-2024/early-2025.

• Intel is spinning off their foundry division into its own entity within the company, with financial independence and guardrails in place.
• The company is not selling off assets as a whole but is making strategic deals, such as a partnership with Amazon.
• A letter from Intel’s CEO to the team hints at potential activist investor issues and the company’s legal obligations in response to potential acquisition offers.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• On September 4, 2024, Fortive Corp (NYSE: FTV) announced plans to separate its Precision Technologies business into a separate publicly listed company (NewCo), via a tax-free spin-off transaction.
• NewCo, being more volatile and lower margin, versus the parent, has been a drag on the overall valuation of FTV.
• FTV (ex NewCo) will be a high recurring revenue business with strong free cash flow generation profile. We believe that FTV (ex NewCo) will command a higher multiple.

• Q3 is coming to an end and ADEA has yet to announce new licensing deals its management has been asserting would happen this year. 
• ADEA has maintained a revenue forecast of $380 million to $420 million on the expectation there would be at least two major new licenses announced this year.   
• Our earning model currently calls for ADEA to generate $400 million in revenue with the third quarter being a smaller step up in revenue compared to the fourth quarter.

• For the week ending 20/Sep, US crude inventories declined by 4.5m barrels, surpassing expectations of a 1.3m barrel drawdown. Gasoline and distillate stockpiles also decreased more than analyst estimates.
• US natural gas inventories rise 47 Bcf for the week ending 20/Sep, lower than analyst expectations of a 52 Bcf buildup. Inventories are 7.1% above the 5-year seasonal average.
• BP and Shell experienced rating downgrades and target price reductions, while TotalEnergies and Exxon Mobil saw upward revisions in their target prices.

• We are initiating coverage of Cadrenal Therapeutics, Inc. (CVKD) with a valuation of $30.00.
• Cadrenal is a clinical stage biopharmaceutical company developing tecarfarin, a novel oral and reversible anticoagulant intended to prevent deaths due to blood clots in patients with rare cardiovascular conditions, including those with left ventricular assist devices (LVADs), end-stage kidney disease (ESKD) with atrial fibrillation (AFib), and mechanical heart valves with difficult to control time in therapeutic range (TTR).
• The company will be meeting with the FDA to discuss the design of a Phase 3 clinical trial of tecarfarin in patients with LVADs. Cadrenal has also been in discussion with Abbott, the maker of the only LVAD for sale in the U.S., regarding the Phase 3 trial, which we anticipate initiating in the first half of 2025.

• ChampionX Corporation recently discussed their fourth quarter and full year 2023 earnings, revealing a mix of achievements and strategic initiatives that position the company for future growth while acknowledging some market challenges.
• The company reported a solid performance for the fiscal year 2023, marking significant financial milestones.
• ChampionX expanded its adjusted EBITDA margin by 430 basis points and achieved a 25% growth in adjusted EBITDA.

• CEO and Director Patrick Gruber joined us on the WTR Small-Cap Spotlight to discuss Gevo’s recent acquisition of Red Trail in North Dakota.
• Those interested can listen to this podcast on Apple Podcasts, Spotify, or on our website
• With the planned $210-million Red Trail acquisition, Gevo will add low-carbon ethanol and carbon capture and sequestration (CCS) as new operational business lines. 

• Ryder System has demonstrated a resilient financial performance in the second quarter of 2024, overcoming challenges in a demanding freight environment.
• The company’s strategic adaptations and acquisitions have strengthened its market stance, making major contributions toward revenue growth.
• The integration of Cardinal Logistics and Impact Fulfillment Services (IFS) is proceeding as planned, enhancing Ryder System’s offerings in dedicated transportation solutions and its supply chain capabilities, respectively.