Daily Briefs

• On the 26th January, proxy advisor Glass Lewis issued a report recommending Hollysys (HOLI US) shareholders vote against Ascendent’s merger. Two days later, ISS issued a similar opinion.  
• Both reports targeted HOLI’s efforts to maximize an Offer price. Elsewhere, some salient points were raised. But overall, there exists an air of naivety in their conclusions.
• HOLI’s EGM is scheduled for February 8th. The merger consideration of US$26.50/share is in line with, or above, the estimated values of Deutsche Bank’s fairness opinion.

• LRCX reported Q423 revenues of $3.76 billion, marginally ahead of the guided midpoint, up 8% QoQ but down 29% YoY
• Looking ahead, LRCX forecasted Q124 revenues of $3.7 billion, essentially flat sequentially.
• The memory recovery is happening, but only for HBM and node transitions. No spending on memory capacity additions means limited upside for LRCX. 

• Having lagged competitors on share price basis since Holcim/Lafarge merger, on 29 January, Holcim (HOLN SW) announced plans to spin-off and list its North American business in the US.
• Infrastructure and housing are reponsible for U.S. comparables to trade on 14.7x median EV/NTM Fwd EBITDA, in sharp contrast to 5.4x median EV/NTM Fwd EBITDA of European comparables. 
• Even if valuing the RoW business at the lower median European multiples, the spin-off should be value accretive. My fair value estimate of CHF 84.47/share represents 25.7% upside.

• Intel reported earnings last week. Intel was one of my favorite stocks last year, and I wrote about it here in “Is This the Intel Inflection”, where I successfully called the bottom in the stock.
• It’s worked pretty well, even against the SOXX index since then.
• I’ll summarize my thesis back then, update you now on what I think about Intel, and write about results and read-throughs.

• “El Nino has peaked and is declining, indicating a return to neutral in the southern hemisphere autumn 2024 (March-June),” the Australian Bureau of Meteorology wrote last week.
• Even more the institute forecasts that El Nino may completely dissipate by June.
• For our clients, that won’t come as a surprise as we highlighted this scenario over a couple of weeks.

Key points (machine generated)

• Mitek specializes in mobile image capture and digital identity verification solutions, with approximately 60% of its business in mobile image capture and 40% in digital identity verification.
• The company has experienced strong revenue growth, with a compound annual growth rate of 18% to 22% over the past one, three, and five years, reaching approximately $170 million as of September 2023.
• Mitek has focused on using profits from its mature mobile image capture business to build its identity verification segment, but the mobile deposit business has also grown at a similar rate, limiting portfolio rebalancing in recent years.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key points (machine generated)

• Farmer Brothers, a small company with a market cap under $100 million, has undergone a board refresh and cooperation agreement following operational missteps and poor management execution.
• The company has agreed to sell its Northlake, Texas coffee facility and non-direct store delivery coffee business to TreeHouse Foods for around $100 million.
• These recent events have caused Farmer Brothers’ stock to be undervalued, with attractive valuation ratios, making it a potentially appealing investment opportunity.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key points (machine generated)

• AVDL is a pharmaceutical company that has recently launched LUMRYZ, a drug used to treat Narcolepsy, a rare sleeping disorder.
• LUMRYZ is an improved version of two existing drugs, Xyrem and Xywav, which generate $1.9 billion in annual revenue and have around 16,000 patients on the drug.
• LUMRYZ aims to address the inconvenience of the unusual dosing profile of Xyrem and Xywav, which require patients to take two doses, with the second dose taken in the middle of the night.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.