Transport Sector, China and Asia-focused Research

Charles De Trenck

Equity Bottom-Up

Oil has traded to the upper bounds of its expected price range in 2017 – and is higher than pundits expected only a couple of months ago. We can certainly see names like <a href="https://www.smartkarma.com/entities/12530" target="_blank" data-smartkarma-citation="entities:12530:1">Valero Energy Corp (VLO US)</a> at new 52-week highs. But this is a 20x trailing earnings stock. <a href="https://www.smartkarma.com/entities/811" target="_blank" data-smartkarma-citation="entities:811:1">Exxon Mobil Corp (XOM US)</a>, on the other hand, appears to have merely recovered from a “mind the gap” recent short-term oversold position, while still being a 30x trailing earnings and 10x EBITDA/share stock (ie, not that interesting).…

Oil has traded to the upper bounds of its expected price range in 2017 – and is higher than pundits expected only a couple of months ago. We can certainly see names like Valero Energy Corp (VLO US) at new 52-week highs. But this is a 20x trailing earnings stock. Exxon Mobil Corp (XOM US), on the other hand, appears to have merely recovered from a “mind the gap” recent short-term oversold position, while still being a 30x trailing earnings and 10x EBITDA/share stock (ie, not that interesting).…

Energy Plays on Cold Winter/$45-55 Oil… What's Breaking Out

Energy Expert

Thierry Bros, PhD

Thierrybros.com

Thematic (Sector/Industry)

Interesting article in the Financial Time (FT) on stock exchanges fighting for Saudi Aramco IPO <a href="https://www.ft.com/content/41af604e-0315-11e7-ace0-1ce02ef0def9" target="_blank">https://www.ft.com/content/41af604e-0315-11e7-ace0-1ce02ef0def9 </a>with the following conclusion "Saudi Aramco will initially list as much as 5% of the company and investors and analysts have questioned the size of Riyadh’s $2tn valuation. But even if it reaches just half that target it would still raise $50bn — twice as much as Alibaba’s record IPO in 2014."Back in <a href="https://www.smartkarma.com/insights/saudi-aramco-value-tn-maybe-not" target="_blank" data-smartkarma-citation="insights:8177">Saudi Aramco Value: $tn? Maybe Not!</a> my…

Interesting article in the Financial Time (FT) on stock exchanges fighting for Saudi Aramco IPO https://www.ft.com/content/41af604e-0315-11e7-ace0-1ce02ef0def9 with the following conclusion "Saudi Aramco will initially list as much as 5% of the company and investors and analysts have questioned the size of Riyadh’s $2tn valuation. But even if it reaches just half that target it would still raise $50bn — twice as much as Alibaba’s record IPO in 2014."Back in Saudi Aramco Value: $tn? Maybe Not! my…

New York and London Battle for Saudi Aramco IPO

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

<ul>
<li>The Republican replacement for ‘Obamacare’ has been announced and looks an incoherent mess – resurgent healthcare inflation will be a drag on discretionary spending.</li>
<li>The US yield curve is flattening, overall bank credit growth has been negative for two months and yesterday’s January consumer lending data was about half consensus expectations.</li>
<li>The global mining sector has been selling off as expected with iron ore/copper prices – I remain tactically short the FTSE 350 mining index.</li>
<li>Overall, the US…</li>
</ul>


The Republican replacement for ‘Obamacare’ has been announced and looks an incoherent mess – resurgent healthcare inflation will be a drag on discretionary spending.
The US yield curve is flattening, overall bank credit growth has been negative for two months and yesterday’s January consumer lending data was about half consensus expectations.
The global mining sector has been selling off as expected with iron ore/copper prices – I remain tactically short the FTSE 350 mining index.
Overall, the US…


US Healthcare Overhaul Stumbling, Singapore Cyclical Rally Looking Premature

<div class="content-highlight">As International Oil Companies (IOC) have now published their FY2016 results, let's compare their level of oil and gas production to see which one is best positioned if our world has to move away from oil (and coal) to gas, the cleanest fossil fuel (and renewable).</div><div style="text-align: center;" class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/021/237/original/2016%20HC%20production.JPG?1487582898" class="editor-image img-responsive" data-smartkarma-image-id="21237"></figure>Source: company data, thierrybros.com
</div><ul><li>
<a href="https://www.smartkarma.com/entities/23749" target="_blank" data-smartkarma-citation="entities:23749:1">Gazprom PJSC (GAZP RX)</a>'s hydrocarbon production increased by 1% thanks to an 8% increase in oil. <a href="https://www.smartkarma.com/entities/23749" target="_blank" data-smartkarma-citation="entities:23749:1">Gazprom PJSC (GAZP RX)</a> is the biggest listed hydrocarbon producer but more importantly, with gas…</li></ul>

As International Oil Companies (IOC) have now published their FY2016 results, let's compare their level of oil and gas production to see which one is best positioned if our world has to move away from oil (and coal) to gas, the cleanest fossil fuel (and renewable).
Source: company data, thierrybros.com

Gazprom PJSC (GAZP RX)'s hydrocarbon production increased by 1% thanks to an 8% increase in oil. Gazprom PJSC (GAZP RX) is the biggest listed hydrocarbon producer but more importantly, with gas…

Are International Oil Companies Adapting to Climate Change Challenges?

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

DFRS Maritime model portfolio – 1 year performance with 38% return <ul><li>Our portfolio defied a terrible year for the industry to produce a 38% return in our first year out. The model portfolio markedly outperformed the benchmark indices, BISHIPGP Index (Bloomberg Intelligence Marine Shipping Index, 14%) and MSCI World Index(19%) by a big margin. </li><li>For 2017, lowering allocation to dry bulk stocks; increasing weightage on container trade. We have reduced our allocation to the dry bulk segment to 31% from 42%. The value play is over in our view and we believe stocks could be at the risk of “too soon too fast” in the near term. Conversely, we believe that the worst is over for the container shipping and we see higher returns for the sector in 2017-18. We have increased the allocation to the sector from 8% to 27%. The port sector is another major constituent of our model portfolio for 2017 as world trade recovery gathers steam and earnings remain resilient for our portfolio constituents. </li><li>We are Neutral on gas shipping as we believe the stocks are trading in a fair territory, while we maintain our Unattractive stance on tankers. </li></ul>

DFRS Maritime model portfolio – 1 year performance with 38% return Our portfolio defied a terrible year for the industry to produce a 38% return in our first year out. The model portfolio markedly outperformed the benchmark indices, BISHIPGP Index (Bloomberg Intelligence Marine Shipping Index, 14%) and MSCI World Index(19%) by a big margin. For 2017, lowering allocation to dry bulk stocks; increasing weightage on container trade. We have reduced our allocation to the dry bulk segment to 31% from 42%. The value play is over in our view and we believe stocks could be at the risk of “too soon too fast” in the near term. Conversely, we believe that the worst is over for the container shipping and we see higher returns for the sector in 2017-18. We have increased the allocation to the sector from 8% to 27%. The port sector is another major constituent of our model portfolio for 2017 as world trade recovery gathers steam and earnings remain resilient for our portfolio constituents. We are Neutral on gas shipping as we believe the stocks are trading in a fair territory, while we maintain our Unattractive stance on tankers. 

DFRS Maritime Model Portfolio - 1 Year Performance with 38% Return

United States

Valero Energy Corporation is an independent petroleum refining and marketing company that owns and operates refineries in the United States, Canada, and Aruba.  The Company produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products as well as diesel fuel, low-sulfur and ultra-low-sulfur diesel fuel, and oxygenates.

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Valero Energy (VLO US)

Energy Plays on Cold Winter/$45-55 Oil… What's Breaking Out

Oil has traded to the upper bounds of its expected price range in 2017 – and is higher than pundits expected only a couple of months ago. We can...

Charles De Trenck

New York and London Battle for Saudi Aramco IPO

Interesting article in the Financial Time (FT) on stock exchanges fighting for Saudi Aramco IPO...

Thierry Bros, PhD

US Healthcare Overhaul Stumbling, Singapore Cyclical Rally Looking Premature

The Republican replacement for ‘Obamacare’ has been announced and looks an incoherent mess – resurgent healthcare inflation will be a drag on...

Sean Maher

Are International Oil Companies Adapting to Climate Change Challenges?

As International Oil Companies (IOC) have now published their FY2016 results, let's compare their level of oil and gas production to see which one...

Thierry Bros, PhD

DFRS Maritime Model Portfolio - 1 Year Performance with 38% Return

DFRS Maritime model portfolio – 1 year performance with 38% return Our portfolio defied a terrible year for the industry to produce a 38% return...

Drewry Maritime Financial Research

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