Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> delivered a strong set of 2Q21 results, beating sell-side consensus estimates on both the top and bottom-line and delivering numbers at the top-end of management’s guided ranges, which, in conjunction with a continued strong demand environment, has led to an increase in growth and profitability guidance for the remainder of FY2021.</p><p>Further short-term share price weakness, based on supply constraint concerns, along with a continuation of the earnings upgrade cycle, has resulted in MediaTek trading on a 13.8x NTM PE ratio, which is more than one standard deviation below its historical average trading range. MediaTek also currently trades on an extremely attractive 6.3% NTM dividend yield with little risk of a negative surprise to dividend payments given the ongoing earnings upgrades, and MediaTek having generated NT$28bn in Operating Cash Flow, during 2Q21, which helped its Net Cash balance increase further to NT$191bn, now 13% of its Market Cap. </p><p>In this insight, we look at MediaTek’s 2Q21 results, its medium- and longer-term growth outlook and current valuation levels. This insight is also a follow-up from our more-detailed analysis of MediaTek (<a href="https://www.smartkarma.com/insights/mediatek-high-quality-5g-beneficiary-with-a-tremendously-attractive-dividend-yield" target="_blank" data-smartkarma-citation="insights:53096" rel="noopener">MediaTek: High-Quality 5G Beneficiary with a Tremendously Attractive Dividend Yield</a>) last month.</p>

Mediatek Inc (2454 TT) delivered a strong set of 2Q21 results, beating sell-side consensus estimates on both the top and bottom-line and delivering numbers at the top-end of management’s guided ranges, which, in conjunction with a continued strong demand environment, has led to an increase in growth and profitability guidance for the remainder of FY2021.Further short-term share price weakness, based on supply constraint concerns, along with a continuation of the earnings upgrade cycle, has resulted in MediaTek trading on a 13.8x NTM PE ratio, which is more than one standard deviation below its historical average trading range. MediaTek also currently trades on an extremely attractive 6.3% NTM dividend yield with little risk of a negative surprise to dividend payments given the ongoing earnings upgrades, and MediaTek having generated NT$28bn in Operating Cash Flow, during 2Q21, which helped its Net Cash balance increase further to NT$191bn, now 13% of its Market Cap. In this insight, we look at MediaTek’s 2Q21 results, its medium- and longer-term growth outlook and current valuation levels. This insight is also a follow-up from our more-detailed analysis of MediaTek (MediaTek: High-Quality 5G Beneficiary with a Tremendously Attractive Dividend Yield) last month.

MediaTek: Results Beat, Increased Guidance, Earnings Upgrades… and a Lower Share Price

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<p>Spotify missed on MAUs again and lowered 2021 guidance. Not great for a subscription business built on a distant 10 year DCF built on subscriber trajectories. We have pushed Spotify as a short for a while and think its still a good short, especially as their spending on podcasting continues, even as usage is rolling over...oh yeah, and they still have no operating leverage. </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

Spotify missed on MAUs again and lowered 2021 guidance. Not great for a subscription business built on a distant 10 year DCF built on subscriber trajectories. We have pushed Spotify as a short for a while and think its still a good short, especially as their spending on podcasting continues, even as usage is rolling over...oh yeah, and they still have no operating leverage. Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

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.

Equity Capital Markets

<ul><li>Apple has reached our target price after another phenomenal quarter with a 36% jump in revenues and a near triple-digit growth in the earnings per share.</li><li>The company witnessed a phenomenal growth in emerging markets like India, Latin America, Vietnam, and of course, the Chinese market.</li><li>We are highly bullish on Apple and give it a ‘Buy’ rating with a revised target price.</li></ul>

Apple has reached our target price after another phenomenal quarter with a 36% jump in revenues and a near triple-digit growth in the earnings per share.The company witnessed a phenomenal growth in emerging markets like India, Latin America, Vietnam, and of course, the Chinese market.We are highly bullish on Apple and give it a ‘Buy’ rating with a revised target price.

<p>We were wildly impressed by Google's quarter. Microsoft continues to chug along...our takeaway from the two is Amazon is primed for a monster print on Thursday...retail advertising is on fire right now, while GCP and Azure showed almost no deceleration QoQ.</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

We were wildly impressed by Google's quarter. Microsoft continues to chug along...our takeaway from the two is Amazon is primed for a monster print on Thursday...retail advertising is on fire right now, while GCP and Azure showed almost no deceleration QoQ.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

TMT Megacap Earnings Observations: Google & Microsoft

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>We continue to see a mixed market, and weak market dynamics lead us to be cautious. One of the primary issues is weak breadth; the large-cap indexes (S&amp;P 500 and Nasdaq) remain bullish despite being held up by a relatively small number of mega-cap growth stocks, a condition that can persist for weeks or months. Ultimately, as long as there continues to be an absence of breakdowns at the index and Sector level we remain constructive overall.</p>

We continue to see a mixed market, and weak market dynamics lead us to be cautious. One of the primary issues is weak breadth; the large-cap indexes (S&amp;P 500 and Nasdaq) remain bullish despite being held up by a relatively small number of mega-cap growth stocks, a condition that can persist for weeks or months. Ultimately, as long as there continues to be an absence of breakdowns at the index and Sector level we remain constructive overall.

U.S. Equity Strategy: Cautious Overall; Favor Large-Caps & Growth; Key Supports Holding In The U.S.

United States

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related accessories. The Company also offers payment, digital content, cloud and advertising services. Apple Inc.'s customers are primarily in consumer, small & mid-sized business, education, enterprise and government markets worldwide.

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Apple (AAPL US)

Spotify 2Q21: Podcasting Rolling Over?

Spotify missed on MAUs again and lowered 2021 guidance. Not great for a subscription business built on a distant 10 year DCF built on subscriber...

Aaron Gabin

Apple Inc. - Investment Thesis

Apple has reached our target price after another phenomenal quarter with a 36% jump in revenues and a near triple-digit growth in the earnings per...

Baptista Research

TMT Megacap Earnings Observations: Google & Microsoft

We were wildly impressed by Google's quarter. Microsoft continues to chug along...our takeaway from the two is Amazon is primed for a monster print...

Aaron Gabin

U.S. Equity Strategy: Cautious Overall; Favor Large-Caps & Growth; Key Supports Holding In The U.S.

The S&P 500 remains bullish, recently hitting our 4400-4406 target as large-caps remain attractive. As long as support at the 50-day MA and 4257...

Vermilion Research

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MediaTek: Results Beat, Increased Guidance, Earnings Upgrades… and a Lower Share Price

In this insight take an updated look at MediaTek, its medium- and longer-term growth outlook and current valuation levels, following its 2Q21 results.

Wium Malan, CFA

Spotify 2Q21: Podcasting Rolling Over?

Spotify missed on MAUs again and lowered 2021 guidance. Not great for a subscription business built on a distant 10 year DCF built on subscriber...

Aaron Gabin

Apple Inc. - Investment Thesis

Apple has reached our target price after another phenomenal quarter with a 36% jump in revenues and a near triple-digit growth in the earnings per...

Baptista Research

TMT Megacap Earnings Observations: Google & Microsoft

We were wildly impressed by Google's quarter. Microsoft continues to chug along...our takeaway from the two is Amazon is primed for a monster print...

Aaron Gabin

U.S. Equity Strategy: Cautious Overall; Favor Large-Caps & Growth; Key Supports Holding In The U.S.

The S&P 500 remains bullish, recently hitting our 4400-4406 target as large-caps remain attractive. As long as support at the 50-day MA and 4257...

Vermilion Research