European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<h3><strong>Trends</strong></h3>
<p>There has been no obvious trend over the last two months regarding the discounts, although it has widened in some names. Some of the previous (May and June) recommendations have been bang on. Trading opportunities are less obvious, but some still exist.</p>
<h3><strong>Recommended trades</strong></h3>
<ul class="">
<li>
<a href="https://www.smartkarma.com/entities/carlsberg-a-s" target="_blank" rel="noopener">Carlsberg A/S (CARLB DC)</a>: close trade long B/short A shares (B are trading at 4.4% discount from 12% in June).</li>
<li>
<a href="https://www.smartkarma.com/entities/bayerische-motoren-werke-ag" target="_blank" rel="noopener">Bayerische Motoren Werke AG (BMW GR)</a> : the discount has widened to 23% from 18% by mid-August, as a result of recent volatility. I would recommend setting up a trade <strong>long BMW prefs, short ords</strong> with a target of a 15% discount.</li>
<li>
<a href="https://www.smartkarma.com/entities/fuchs-petrolub-se" target="_blank" rel="noopener">Fuchs Petrolub Se (FPE GR)</a> 's premium of preferred shares is a whopping 33.6% currently. Remember that <em>voting rights are valuable</em>. Recommendation: <strong>long ords/short prefs</strong>, with a 10% target.</li>
<li>
<a href="https://www.smartkarma.com/entities/henkel-ag-co-kgaa" target="_blank" rel="noopener">Henkel AG &amp; Co Kgaa (HEN3 GR)</a> The premium of the preferred shares is 15.4%. I would set up a trade <strong>long prefs/short common shares</strong> with a 10% discount target.</li>
<li>Voting rights are valuable in a company like <a href="https://www.smartkarma.com/entities/volkswagen-ag" target="_blank" data-smartkarma-citation="entities:21738:1" rel="noopener">Volkswagen (VOW GR)</a> , so a <strong>5.8% discount of the prefs</strong>. seems about right. If you believe that the higher liquidity of the prefs will, at some point, mean that the discount will close, then a long prefs/short ords may be an option; plus it can be executed in size. The discount tightened since the March selloff and has been moving within a tight range. </li>
<li>
<a href="https://www.smartkarma.com/entities/grifols-sa" target="_blank" rel="noopener">Grifols SA (GRF SM)</a> B shares are trading at a 41.9% discount (vs. 38% in June). The discount in Grifols B shares has averaged 28% since listing of the B shares in February 2016. I recommend setting up the trade <strong>long B shares traded on Nasdaq, short A shares traded in Madrid</strong>. The target is a 27% discount. Please note there is FX risk, which can be hedged.</li>
<li>The discount in the <a href="https://www.smartkarma.com/entities/telefonaktiebolaget-lm-ericsso" target="_blank" data-smartkarma-citation="entities:22354:1" rel="noopener">Telefonaktiebolaget Lm Ericsso (ERICB SS)</a> (Ericsson) B shares has tightened since my July recommendation: from 8.7% to 7.7%. I would keep the trade on with a 3% discount target.</li>
</ul>
<p>Please read on for table and charts.</p>

Trends
There has been no obvious trend over the last two months regarding the discounts, although it has widened in some names. Some of the previous (May and June) recommendations have been bang on. Trading opportunities are less obvious, but some still exist.
Recommended trades


Carlsberg A/S (CARLB DC): close trade long B/short A shares (B are trading at 4.4% discount from 12% in June).

Bayerische Motoren Werke AG (BMW GR) : the discount has widened to 23% from 18% by mid-August, as a result of recent volatility. I would recommend setting up a trade long BMW prefs, short ords with a target of a 15% discount.

Fuchs Petrolub Se (FPE GR) 's premium of preferred shares is a whopping 33.6% currently. Remember that voting rights are valuable. Recommendation: long ords/short prefs, with a 10% target.

Henkel AG &amp; Co Kgaa (HEN3 GR) The premium of the preferred shares is 15.4%. I would set up a trade long prefs/short common shares with a 10% discount target.
Voting rights are valuable in a company like Volkswagen (VOW GR) , so a 5.8% discount of the prefs. seems about right. If you believe that the higher liquidity of the prefs will, at some point, mean that the discount will close, then a long prefs/short ords may be an option; plus it can be executed in size. The discount tightened since the March selloff and has been moving within a tight range. 

Grifols SA (GRF SM) B shares are trading at a 41.9% discount (vs. 38% in June). The discount in Grifols B shares has averaged 28% since listing of the B shares in February 2016. I recommend setting up the trade long B shares traded on Nasdaq, short A shares traded in Madrid. The target is a 27% discount. Please note there is FX risk, which can be hedged.
The discount in the Telefonaktiebolaget Lm Ericsso (ERICB SS) (Ericsson) B shares has tightened since my July recommendation: from 8.7% to 7.7%. I would keep the trade on with a 3% discount target.

Please read on for table and charts.

Liquid Universe of European Ordinary and Preferred Shares: September Report

<h3><strong>Trends</strong></h3>
<p>The general trend of the last month has been a reduction of the premiums and tightening of the discounts. Some of the previous (May and June)recommendations have been bang on. Trading opportunities are less obvious, but some still exist.</p>
<h3><strong>Recommended trades</strong></h3>
<ul>
<li>
<a href="https://www.smartkarma.com/entities/bayerische-motoren-werke-ag" target="_blank" data-smartkarma-citation="entities:21591:1" rel="noopener">Bayerische Motoren Werke AG (BMW GR)</a> exhibited a trend towards a reduction of the discount of preferred shares. Now the discount is 24%, as a result of recent volatility. I would recommend setting up a trade<span class="apple-converted-space"> </span><strong>long BMW prefs, short ords</strong> with a target of a 12% discount.</li>
<li>
<a href="https://www.smartkarma.com/entities/fuchs-petrolub-se" target="_blank" rel="noopener">Fuchs Petrolub Se (FPE GR)</a> 's premium seems to vary within a range, which is probably liquidity related. It is 23.7% currently. Remember that voting rights are valuable. The recommendation is setting up <strong>long ords/short prefs</strong>, with a 10% target.</li>
<li>
<a href="https://www.smartkarma.com/entities/henkel-ag-co-kgaa" target="_blank" rel="noopener">Henkel AG &amp; Co Kgaa (HEN3 GR)</a> shows a long-term trend towards a reduction of the premium of the preferred shares. The premium is 12.9%. I would set up a trade long prefs/short common shares with a 10% discount target.</li>
<li>
<a href="https://www.smartkarma.com/entities/grifols-sa" target="_blank" rel="noopener">Grifols SA (GRF SM)</a>. Grifols B shares are trading at a 37% discount (vs. 38% in the last report), there is a trend towards the tightening of this discount since mid-March. The discount in Grifols B shares has averaged 26.7% over the last four years. I recommend setting up the trade<span class="apple-converted-space"> </span><strong>long B shares traded on Nasdaq, short A shares traded in Madrid</strong>. The target is a 27% discount. Please note there is FX risk, which can be hedged.</li>
<li>There is an 8.7% discount in Ericsson B shares (<a href="https://www.smartkarma.com/entities/telefonaktiebolaget-lm-ericsso" target="_blank" data-smartkarma-citation="entities:22354:1" rel="noopener">Telefonaktiebolaget Lm Ericsso (ERICB SS)</a> ). Setting up long B shares, short A shares seems tempting.</li>
</ul>
<p>Please read on for table and charts.</p>

Trends
The general trend of the last month has been a reduction of the premiums and tightening of the discounts. Some of the previous (May and June)recommendations have been bang on. Trading opportunities are less obvious, but some still exist.
Recommended trades


Bayerische Motoren Werke AG (BMW GR) exhibited a trend towards a reduction of the discount of preferred shares. Now the discount is 24%, as a result of recent volatility. I would recommend setting up a trade long BMW prefs, short ords with a target of a 12% discount.

Fuchs Petrolub Se (FPE GR) 's premium seems to vary within a range, which is probably liquidity related. It is 23.7% currently. Remember that voting rights are valuable. The recommendation is setting up long ords/short prefs, with a 10% target.

Henkel AG &amp; Co Kgaa (HEN3 GR) shows a long-term trend towards a reduction of the premium of the preferred shares. The premium is 12.9%. I would set up a trade long prefs/short common shares with a 10% discount target.

Grifols SA (GRF SM). Grifols B shares are trading at a 37% discount (vs. 38% in the last report), there is a trend towards the tightening of this discount since mid-March. The discount in Grifols B shares has averaged 26.7% over the last four years. I recommend setting up the trade long B shares traded on Nasdaq, short A shares traded in Madrid. The target is a 27% discount. Please note there is FX risk, which can be hedged.
There is an 8.7% discount in Ericsson B shares (Telefonaktiebolaget Lm Ericsso (ERICB SS) ). Setting up long B shares, short A shares seems tempting.

Please read on for table and charts.

Liquid Universe of European Ordinary and Preferred Shares

Materials, IPO & Equity Analyst

Venkat Ramana Nandyal

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p><a href="https://www.smartkarma.com/entities/atlas-copco-ab" target="_blank" data-smartkarma-citation="entities:22282:1" rel="noopener">Atlas Copco AB (ATCOA SS)</a> has offered €50/share for <a href="https://www.smartkarma.com/entities/isra-vision-ag" target="_blank" data-smartkarma-citation="entities:28854:1" rel="noopener">Isra Vision AG (ISR GR)</a> in a friendly takeover bid. The offer represents a premium of ~30% on volume-weighted three months' average price and 43% on the last close before the announcement. With ISRA’s management and Board tendering 29% of shares, Atlas Copco has already secured ~35% of shares. We expect the deal to complete given the significant premium offered by Atlas Copco.</p><div class="content-highlight"><p>The acquisition will only make sense if ISRA would provide meaningful revenue synergies and potential cost synergies. This deal provides a good exit premium for ISRA shareholders.</p></div>

Atlas Copco AB (ATCOA SS) has offered €50/share for Isra Vision AG (ISR GR) in a friendly takeover bid. The offer represents a premium of ~30% on volume-weighted three months' average price and 43% on the last close before the announcement. With ISRA’s management and Board tendering 29% of shares, Atlas Copco has already secured ~35% of shares. We expect the deal to complete given the significant premium offered by Atlas Copco.The acquisition will only make sense if ISRA would provide meaningful revenue synergies and potential cost synergies. This deal provides a good exit premium for ISRA shareholders.

Atlas Copco Bid For ISRA Vision: Good Exit Premium for ISRA Shareholders

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>The broad global indexes (MSCI ACWI, ACWI ex-US, and EAFE) remain near logical resistance as investors await monetary policy decisions from the ECB and Federal Reserve. Considering overhead resistance and continued mixed economic and market signals, we remain squarely in the neutral camp.  We outline important technical levels across major indexes and highlight attractive opportunities within the Manufacturing, Transportation, and Materials Sectors, most of which hail from Europe and Japan.</p>

The broad global indexes (MSCI ACWI, ACWI ex-US, and EAFE) remain near logical resistance as investors await monetary policy decisions from the ECB and Federal Reserve. Considering overhead resistance and continued mixed economic and market signals, we remain squarely in the neutral camp.  We outline important technical levels across major indexes and highlight attractive opportunities within the Manufacturing, Transportation, and Materials Sectors, most of which hail from Europe and Japan.

Global Equity Strategy: Overhead Resistance Looms

<p>We remain constructive on global equities as the MSCI ACWI, ACWI ex-U.S., and EAFE indexes consolidate above their respective 200-day moving averages. On the other hand, the MSCI EM index is breaking below its 200-day moving average and is flirting with a breakdown below 56,000 support (local currency).  We see attractive Opportunities in Manufacturing &amp; Materials in Europe, Japan and China, India, and Taiwan. </p>

We remain constructive on global equities as the MSCI ACWI, ACWI ex-U.S., and EAFE indexes consolidate above their respective 200-day moving averages. On the other hand, the MSCI EM index is breaking below its 200-day moving average and is flirting with a breakdown below 56,000 support (local currency).  We see attractive Opportunities in Manufacturing &amp; Materials in Europe, Japan and China, India, and Taiwan. 

Global Indexes Are Consolidating, EM Is Breaking Down

Sweden

Atlas Copco AB is an international industrial group. The Company develops, manufactures, and markets compressed air equipment and treatment, vacuum solutions, mining equipment, generators, electric and pneumatic tools, and hybrid joining technologies and other assembly systems, as well as offers related equipment and services.

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Atlas Copco (ATCOA SS)

Liquid Universe of European Ordinary and Preferred Shares: September Report

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Jesus Rodriguez Aguilar

Liquid Universe of European Ordinary and Preferred Shares

Trends The general trend of the last month has been a reduction of the premiums and tightening of the discounts. Some of the previous (May and...

Jesus Rodriguez Aguilar

Atlas Copco Bid For ISRA Vision: Good Exit Premium for ISRA Shareholders

Atlas Copco AB (ATCOA SS) has offered €50/share for Isra Vision AG (ISR GR) in a friendly takeover bid. The offer represents a premium of ~30% on...

Venkat Ramana Nandyal

Global Equity Strategy: Overhead Resistance Looms

The broad global indexes (MSCI ACWI, ACWI ex-US, and EAFE) remain near logical resistance as investors await monetary policy decisions from the ECB...

Vermilion Research

Global Indexes Are Consolidating, EM Is Breaking Down

We remain constructive on global equities as the MSCI ACWI, ACWI ex-U.S., and EAFE indexes consolidate above their respective 200-day moving...

Vermilion Research

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52-week Range

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