Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

In our second report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we analyse issuers in the speciality finance sector. We believe this sector will be affected by the current crisis with a lag, due to two adverse trends: i) mounting concerns about unsecured consumer credit; and ii) knock-on effects from significantly reduced economic activity (e.g. lower real-wage growth and higher unemployment).

  In our second report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we analyse issuers in the speciality finance sector.   We believe this sector will be affected by the current crisis with a lag, due to two adverse trends: i) mounting concerns about unsecured consumer credit; and ii) knock-on effects from significantly reduced economic activity (e.g. lower real-wage growth and higher unemployment). 

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 2 (Speciality Finance) - Lucror Analytics

Europe has already been suffering anaemic growth in recent years, and the region will likely be severely affected by the COVID-19 pandemic. With the virus having spread like wildfire through the continent and various countries under lockdown, we are re-assessing the liquidity positions of companies in our European HY coverage universe amid the crisis. In our first report for this series, we analyse issuers in the gaming and oil & gas / refining sectors.

  Europe has already been suffering anaemic growth in recent years, and the region will likely be severely affected by the COVID-19 pandemic. With the virus having spread like wildfire through the continent and various countries under lockdown, we are re-assessing the liquidity positions of companies in our European HY coverage universe amid the crisis.   In our first report for this series, we analyse issuers in the gaming and oil & gas / refining sectors. 

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 1 (Gaming, Oil & Gas) - Lucror Analytics

While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread rapidly across continents.آ  In our view, key concerns include: [1] potential demand impact on industries with significant human interaction; [2] potential impact on the economy if consumer sentiment deteriorates materially; [3] potential impact on labour force productivity; [4] potential impact on the supply chains of industries; and [5] potential impact on financial markets. We are cautious on companies which are highly levered, cyclical, have limited liquidity or significant debt maturities in the near term. In the report, we assess the impact of COVID-19 on: [1] Europe, China/Asia and the Americas; [2] supply chains; and [3] the sectors and companies under our coverage.

  While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread rapidly across continents.آ    In our view, key concerns include: [1] potential demand impact on industries with significant human interaction; [2] potential impact on the economy if consumer sentiment deteriorates materially; [3] potential impact on labour force productivity; [4] potential impact on the supply chains of industries; and [5] potential impact on financial markets. We are cautious on companies which are highly levered, cyclical, have limited liquidity or significant debt maturities in the near term.   In the report, we assess the impact of COVID-19 on: [1] Europe, China/Asia and the Americas; [2] supply chains; and [3] the sectors and companies under our coverage. 

COVID-19: Impact On Global High Yield - Lucror Analytics

As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an uncontrolled Brexit averted for the time being, almost all asset classes recorded strong performance during the year, including European HY. Going forward, Brexit and US-China trade relations may well remain major market drivers. Other potential drivers include the coronavirus outbreak in China, tensions in the Middle East and the development of US-EU trade relations. Our HY investment outlook opens with a discussion on the key macro developments that defined 2019, and the outlook for 2020. We then provide an overview of the HY market performance, and offer our top trade ideas for the year. Finally, we zoom in on the developments for key sectors and companies in our coverage universe, including outlooks and trade recommendations.

   As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an uncontrolled Brexit averted for the time being, almost all asset classes recorded strong performance during the year, including European HY. Going forward, Brexit and US-China trade relations may well remain major market drivers. Other potential drivers include the coronavirus outbreak in China, tensions in the Middle East and the development of US-EU trade relations.    Our HY investment outlook opens with a discussion on the key macro developments that defined 2019, and the outlook for 2020. We then provide an overview of the HY market performance, and offer our top trade ideas for the year. Finally, we zoom in on the developments for key sectors and companies in our coverage universe, including outlooks and trade recommendations. 

European High Yield Outlook 2020 - Lucror Analytics

Director | Exposing Creative Accounting, Bucephalus Research Partnership

Robert Medd

Director | Exposing Creative Accounting

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

​Bucephalus Research Partnership:
- Is an independent fee-based research service
- Does not take proprietary positions, long or short
- Does not solicit business or fees from the corporates we review

Forensic Accounting

Core EBIT fell: FY2018 EBIT and cashflow were inflated by one-off gains.Core cashflow remains negative: <a href="https://www.smartkarma.com/entities/24254" target="_blank" data-smartkarma-citation="entities:24254:1">Bombardier Inc (BBD/B CN)</a> is still unable to fund its annual US$1bn+ capex budget from core operating cashflow.Covenants maybe under stress: We are very concerned that the consolidated capital structure presented to investors is very different to the structures used in their debt covenants.

Core EBIT fell: FY2018 EBIT and cashflow were inflated by one-off gains.Core cashflow remains negative: Bombardier Inc (BBD/B CN) is still unable to fund its annual US$1bn+ capex budget from core operating cashflow.Covenants maybe under stress: We are very concerned that the consolidated capital structure presented to investors is very different to the structures used in their debt covenants.

Sell Bombardier: Core EBIT Fell, Core Cashflow Is Negative, Covenants Maybe Under Stress

Canada

Bombardier Inc. is a manufacturer of both planes and trains.The Company operates plants in North America, Europe, and Asia.

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Bombardier Inc (BBD/B CN)

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 2 (Speciality Finance) - Lucror Analytics

In our second report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we...

Lucror Analytics

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 1 (Gaming, Oil & Gas) - Lucror Analytics

Europe has already been suffering anaemic growth in recent years, and the region will likely be severely affected by the COVID-19 pandemic. With...

Lucror Analytics

COVID-19: Impact On Global High Yield - Lucror Analytics

While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread...

Lucror Analytics

European High Yield Outlook 2020 - Lucror Analytics

As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an...

Lucror Analytics

Sell Bombardier: Core EBIT Fell, Core Cashflow Is Negative, Covenants Maybe Under Stress

Core EBIT fell: FY2018 EBIT and cashflow were inflated by one-off gains.Core cashflow remains negative: Bombardier Inc (BBD/B CN) is still unable...

Bucephalus Research Partnership

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