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

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

<a href="https://www.smartkarma.com/entities/24254" target="_blank" data-smartkarma-citation="entities:24254:1">Bombardier Inc (BBD/B CN)</a> has recently fallen 38%, <a href="https://www.smartkarma.com/entities/21729" target="_blank" data-smartkarma-citation="entities:21729:1">ThyssenKrupp AG (TKA GR)</a> 18%  and <a href="https://www.smartkarma.com/entities/991" target="_blank" data-smartkarma-citation="entities:991:1">Celltrion Inc (068270 KS)</a> 30%.  In each case, the market was surprised when management admitted that they could not deliver on targets. This need not have been the case. For months, we have been warning that they have been using creative accounting to hide their business reality.

Bombardier Inc (BBD/B CN) has recently fallen 38%, ThyssenKrupp AG (TKA GR) 18%  and Celltrion Inc (068270 KS) 30%.  In each case, the market was surprised when management admitted that they could not deliver on targets. This need not have been the case. For months, we have been warning that they have been using creative accounting to hide their business reality.

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

In my previous note, I have written about how the new SHIA express could give <a href="https://www.smartkarma.com/entities/19482" target="_blank" data-smartkarma-citation="entities:19482:1">Blue Bird (BIRD IJ)</a> a run for their money. Last week, I had the opportunity to personally experience the improvement in the infrastructure condition that holds the country's back for a long time. <h2>Odd &amp; Even</h2>Despite the fact that MRT and LRT development has narrowed the road, traffic has never been better thanks to the odd and even plate number rule. The previous Jakarta governor came up with the odd-even number rule on…

In my previous note, I have written about how the new SHIA express could give Blue Bird (BIRD IJ) a run for their money. Last week, I had the opportunity to personally experience the improvement in the infrastructure condition that holds the country's back for a long time. Odd &amp; EvenDespite the fact that MRT and LRT development has narrowed the road, traffic has never been better thanks to the odd and even plate number rule. The previous Jakarta governor came up with the odd-even number rule on…

Jakarta Traffic - On the Ground Observation

At their recent results, Bombardier seems to have persuaded the markets that the company is on the mend. The reality is that behind their creative accounting little has changed. Reported losses understate the final hits to retained equity and without, what appears to be a cynical manipulation of working capital cashflow usage would have risen not fallen. We urge investors to ignore the headlines and check the detail in the annual report. With assets barely exceeding liabilities, there is little…

At their recent results, Bombardier seems to have persuaded the markets that the company is on the mend. The reality is that behind their creative accounting little has changed. Reported losses understate the final hits to retained equity and without, what appears to be a cynical manipulation of working capital cashflow usage would have risen not fallen. We urge investors to ignore the headlines and check the detail in the annual report. With assets barely exceeding liabilities, there is little…

Bombardier (BBD/B CN): Accounting Wizardry

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)

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

Reality Overwhelms Creative Accounting

Bombardier Inc (BBD/B CN) has recently fallen 38%, ThyssenKrupp AG (TKA GR) 18% and Celltrion Inc (068270 KS) 30%. In each case, the market was...

Bucephalus Research Partnership

Jakarta Traffic - On the Ground Observation

In my previous note, I have written about how the new SHIA express could give Blue Bird (BIRD IJ) a run for their money. Last week, I had the...

Henry Soediarko

Bombardier (BBD/B CN): Accounting Wizardry

At their recent results, Bombardier seems to have persuaded the markets that the company is on the mend. The reality is that behind their creative...

Bucephalus Research Partnership

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