Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Commodities

<ul>
<li>Following our initiation on <a href="https://www.smartkarma.com/entities/mount-gibson-iron-ltd" target="_blank" data-smartkarma-citation="entities:19043:1" rel="noopener">Mount Gibson Iron (MGX AU)</a> and <a href="https://www.smartkarma.com/entities/kumba-iron-ore-ltd" target="_blank" data-smartkarma-citation="entities:25094:1" rel="noopener">Kumba Iron Ore (KIO SJ)</a>, recently we initiate coverage on <a href="https://www.smartkarma.com/entities/champion-iron-ltd" target="_blank" data-smartkarma-citation="entities:19734:1" rel="noopener">Champion Iron (CIA AU)</a>, a pure play with Canadian assets.</li>
<li>Although it is more richly priced than the other two names, it offers a 50% volume expansion opportunity in FY25/26, subject to financing availability. </li>
<li>Trading at 8.6x FY25 (March-end) PE, 4.6x EV-EBITDA, and a 6% dividend yield (subject to capex), this is not our favorite name at the current price due to production uncertainty. </li>
</ul>


Following our initiation on Mount Gibson Iron (MGX AU) and Kumba Iron Ore (KIO SJ), recently we initiate coverage on Champion Iron (CIA AU), a pure play with Canadian assets.
Although it is more richly priced than the other two names, it offers a 50% volume expansion opportunity in FY25/26, subject to financing availability. 
Trading at 8.6x FY25 (March-end) PE, 4.6x EV-EBITDA, and a 6% dividend yield (subject to capex), this is not our favorite name at the current price due to production uncertainty. 


Champion Iron (CIA CN): Another Expansion Iron Ore Pure Play on High-Grade Ore

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a> and <a href="https://www.smartkarma.com/entities/united-states-steel-corp" target="_blank" data-smartkarma-citation="entities:202:1" rel="noopener">United States Steel (X US)</a> have agreed an all-cash $55.00/share offer, 142% premium to where X traded before Cliff's approach, a very generous 7x EV/24e EBITDA.</li>
<li>A determined buyer seeks market share in the lucrative US market, with no meaningful synergies expected and willingness to keep all US Steel jobs and (greener) growth projects.</li>
<li>Although unions and some lawmakers are voicing concerns, CFIUS shouldn't pose a big hurdle. <strong>Spread</strong> is 12.04%/17.93% (gross/annualised, assuming late settlement by end of Q3 2024). <strong>Long.</strong>
</li>
</ul>



Nippon Steel Corporation (5401 JP) and United States Steel (X US) have agreed an all-cash $55.00/share offer, 142% premium to where X traded before Cliff's approach, a very generous 7x EV/24e EBITDA.
A determined buyer seeks market share in the lucrative US market, with no meaningful synergies expected and willingness to keep all US Steel jobs and (greener) growth projects.
Although unions and some lawmakers are voicing concerns, CFIUS shouldn't pose a big hurdle. Spread is 12.04%/17.93% (gross/annualised, assuming late settlement by end of Q3 2024). Long.



Nippon Steel/United States Steel Corp: Knock-Out Offer

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 Bottom-Up

<ul><li>Cleveland-Cliffs Inc. delivered mixed results for the previous quarter, with revenues above the analyst consensus.</li><li>Cleveland produced its best free cash flow quarter since 2021, with $756 million.</li><li>The richer mix had an offsetting effect in Q2 on expenses, as Cleveland's unit costs were unchanged from the previous quarter.</li></ul>

Cleveland-Cliffs Inc. delivered mixed results for the previous quarter, with revenues above the analyst consensus.Cleveland produced its best free cash flow quarter since 2021, with $756 million.The richer mix had an offsetting effect in Q2 on expenses, as Cleveland's unit costs were unchanged from the previous quarter.

Cleveland-Cliffs Inc.: A Roller Coaster Ride of Earnings and Revenues! - Major Drivers

Value Investing

Vladimir Dimitrov, CFA

<ul>
<li>Cleveland-Cliffs is becoming too aggressive in its consolidation goals, says author.</li>
<li>Cliffs continues to underperform its peers, I outline some important red flags associated with the company's acquisition spree. I remain sceptical that a deal for U.S.</li>
<li>Steel would be beneficial for shareholders.</li>
</ul>


Cleveland-Cliffs is becoming too aggressive in its consolidation goals, says author.
Cliffs continues to underperform its peers, I outline some important red flags associated with the company's acquisition spree. I remain sceptical that a deal for U.S.
Steel would be beneficial for shareholders.


Cleveland-Cliffs: Consolidation At Any Cost Comes With Strings Attached

<ul><li>It was a successful Q4 for Cleveland-Cliffs as the company managed an all-around beat with lower-than-expected losses.</li><li>Cleveland-Cliffs supplies over 7 million tons of steel to the automotive industry, including 5 million tons of direct sales and over 2 million tons of indirect sales.</li><li>With typical volumes of 5 million tons per year, the company expects its full-year 2023 carbon flat-rolled steel selling price to increase to $1,415 per net ton, a $115 per net ton increase year over year.</li></ul>

It was a successful Q4 for Cleveland-Cliffs as the company managed an all-around beat with lower-than-expected losses.Cleveland-Cliffs supplies over 7 million tons of steel to the automotive industry, including 5 million tons of direct sales and over 2 million tons of indirect sales.With typical volumes of 5 million tons per year, the company expects its full-year 2023 carbon flat-rolled steel selling price to increase to $1,415 per net ton, a $115 per net ton increase year over year.

Cleveland-Cliffs Inc: What Is Its True Moat Source? – Key Drivers

United States

Cleveland-Cliffs Inc. is an American iron ore mining company. The Company supplies iron ore pellets, lumps and fines to blast furnaces in the global steel industry. Cliffs is in the process of expanding its customer base to Electric Arc Furnaces.

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Cleveland-Cliffs Inc (CLF US)

Champion Iron (CIA CN): Another Expansion Iron Ore Pure Play on High-Grade Ore

We further expand our coverage in iron ore names by initiating on Champion Iron (CIA AU). With exposure to high-grade Fe ore at 65%, this could be...

Sameer Taneja

Nippon Steel/United States Steel Corp: Knock-Out Offer

This is a very appealing special situation: a motivated buyer, with its cards on the table, financing set aside, support from target and...

Jesus Rodriguez Aguilar

Cleveland-Cliffs Inc.: A Roller Coaster Ride of Earnings and Revenues! - Major Drivers

Cleveland-Cliffs Inc. delivered mixed results for the previous quarter, with revenues above the analyst consensus. Cleveland produced its best...

Baptista Research

Cleveland-Cliffs: Consolidation At Any Cost Comes With Strings Attached

Cliffs continues to underperform its peers, I outline some important red flags associated with the company's acquisition spree. I remain sceptical...

Vladimir Dimitrov, CFA

Cleveland-Cliffs Inc: What Is Its True Moat Source? – Key Drivers

It was a successful Q4 for Cleveland-Cliffs as the company managed an all-around beat with lower-than-expected losses. Cleveland-Cliffs supplies...

Baptista Research

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