European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Liberty has waived the 95% threshold condition. Liberty has now mandatorily opened again the tender given it owns more than 90% (93.43%),  on same terms until 13 September (settlement 27 September).</li>
<li>At 5.9x EV/Fwd EBITDA (vs. 5.4x EV/20e EBITDA for Orange Belgium minorities), the offer is relatively cheap, but also reflects the uncertainties surrounding Citymesh's entrance and risk of market share losses.</li>
<li>Spread is positive. After the second acceptance period closes, I believe the delisting is extremely likely. With limited liquidity and floor dividend no longer guaranteed, recommendation is accept the offer. </li>
</ul>


Liberty has waived the 95% threshold condition. Liberty has now mandatorily opened again the tender given it owns more than 90% (93.43%),  on same terms until 13 September (settlement 27 September).
At 5.9x EV/Fwd EBITDA (vs. 5.4x EV/20e EBITDA for Orange Belgium minorities), the offer is relatively cheap, but also reflects the uncertainties surrounding Citymesh's entrance and risk of market share losses.
Spread is positive. After the second acceptance period closes, I believe the delisting is extremely likely. With limited liquidity and floor dividend no longer guaranteed, recommendation is accept the offer. 


Liberty/​​Telenet: Re-Opening of Tender Offer

<ul>
<li>Telenet has announced the publication of the prospectus. The Board of Directors of Telenet has prepared a response memorandum in which it sets out its recommendation of the Offer.</li>
<li>The offer is opportunistic and optically generous, with neither interloper risk nor sweetening to be expected. I believe most investors will cash out. Liberty could eventually drop the acceptance threshold.</li>
<li>Given the ambiguity surrounding both the company and the sector in Belgium, I still think Liberty might acquire Telenet for almost a bargain. Spread is 2.38%/19.8% (gross/annualised).</li>
</ul>


Telenet has announced the publication of the prospectus. The Board of Directors of Telenet has prepared a response memorandum in which it sets out its recommendation of the Offer.
The offer is opportunistic and optically generous, with neither interloper risk nor sweetening to be expected. I believe most investors will cash out. Liberty could eventually drop the acceptance threshold.
Given the ambiguity surrounding both the company and the sector in Belgium, I still think Liberty might acquire Telenet for almost a bargain. Spread is 2.38%/19.8% (gross/annualised).


Liberty/​Telenet: Opening of Acceptance Period

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

Communication Services Select Sector SPDR Fund / Technical Analysis

Communication Services Select Sector SPDR Fund

<ul>
<li>In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.</li>
<li>We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.</li>
<li>After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.</li>
</ul>


In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.
We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.
After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.


Upgrading Communications, Downgrading Staples - Both to Market Weight; US Dollar Major Top

Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul><li>Liberty Global has been a challenging name to hold through its years-long restructuring process.</li><li>In spite of the disappointing returns, the company has secured key deals necessary for fixed-mobile convergence in all of its major markets.</li><li>The company still trades at discount to its fair value, in spite of improving fundamentals.</li></ul>

Liberty Global has been a challenging name to hold through its years-long restructuring process.In spite of the disappointing returns, the company has secured key deals necessary for fixed-mobile convergence in all of its major markets.The company still trades at discount to its fair value, in spite of improving fundamentals.

Liberty Global: Securing Long-Term Competitive Advantages

Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

<a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> is a broadband and cable TV provider in Indonesia. It is undervalued under all scenarios with 54% upside to the 2021 fair value per share in bear case and 143% upside to the 2021 fair valuer per share in the base case.The company recently embarked on a new subscriber growth strategy, which so far has been successful. Over the past two quarters, Link Net added an average of 58,154 new subscribers per quarter. Over the previous five years, the average quarterly rate of new subscribers was 12,232. ARPU fell with the subscriber growth, but it seems to be stabilizing.In addition to the new subscriber growth strategy, the company is an efficient operator with a five-year average ROIC of 24%. It also regularly buys back shares when it thinks the company is undervalued. Since IPO in 2014, 9.6% of shares issued have been repurchased with most being canceled.The company also has room to increase the amount of debt in its capital structure. At 3 times EBITDA, Link Net could raise debt by IDR5.5 trillion, which is just below its current market cap of IDR6 trillion.Trading on a EV/TTM EBIT of 5.8 times, Link Net is attractive at current valuations.

Link Net (LINK IJ) is a broadband and cable TV provider in Indonesia. It is undervalued under all scenarios with 54% upside to the 2021 fair value per share in bear case and 143% upside to the 2021 fair valuer per share in the base case.The company recently embarked on a new subscriber growth strategy, which so far has been successful. Over the past two quarters, Link Net added an average of 58,154 new subscribers per quarter. Over the previous five years, the average quarterly rate of new subscribers was 12,232. ARPU fell with the subscriber growth, but it seems to be stabilizing.In addition to the new subscriber growth strategy, the company is an efficient operator with a five-year average ROIC of 24%. It also regularly buys back shares when it thinks the company is undervalued. Since IPO in 2014, 9.6% of shares issued have been repurchased with most being canceled.The company also has room to increase the amount of debt in its capital structure. At 3 times EBITDA, Link Net could raise debt by IDR5.5 trillion, which is just below its current market cap of IDR6 trillion.Trading on a EV/TTM EBIT of 5.8 times, Link Net is attractive at current valuations.

Link Net (LINK:IJ)- New Subscriber Growth Strategy Working. The Company Is Undervalued.

United Kingdom

Liberty Global plc owns interests in broadband, distribution, and content companies operating outside the continental United States, principally in Europe, Asia, and Latin America.

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Liberty Global plc A (LBTYA US)

Liberty/Telenet: Re-Opening of Tender Offer

The offer is relatively cheap, but reflects the uncertainties surrounding Citymesh's entrance and market share losses. After the reopened period...

Jesus Rodriguez Aguilar

Liberty/Telenet: Opening of Acceptance Period

On 7 June, Telenet announced the publication of the prospectus. The Board of Directors of Telenet has prepared a response memorandum in which it...

Jesus Rodriguez Aguilar

Upgrading Communications, Downgrading Staples - Both to Market Weight; US Dollar Major Top

We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the $SPX 4100-4165 area. Upgrading...

Vermilion Research

Liberty Global: Securing Long-Term Competitive Advantages

Liberty Global has been a challenging name to hold through its years-long restructuring process. In spite of the disappointing returns, the...

Vladimir Dimitrov, CFA

Link Net (LINK:IJ)- New Subscriber Growth Strategy Working. The Company Is Undervalued.

Link Net is a growing, efficient cable operator that recently embarked on a new subscriber growth strategy. It is undervalued under all scenarios...

Reperio Capital

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Market Cap (USDm)

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Liberty/​​Telenet: Re-Opening of Tender Offer

The offer is relatively cheap, but reflects the uncertainties surrounding Citymesh's entrance and market share losses. After the reopened period...

Jesus Rodriguez Aguilar

Liberty/​Telenet: Opening of Acceptance Period

On 7 June, Telenet announced the publication of the prospectus. The Board of Directors of Telenet has prepared a response memorandum in which it...

Jesus Rodriguez Aguilar

Upgrading Communications, Downgrading Staples - Both to Market Weight; US Dollar Major Top

We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the $SPX 4100-4165 area. Upgrading...

Vermilion Research

Liberty Global: Securing Long-Term Competitive Advantages

Liberty Global has been a challenging name to hold through its years-long restructuring process. In spite of the disappointing returns, the...

Vladimir Dimitrov, CFA

Link Net (LINK:IJ)- New Subscriber Growth Strategy Working. The Company Is Undervalued.

Link Net is a growing, efficient cable operator that recently embarked on a new subscriber growth strategy. It is undervalued under all scenarios...

Reperio Capital

Liberty/Telenet: Re-Opening of Tender Offer

Liberty/Telenet: Opening of Acceptance Period