TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

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<p>As we head into earnings next week, we note attractive setups for Snap and Microsoft from data that came out this week, along with a very bullish presentation at Crowdstrike's user conference.</p>
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<p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p>
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As we head into earnings next week, we note attractive setups for Snap and Microsoft from data that came out this week, along with a very bullish presentation at Crowdstrike's user conference.




Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.




TMT Weekly:  3 Things that Stood Out The Week of 10/16/​​​​2020

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p>Bloomberg reported today that Roblox had filed confidentially for a public offering targeting a valuation of $8bn, roughly double the reported $4bn valuation at which it raised $150m in a series G that involved Andreesen Horowitz and Tencent. Below, we examine the company’s product and business model.</p>

Bloomberg reported today that Roblox had filed confidentially for a public offering targeting a valuation of $8bn, roughly double the reported $4bn valuation at which it raised $150m in a series G that involved Andreesen Horowitz and Tencent. Below, we examine the company’s product and business model.

Roblox IPO Preview – Unique Positioning

<p>This week, Third Point's Dan Loeb wrote a letter to Disney urging it to spend more on content. We agree. Disney's stock has languished this year due to the havoc COVID has unleashed on its business model. Longer term, we think Disney's streaming service could be worth more then the stock today. </p><p></p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

This week, Third Point's Dan Loeb wrote a letter to Disney urging it to spend more on content. We agree. Disney's stock has languished this year due to the havoc COVID has unleashed on its business model. Longer term, we think Disney's streaming service could be worth more then the stock today. Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

<p>Our thesis on Sony and the PS5 has emphasised that their approach to next gen emphasising the SSD would address consumer pain points better than Microsoft’s strategy. New information regarding Sony’s licencing of compression technology called Oodle from RAD Game Tools suggests that even the Xbox Series X’s edge in TFLOPS could become irrelevant.</p>

Our thesis on Sony and the PS5 has emphasised that their approach to next gen emphasising the SSD would address consumer pain points better than Microsoft’s strategy. New information regarding Sony’s licencing of compression technology called Oodle from RAD Game Tools suggests that even the Xbox Series X’s edge in TFLOPS could become irrelevant.

Sony – PS5’s SSD Is “Oodles” Faster and This Makes Series X’s Graphics Edge Irrelevant

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

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<li>Performance between US Value funds and Aggressive Growth funds has diverged over the last decade, with 2020 seeing an acceleration of the trend.</li>
<li>The difference in performance is down to their vastly different portfolios, with Value funds heavily reliant on Financials and Health Care stocks and Aggressive Growth funds heavily exposed to Tech and Communication Services. </li>
<li>However, there is some overlap.  There are a number of stocks that appear to offer something for both Value and Growth investors, including <a href="https://www.smartkarma.com/entities/visa-inc-class-a-shares" target="_blank" data-smartkarma-citation="entities:8707:1" rel="noopener">Visa Inc Class A Shares (V US)</a>, <a href="https://www.smartkarma.com/entities/lowe-s-companies-inc" target="_blank" data-smartkarma-citation="entities:4156:1" rel="noopener">Lowe's Companies Inc (LOW US)</a> and <a href="https://www.smartkarma.com/entities/schwab-charles-corp" target="_blank" data-smartkarma-citation="entities:13610:1" rel="noopener">Schwab (Charles) (SCHW US)</a> </li>
<li>In this analysis, we explore a portfolio that combines stocks that are owned by more than 10% of both the Value funds and Aggressive Growth funds in our analysis.  </li>
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Performance between US Value funds and Aggressive Growth funds has diverged over the last decade, with 2020 seeing an acceleration of the trend.
The difference in performance is down to their vastly different portfolios, with Value funds heavily reliant on Financials and Health Care stocks and Aggressive Growth funds heavily exposed to Tech and Communication Services. 
However, there is some overlap.  There are a number of stocks that appear to offer something for both Value and Growth investors, including Visa Inc Class A Shares (V US), Lowe's Companies Inc (LOW US) and Schwab (Charles) (SCHW US) 
In this analysis, we explore a portfolio that combines stocks that are owned by more than 10% of both the Value funds and Aggressive Growth funds in our analysis.  


US Value Vs Growth:  The Goldilocks Portfolio

United States

Microsoft Corporation operates as a software company. The Company offers applications, extra cloud storage, and advanced security solutions. Microsoft serves customers worldwide.

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Microsoft Corp (MSFT US)

TMT Weekly: 3 Things that Stood Out The Week of 10/16/2020

Datapoints supportive of upside to earnings for Microsoft and Snapchat this past week, plus an ever expanding TAM justifies Crowdstrike's valuation.

Aaron Gabin

Roblox IPO Preview – Unique Positioning

We preview the upcoming listing of minigame sandbox Roblox whose closest peers Minecraft and Fortnite underline its potential, but it is Roblox's...

Mio Kato

Disney: Listen to Loeb

Disney's stock has languished this year due to the havoc COVID has unleashed on its business model. It should use the opportunity to spend more on...

Aaron Gabin

Sony – PS5’s SSD Is “Oodles” Faster and This Makes Series X’s Graphics Edge Irrelevant

Our thesis on Sony and the PS5 has emphasised that their approach to next gen emphasising the SSD would address consumer pain points better than...

Mio Kato

US Value Vs Growth: The Goldilocks Portfolio

Performance between US Value funds andtwo groups has diverged over the last decade, with 2020 seeing an acceleration of the trend.

Steven Holden

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

TMT Weekly: 3 Things that Stood Out The Week of 10/16/​​​​2020

Datapoints supportive of upside to earnings for Microsoft and Snapchat this past week, plus an ever expanding TAM justifies Crowdstrike's valuation.

Aaron Gabin

Roblox IPO Preview – Unique Positioning

We preview the upcoming listing of minigame sandbox Roblox whose closest peers Minecraft and Fortnite underline its potential, but it is Roblox's...

Mio Kato

Disney: Listen to Loeb

Disney's stock has languished this year due to the havoc COVID has unleashed on its business model. It should use the opportunity to spend more on...

Aaron Gabin

Sony – PS5’s SSD Is “Oodles” Faster and This Makes Series X’s Graphics Edge Irrelevant

Our thesis on Sony and the PS5 has emphasised that their approach to next gen emphasising the SSD would address consumer pain points better than...

Mio Kato

US Value Vs Growth: The Goldilocks Portfolio

Performance between US Value funds andtwo groups has diverged over the last decade, with 2020 seeing an acceleration of the trend.

Steven Holden

TMT Weekly: 3 Things that Stood Out The Week of 10/16/2020