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

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: China Vanke, Gajah Tunggal, ReNew Energy, Adani Green Energy, Bharti Airtel, UPL Limited</li>
<li>Treasuries fell yesterday, with yields up 1-3 bps across the curve following a soft auction of 20Y notes.</li>
<li>The yield on the 2Y UST rose 3 bps to 4.32%, while that on the 10Y UST was up 1 bp at 4.41%.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: China Vanke, Gajah Tunggal, ReNew Energy, Adani Green Energy, Bharti Airtel, UPL Limited
Treasuries fell yesterday, with yields up 1-3 bps across the curve following a soft auction of 20Y notes.
The yield on the 2Y UST rose 3 bps to 4.32%, while that on the 10Y UST was up 1 bp at 4.41%.


<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&amp;H), Yinson Production, Xiaomi Corp, ReNew Energy</li>
<li>In the US, October housing starts declined 3.1% m-o-m to an annualised 1.31 mn units (-1.5% e / -1.9% revised p), the slowest pace in three months as builders put off projects in the wake of hurricanes Helene and Milton.</li>
<li>Meanwhile, October building permits (a proxy for future construction) eased 0.6% m-o-m to an annualised 1.42 mn units.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&amp;H), Yinson Production, Xiaomi Corp, ReNew Energy
In the US, October housing starts declined 3.1% m-o-m to an annualised 1.31 mn units (-1.5% e / -1.9% revised p), the slowest pace in three months as builders put off projects in the wake of hurricanes Helene and Milton.
Meanwhile, October building permits (a proxy for future construction) eased 0.6% m-o-m to an annualised 1.42 mn units.


Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

Renewable Energy Group / Equity Bottom-Up

<ul>
<li>REGI being bought by CVX for $61.50 per share in cash</li>
<li>We believe the valuation of approximately $3 billion is high enough to deter another bidder from surfacing</li>
<li>At $61.50, REGI’s stock returned 265.4 percent since we initiated coverage on April 24, 2019, and 44.9 percent on a year-to-date basis</li>
</ul>


REGI being bought by CVX for $61.50 per share in cash
We believe the valuation of approximately $3 billion is high enough to deter another bidder from surfacing
At $61.50, REGI’s stock returned 265.4 percent since we initiated coverage on April 24, 2019, and 44.9 percent on a year-to-date basis


Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>REGI produces the wrong fuel mix.  REGI primarily sells the less attractive biodiesel (BD), instead of renewable diesel (RD).  Market share is shifting decisively towards RD</li>
<li>Industry RD capacity is slated to grow 5x over the next three years.  REGI will be forced to compete with the oil majors for markets and feedstocks. </li>
<li>REGI is completely dependent on subsidies.  REGI depends completely on incentives and subsidies for its profitability.  And, ultimately, electric and hydrogen win.</li>
</ul>


REGI produces the wrong fuel mix.  REGI primarily sells the less attractive biodiesel (BD), instead of renewable diesel (RD).  Market share is shifting decisively towards RD
Industry RD capacity is slated to grow 5x over the next three years.  REGI will be forced to compete with the oil majors for markets and feedstocks. 
REGI is completely dependent on subsidies.  REGI depends completely on incentives and subsidies for its profitability.  And, ultimately, electric and hydrogen win.


Renewable Energy Group (REGI):  Sell Short

<ul>
<li>This presentation runs through six current short ideas presented on a Smartkarma webinar on 22nd December.</li>
<li>These are:  Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and Renewable Fuels (REGI).</li>
<li>The presentation also summarizes Two Rivers' short idea generation process.</li>
</ul>


This presentation runs through six current short ideas presented on a Smartkarma webinar on 22nd December.
These are:  Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and Renewable Fuels (REGI).
The presentation also summarizes Two Rivers' short idea generation process.


United States

Renewable Energy Group Inc. produces biofuels and renewable chemicals. The Company develops, distributes, sells, and provides logistics for biodiesel and renewable chemical production. Renewable Energy Group serves companies throughout the United States.

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Renewable Energy Group (REGI US)

Lucror Analytics - Morning Views Asia

In today's Morning Views publication we comment on developments of the following high yield issuers: China Vanke, Gajah Tunggal, ReNew Energy,...

Lucror Analytics

Lucror Analytics - Morning Views Asia

In today's Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&H), Yinson Production,...

Lucror Analytics

REGI: Buyout! Dropping Coverage

We are dropping coverage after Chevron (CVX) agreed to purchase REGI for $61.50 per share in cash, premium that puts the stock up for the year.

BWS Financial Inc

Renewable Energy Group (REGI): Sell Short

Renewable Energy Group (REGI) is burdened with legacy capacity for less desirable product, faces stiff competition and is dependent on government...

Eric Fernandez, CFA

Review of Current Short Ideas

Current short ideas presented here: Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and...

Eric Fernandez, CFA

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