European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 24 April, <a href="https://www.smartkarma.com/entities/leonardo-spa" target="_blank" data-smartkarma-citation="entities:21190:1" rel="noopener">Leonardo SpA (LDO IM)</a> <a href="https://www.leonardocompany.com/en/press-release-detail/-/detail/24-04-2021-leonardo-acquista?f=%2Finvestors" target="_blank" rel="noopener">agreed to acquire</a> a 25.1% stake in <a href="https://www.smartkarma.com/entities/hensoldt-ag" target="_blank" data-smartkarma-citation="entities:33024:1" rel="noopener">Hensoldt AG (HAG GR)</a>  from KKR for €23 per share.<ul>
<li>For an implied equity value of €2,415 mn and an implied EV of €2,980 mn.</li>
<li>The consideration represents 1.6x EV/Fwd Revenue, 9.9x EV/Fwd EBITDA and 21.2x Fwd P/E.</li>
</ul>This follows conversations with other firms with interests in defence, which included <a href="https://www.smartkarma.com/entities/indra-sistemas-sa" target="_blank" data-smartkarma-citation="entities:21277:1" rel="noopener">Indra Sistemas Sa (IDR SM)</a>, Leonardo, <a href="https://www.smartkarma.com/entities/saab-ab" target="_blank" data-smartkarma-citation="entities:22469:1" rel="noopener">Saab AB (SAABB SS)</a> and <a href="https://www.smartkarma.com/entities/thales-sa" target="_blank" data-smartkarma-citation="entities:21483:1" rel="noopener">Thales SA (HO FP)</a>.Leonardo seeks to increase the defence electronics business and access new European defence programs. Both Hensoldt and Leonardo have co-operated on the Eurofighter and this tie-up will allow them to gain critical mass vs. other European champions such as Dassault and Thales.The German government has a golden share in the company, which allows the German government to block strategic decisions.KKR has succeeded in extracting value from its investment: from €12/share upon listing to €17.07/share in the 25.1% sale to KfW and now €23/share in this 25.1% sale to Leonardo. KKR retains c.18% of Hensoldt.On 23 April, Hensoldt closed at €15.58. Upon opening of the market on 26 April, expect Hensoldt to increase to levels c. €23 per share.Recommendation is long Hensoldt, TP €24.6 (implied EV/Fwd EBITDA valuation from comparables), c. 7% upside to the price agreed between KKR and Leonardo.

On 24 April, Leonardo SpA (LDO IM) agreed to acquire a 25.1% stake in Hensoldt AG (HAG GR)  from KKR for €23 per share.
For an implied equity value of €2,415 mn and an implied EV of €2,980 mn.
The consideration represents 1.6x EV/Fwd Revenue, 9.9x EV/Fwd EBITDA and 21.2x Fwd P/E.
This follows conversations with other firms with interests in defence, which included Indra Sistemas Sa (IDR SM), Leonardo, Saab AB (SAABB SS) and Thales SA (HO FP).Leonardo seeks to increase the defence electronics business and access new European defence programs. Both Hensoldt and Leonardo have co-operated on the Eurofighter and this tie-up will allow them to gain critical mass vs. other European champions such as Dassault and Thales.The German government has a golden share in the company, which allows the German government to block strategic decisions.KKR has succeeded in extracting value from its investment: from €12/share upon listing to €17.07/share in the 25.1% sale to KfW and now €23/share in this 25.1% sale to Leonardo. KKR retains c.18% of Hensoldt.On 23 April, Hensoldt closed at €15.58. Upon opening of the market on 26 April, expect Hensoldt to increase to levels c. €23 per share.Recommendation is long Hensoldt, TP €24.6 (implied EV/Fwd EBITDA valuation from comparables), c. 7% upside to the price agreed between KKR and Leonardo.

Leonardo/Hensoldt: Acquisition of Controlling Stake

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

After Japan's earthquake automobile makers had a lot to worry about, since they were already faced with critical semiconductor shortages.  Now unusually bad weather has hit much of the US, and has stopped chip production in three important fabs in Austin, Texas.  This Insight explores the winners and losers in this series of events.

After Japan's earthquake automobile makers had a lot to worry about, since they were already faced with critical semiconductor shortages.  Now unusually bad weather has hit much of the US, and has stopped chip production in three important fabs in Austin, Texas.  This Insight explores the winners and losers in this series of events.

Texas Weather Deals Second Blow to Automotive Chip Supply Chain

Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.

Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.

Japan Quake and Chip Shortages, Tough on Auto?

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

TSE Tokyo Price Index TOPIX / Technical Analysis

In this report we highlight attractive and actionable themes within developed int’l markets: Technology and Industrials continue to be two of the most attractive Sectors globally -- overweight. These two Sectors account for half of today’s individual recommendations Countries that are (1) developing positively in terms of price and RS and (2) have significant representation in this report include: Japan (TOPIX), Switzerland (SMI), and France (CAC 40).Outside of the above themes, a bottoms-up approach is required to uncover attractive and actionable stocks. On page 4 we include a table of all stocks highlighted in this report.

In this report we highlight attractive and actionable themes within developed int’l markets: Technology and Industrials continue to be two of the most attractive Sectors globally -- overweight. These two Sectors account for half of today’s individual recommendations Countries that are (1) developing positively in terms of price and RS and (2) have significant representation in this report include: Japan (TOPIX), Switzerland (SMI), and France (CAC 40).Outside of the above themes, a bottoms-up approach is required to uncover attractive and actionable stocks. On page 4 we include a table of all stocks highlighted in this report. 

Overweight Global Technology & Industrials

Our outlook remains neutral for global ex-U.S. markets while horizontal consolidation continues on the MSCI ACWI ex-U.S. index.  In today’s report we take a bottoms-up view on developed ex-U.S. equities, highlighting stocks that present attractive buy opportunities within the Communications, Health Care, Manufacturing, Materials, Technology, Transportation, and Utilities Sectors

Our outlook remains neutral for global ex-U.S. markets while horizontal consolidation continues on the MSCI ACWI ex-U.S. index.  In today’s report we take a bottoms-up view on developed ex-U.S. equities, highlighting stocks that present attractive buy opportunities within the Communications, Health Care, Manufacturing, Materials, Technology, Transportation, and Utilities Sectors

Bottoms-Up View on Developed Markets: Actionable Stocks, Part 2

Sweden

Saab AB is a high technology company.  The Company develops, manufactures, and delivers advanced products for the defense market.  Saab's operations include defense technology, command and control systems, military and commercial aircraft, and technical services, as well as missiles, space equipment, and aviation services.  The Company sells and markets its products internationally.

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Saab AB (SAABB SS)

Leonardo/Hensoldt: Acquisition of Controlling Stake

On 23 April, Hensoldt closed at €15.58. Upon opening on 26 April, expect share price to increase to c. €23 per share. On an EV/Fwd EBITDA basis,...

Jesus Rodriguez Aguilar

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A chip shortage is preventing the automotive industry from returning to full volume. Meanwhile Japan's earthquake and bad weather in Texas are...

Jim Handy

Japan Quake and Chip Shortages, Tough on Auto?

Will Saturday's Japan earthquake further disrupt the semiconductor supply chain? Early reports seem tame enough, but automobile manufacturers are...

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Overweight Global Technology & Industrials

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Vermilion Research

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Our outlook remains neutral for global ex-U.S. markets while horizontal consolidation continues on the MSCI ACWI ex-U.S. index. In today’s report...

Vermilion Research

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