Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

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<li>
Our Q3-2021 All Cap High-Risk screen of stocks produced a market-cap-weighted average price return of 2% and a simple average decline of 0.2%.</li>
<li>
Out of the 34 stocks that appeared in our Q3-2021 screen, 15 stocks saw an average share price decline of 11.5%, whilst 19 stocks appreciated on average by 14%. The two biggest declining stock  were down 25% and 19% respectively.</li>
<li>Our Q4 2021 screen, with 38 names (up from 34 seen in Q3 and Q2 2021) delivers an interesting composition this quarter, </li>
<li>
As in the previous few quarters, we anticipate the possibility of a risk of deteriorating credit metrics during the next few quarters: Q4 2021’s Altman Z score rests at 1.23, which is just up on Q3 2021’s level of 1.19.</li>
</ul>



Our Q3-2021 All Cap High-Risk screen of stocks produced a market-cap-weighted average price return of 2% and a simple average decline of 0.2%.

Out of the 34 stocks that appeared in our Q3-2021 screen, 15 stocks saw an average share price decline of 11.5%, whilst 19 stocks appreciated on average by 14%. The two biggest declining stock  were down 25% and 19% respectively.
Our Q4 2021 screen, with 38 names (up from 34 seen in Q3 and Q2 2021) delivers an interesting composition this quarter, 

As in the previous few quarters, we anticipate the possibility of a risk of deteriorating credit metrics during the next few quarters: Q4 2021’s Altman Z score rests at 1.23, which is just up on Q3 2021’s level of 1.19.


Screening the Silk Road: Q4 2021 High-Risk Names to Avoid

Thematic (Sector/Industry)

The risk remains apparent - but list reduced in number over Q2<ul>
<li>
Q1-2019 Small-Mid Cap High-Risk list of stocks ( <a href="https://www.smartkarma.com/insights/screening-the-silkroad-small-mid-cap-possible-high-risk-names-q1-2019" target="_blank" data-smartkarma-citation="insights:27812">Screening the Silkroad: Small-Mid Cap - Possible High-Risk Names: Q1 2019</a> ) delivered a market cap average price increase of 6%. In comparison, the MSCI Asia Pacific Index appreciated 5% over the same period.</li>
<li>Our screen looks for high valuation multiples presented by candidates with significant earnings growth forecasts, as well as financial indicators that suggest balance sheet distress.</li>
<li>
The Risk to this screen: The Financial and Utility sectors are not covered in this screen. Moreover, “risk is not a number, it is a concept or notion”, as cited by James Mortiner during his time at Société Genéralé. Hence, some stocks may appear on this screen due to their business model being realigned to a more profitable approach. They may also be a member of more positive value or quality screens, as a result of this realignment.</li>
<li>
17-stocks appear in our Q2 2019 screen, down from 26 in Q1 2019. Of which 8 are new to the list. India has increased its presence in the list, whilst Korea and Taiwan have reduced theirs. Singapore remains absent from the screen for the fourth quarter running, whilst New Zealand has no presence this quarter.</li>
<li>
Our screen continues to highlight that risk remains within the small-mid cap universe, as measured by the Altman Z score. Moreover, our average stock in the list has a ranking of 65.7, compared to 42.3 in Q1 2019, which is still highlighting mid-field ranking. These stocks traditionally perform in-line with the market at best.</li>
</ul>

The risk remains apparent - but list reduced in number over Q2

Q1-2019 Small-Mid Cap High-Risk list of stocks ( Screening the Silkroad: Small-Mid Cap - Possible High-Risk Names: Q1 2019 ) delivered a market cap average price increase of 6%. In comparison, the MSCI Asia Pacific Index appreciated 5% over the same period.
Our screen looks for high valuation multiples presented by candidates with significant earnings growth forecasts, as well as financial indicators that suggest balance sheet distress.

The Risk to this screen: The Financial and Utility sectors are not covered in this screen. Moreover, “risk is not a number, it is a concept or notion”, as cited by James Mortiner during his time at Société Genéralé. Hence, some stocks may appear on this screen due to their business model being realigned to a more profitable approach. They may also be a member of more positive value or quality screens, as a result of this realignment.

17-stocks appear in our Q2 2019 screen, down from 26 in Q1 2019. Of which 8 are new to the list. India has increased its presence in the list, whilst Korea and Taiwan have reduced theirs. Singapore remains absent from the screen for the fourth quarter running, whilst New Zealand has no presence this quarter.

Our screen continues to highlight that risk remains within the small-mid cap universe, as measured by the Altman Z score. Moreover, our average stock in the list has a ranking of 65.7, compared to 42.3 in Q1 2019, which is still highlighting mid-field ranking. These stocks traditionally perform in-line with the market at best.


Screening the Silkroad: Small-Mid Cap High-Risk Names to Avoid: Q2 2019

Taiwan

Shinkong Synthetic Fibers Corporation engages in the production and sale of polyester fibers and plastics primarily for the textile, food, packaging, electronics, and opto-electronics industries in Taiwan and internationally. The company also offers securities brokerage services through its subsidiaries.

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Shinkong Synthetic Fibers (1409 TT)

Screening the Silk Road: Q4 2021 High-Risk Names to Avoid

As we move through into Q1 2022, we expect to see volatility around highly priced & leveraged names. This screen is a key starting point towards...

David Lepper

Screening the Silkroad: Small-Mid Cap High-Risk Names to Avoid: Q2 2019

The risk remains apparent - but list reduced in number over Q2 Q1-2019 Small-Mid Cap High-Risk list of stocks ( Screening the Silkroad: Small-Mid...

David Lepper

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