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

The Europe HY Trade Book for December 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for December 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - December 2020 - Lucror Analytics

The Europe HY Trade Book for November 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for November 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - November 2020 - Lucror Analytics

With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is becoming more visible. Several companies have already achieved solid recoveries in Q3, as reflected by their results. However, new government-imposed lockdowns will have a substantial impact on the Q4 numbers.  We believe it is useful to analyse how COVID-19 has impacted companies at the height of the pandemic in Q2/20. As such, we provide an overview of the development of credit stats and liquidity, followed by brief round-ups of the developments and outlooks in the industries and various companies that we cover.

  With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is becoming more visible. Several companies have already achieved solid recoveries in Q3, as reflected by their results. However, new government-imposed lockdowns will have a substantial impact on the Q4 numbers.    We believe it is useful to analyse how COVID-19 has impacted companies at the height of the pandemic in Q2/20. As such, we provide an overview of the development of credit stats and liquidity, followed by brief round-ups of the developments and outlooks in the industries and various companies that we cover. 

Europe HY – Q2/20 Results Review And Credit Metrics Amid COVID-19 - Lucror Analytics

The Europe HY Trade Book for October 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for October 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - October 2020 - Lucror Analytics

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<a href="https://www.smartkarma.com/entities/talktalk-telecom-group-plc" target="_blank" data-smartkarma-citation="entities:22175:1" rel="noopener">Talktalk Telecom (TALK LN)</a>  <a href="https://www.talktalkgroup.com/article/talktalkgroup/2020/Statement_regarding_possible_offer" target="_blank" rel="noopener">announced that it has received a preliminary and non-binding proposal</a> from Toscafund Asset Management LLP on behalf of funds advised by it.
Today TalkTalk has closed at 99p, which suggests that the Board has room to negotiate a higher offer price.
The current wave of deals in European telecoms seems to indicate that the sector is still undervalued, in spite of relatively resilient earnings.
Operating trends for the UK broadband market as a whole have been challenging over the past two years, but still, TalkTalk has c.4.2 mn broadband customers. 
Other than cash flow predictability, convergence in the UK (as in other European countries) is becoming increasingly important. The attractiveness of TalkTalk lies in the scale and being a potential target for the remaining two mobile operators that lack broadband customers.
Taking comps, a blended average of EV/Fwd Revenue, EV/Fwd EBITDA and Forward P/E provides an implied equity value of 130.6p per share of TalkTalk, which seems undemanding, in my view, and indicates that there is scope for negotiating a higher price. The premium offered does not represent a knock-out offer, c. 17%. Premia offered in the last telco deals have been around 30%
I recommend LONG TalkTalk at 99p. I believe an improved offer could come in the region of 108p (30% premium).

Talktalk Telecom (TALK LN)  announced that it has received a preliminary and non-binding proposal from Toscafund Asset Management LLP on behalf of funds advised by it.
Today TalkTalk has closed at 99p, which suggests that the Board has room to negotiate a higher offer price.
The current wave of deals in European telecoms seems to indicate that the sector is still undervalued, in spite of relatively resilient earnings.
Operating trends for the UK broadband market as a whole have been challenging over the past two years, but still, TalkTalk has c.4.2 mn broadband customers. 
Other than cash flow predictability, convergence in the UK (as in other European countries) is becoming increasingly important. The attractiveness of TalkTalk lies in the scale and being a potential target for the remaining two mobile operators that lack broadband customers.
Taking comps, a blended average of EV/Fwd Revenue, EV/Fwd EBITDA and Forward P/E provides an implied equity value of 130.6p per share of TalkTalk, which seems undemanding, in my view, and indicates that there is scope for negotiating a higher price. The premium offered does not represent a knock-out offer, c. 17%. Premia offered in the last telco deals have been around 30%
I recommend LONG TalkTalk at 99p. I believe an improved offer could come in the region of 108p (30% premium).

TalkTalk - Toscafund: Preliminary & Non-Binding Proposal

United Kingdom

TalkTalk Telecom Group PLC provides telecommunications services.  The Company provides fixed line communications services, serving residential and business-to-business customers in the United Kingdom.

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Talktalk Telecom (TALK LN)

Europe HY Trade Book - December 2020 - Lucror Analytics

The Europe HY Trade Book for December 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with...

Lucror Analytics

Europe HY Trade Book - November 2020 - Lucror Analytics

The Europe HY Trade Book for November 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with...

Lucror Analytics

Europe HY – Q2/20 Results Review And Credit Metrics Amid COVID-19 - Lucror Analytics

With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is...

Lucror Analytics

Europe HY Trade Book - October 2020 - Lucror Analytics

The Europe HY Trade Book for October 2020 includes high-conviction trade ideas drawn from our European HY coverage universe, along with...

Lucror Analytics

TalkTalk - Toscafund: Preliminary & Non-Binding Proposal

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Jesus Rodriguez Aguilar

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