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

<ul>
<li>TPL Summary Texas Pacific Land (TPL) reported third quarter results where a decline in daily production led to lower than expected oil and gas royalties.</li>
<li>The rate of production has always been the variable part of TPL’s results. In Q3 production levels were impacted by the summer heat in Texas causing abnormal electricity levels</li>
<li>TPL reported third quarter revenue of $158.0 million compared to our estimate of $178.7 million</li>
</ul>


TPL Summary Texas Pacific Land (TPL) reported third quarter results where a decline in daily production led to lower than expected oil and gas royalties.
The rate of production has always been the variable part of TPL’s results. In Q3 production levels were impacted by the summer heat in Texas causing abnormal electricity levels
TPL reported third quarter revenue of $158.0 million compared to our estimate of $178.7 million


<ul>
<li>TPL captured more water business in the second quarter than the Company had previously achieved leading to revenue and earnings exceeding our expectations</li>
<li>The water business has been a revenue source smoothing out the volatility associated with the movement in oil and gas prices and production levels</li>
<li>While TPL is not expecting to repeat second quarter levels in the third quarter, the water business should continue to perform better than previously expected</li>
</ul>


TPL captured more water business in the second quarter than the Company had previously achieved leading to revenue and earnings exceeding our expectations
The water business has been a revenue source smoothing out the volatility associated with the movement in oil and gas prices and production levels
While TPL is not expecting to repeat second quarter levels in the third quarter, the water business should continue to perform better than previously expected


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There are 3 changes for the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a>, 7 changes for the S&amp;P Midcap400 Index and 13 changes for the S&amp;P SmallCap600 Index at the June rebalance.</li>
<li>There is huge size to trade in <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co (KKR US)</a> and <a href="https://www.smartkarma.com/entities/crowdstrike-holdings-inc" target="_blank" data-smartkarma-citation="entities:28117:1" rel="noopener">Crowdstrike Holdings (CRWD US)</a> and both stocks were up big in the after-hours market.</li>
<li>There has been positioning in some stocks recently but stocks including <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co</a>, <a href="https://www.smartkarma.com/entities/rb-global-inc" target="_blank" data-smartkarma-citation="entities:25475:1" rel="noopener">RB Global</a> and <a href="https://www.smartkarma.com/entities/texas-pacific-land-corp" target="_blank" data-smartkarma-citation="entities:28693:1" rel="noopener">Texas Pacific Land</a> could see further positioning in the next week.</li>
</ul>


There are 3 changes for the S&amp;P 500 INDEX, 7 changes for the S&amp;P Midcap400 Index and 13 changes for the S&amp;P SmallCap600 Index at the June rebalance.
There is huge size to trade in KKR &amp; Co (KKR US) and Crowdstrike Holdings (CRWD US) and both stocks were up big in the after-hours market.
There has been positioning in some stocks recently but stocks including KKR &amp; Co, RB Global and Texas Pacific Land could see further positioning in the next week.


S&P500/400/600 Index Rebalance: Huge Size to Trade in a Few Stocks

<ul>
<li>TPL reported first quarter results that included a larger than normal legal expense crippling the Company’s net income in the period</li>
<li>TPL is disputing with its largest shareholder as to the voting agreement they have in place with them </li>
<li>Increase in non-oil and gas royalty revenue during a seasonally soft quarter leads us to expect outperformance over the next two quarters.</li>
</ul>


TPL reported first quarter results that included a larger than normal legal expense crippling the Company’s net income in the period
TPL is disputing with its largest shareholder as to the voting agreement they have in place with them 
Increase in non-oil and gas royalty revenue during a seasonally soft quarter leads us to expect outperformance over the next two quarters.


TPL: Free Cash Flow with Depressed Valuation

<ul>
<li>TPL reported fourth quarter revenue impacted by a trifecta of events. The decline in energy prices led to reduced production levels causing water sales to also decline in a period</li>
<li>TPL had been seeing production rebound in the summer of 2022. The volatility in energy prices in the Permian Basin pushed some producers to slow down their well development plans</li>
<li>The lower production was the biggest culprit to the decline in revenue as producers were not incentivized to produce oil and natural gas.</li>
</ul>


TPL reported fourth quarter revenue impacted by a trifecta of events. The decline in energy prices led to reduced production levels causing water sales to also decline in a period
TPL had been seeing production rebound in the summer of 2022. The volatility in energy prices in the Permian Basin pushed some producers to slow down their well development plans
The lower production was the biggest culprit to the decline in revenue as producers were not incentivized to produce oil and natural gas.


United States

APA Corporation operates as an oil and gas company. The Company focuses on exploration and production of oil and gas properties. APA serves clients worldwide.

Marathon Oil Corporation is an independent international energy company engaged in exploration and production, oil sands mining and integrated gas. The Company's operations are focused in North America, Africa and Europe.

EQT Corporation is an integrated energy company with emphasis on Appalachian area natural-gas supply, transmission and distribution. The Company, through its subsidiaries, offer natural gas products to wholesale and retail customers.

Coterra Energy Inc. operates as a diversified energy company. The Company develops of oil and natural gas with a focus on protecting and preserving air quality, water resources, and the land on which we operate. Coterra Energy serves clients in the United States.

Cheniere Energy Partners, L.P. is a provider of clean liquefied natural gas (LNG). The Company offers services such as developing, operating, and constructing natural gas liquefaction and regasification facilities, as well as pipelines and LNG terminals. Cheniere Energy Partners serves energy, utilities, and other trading companies worldwide.

Plains All American Pipeline, L.P. is involved in intrastate crude oil pipeline transportation and terminalling storage activities. The Partnership is also involved in gathering and marketing activities. Plains owns and operates a seasonally heated, common carrier crude oil pipe-line extending from CA to TX, and an oil gathering system in CA.

Plains All American Pipeline, L.P. (PAA US)

Ecopetrol SA is an integrated oil company. The Company owns interests in  oil producing fields in the central area, south, west and north of Colombia as well as refineries, ports for fuel exports and imports on both coasts and the transportation network of pipelines and polyducts throughout the Colombian territory.

Magellan Midstream Partners, L.P. is primarily involved in the storage, transportation, and distribution of refined petroleum products and ammonia.  The Company's asset portfolio includes a pipe line system serving the mid-continent region of the United States, petroleum products marine terminal facilities, petroleum products terminals, and an ammonia pipeline system.

Western Midstream Partners, LP (WES) acquires, owns, develops, and operates midstream energy assets. The Company engages in gathering, compressing, treating, processing, and transporting natural gas and crude oil. WES serves customers in the State of Texas.

Range Resources Corporation is an independent oil and gas company  that explore, develops, and acquires oil and gas properties. The Company conducts operations primarily in the Southwestern, Appalachian and Gulf Coast regions of the United States.

PTT Public Company Limited operates as an oil and gas company. The Company produces, transports, and sells natural gas, crude oil, lubricants, aviation and marine, and petrochemical products. PTT offers fleet cards, storage, electronic bill presentment, and other related services. PTT serves customers in Thailand.

PTT Exploration and Production Public Company Limited explores for crude oil and natural gas, develops fields for production, and produces oil and natural gas. The Company is a subsidiary of the Petroleum Authority of Thailand.

China Petroleum & Chemical Corporation produces and trades petroleum and petrochemical products. The Company offers gasoline, diesel, jet fuel, kerosene, ethylene, synthetic fibers, synthetic rubber, synthetic resins, and chemical fertilizers. China Petroleum & Chemical markets its products throughout China.

ENEOS Holdings, Inc. operates refining and marketing businesses. The Company refines and distributes petroleum and petroleum chemical products. ENEOS Holdings also provides non ferrous metals, electronic materials, and other products.

Santos Limited explores for and produces natural gas, crude oil, condensate, naphtha and liquid petroleum gas.  The Company conducts major onshore and offshore petroleum exploration activities at oil and gas fields in Australia (Cooper/Eromanga Basins), the United States (Gulf of Mexico), Indonesia and Papua New Guinea. The Company also transports crude oil by pipeline.

Origin Energy Limited is an integrated energy company. The Company is an energy retailer in Australia across electricity, gas and LPG. Origin Energy also holds a generation portfolio and fuel position and a renewable energy portfolio, as well as unconventional gas and LNG interests.

Bharat Petroleum Corporation Limited explores for and refines crude oil. The Company manufactures petroleum, petroleum products, lubricants, liquefied petroleum gas, aromatics like benzene and toluene, and other related products. Bharat has retail outlets throughout the country.

INPEX CORPORATION is a holding company established through the reorganization of INPEX Corp and Teikoku Oil.  The Company manages subsidiaries that explores, produces, and sells oil and natural gas.

Formosa Petrochemical Corp. refines crude oil and markets petroleum and petrochemical products.  The Company operates refineries and naphtha cracking plants that provide products such as gasoline, diesel, jet fuel, fuel oil, naphtha, ethylene, and liquefied petroleum gas.  FPCC also owns three utility centers and generates electricity.

Repsol S.A., through subsidiaries, explores for and produces crude oil and natural gas, refines petroleum, and transports petroleum products and liquefied petroleum gas (LPG).  The Company retails gasoline and other products through its chain of gasoline filling stations.  Repsol's petroleum reserves are in Spain, Latin America, Asia, North Africa, and the Middle East and United States.

Texas Pacific Land Corporation owns tracts of land in Texas, previously the property of the Texas and Pacific Railway Co. The Trust issues transferable certificates of proprietary interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Co. Texas's income is derived from land sales, oil and gas royalties, grazing leases, and interest.

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Texas Pacific Land (TPL US)

TPL: Collecting Cash Looking to 2024

Third quarter daily production was below our forecast due to electricity issues during the summer heat wave in Texas. Looking forward to 2024,...

BWS Financial Inc

TPL: Not Just Oil and Gas Story Anymore

Non-oil and gas revenue is nearly 50 percent of total revenue creating a business model that has effectively hedged the volatility related to...

BWS Financial Inc

S&P500/400/600 Index Rebalance: Huge Size to Trade in a Few Stocks

KKR, Crowdstrike and GoDaddy will be added to the SP500 at the close on 21 June. There are a bunch of changes for the SP400/600 indices too. There...

Brian Freitas

TPL: Free Cash Flow with Depressed Valuation

TPL was able to offset the decline in oil and natural gas royalties with revenue growth in its other business segments. However, legal expenses...

BWS Financial Inc

TPL: Cash Cushion

The trifecta of events in the fourth quarter led to TPL missing our expectations while adding to its cash balance. Production levels should...

BWS Financial Inc

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