Alpha-Centric ESG Research

Kyle Rudden

Here it comes, the David-and-Goliath metaphor. Cliché is an understatement, but who cares – it is a most fitting allegory for the epic proxy battle between a diminutive activist investor you've never heard of and a "Big Oil" Behemoth that you know all too well... <a href="https://www.smartkarma.com/entities/exxon-mobil-corp" target="_blank" data-smartkarma-citation="entities:811:1" rel="noopener">Exxon Mobil (XOM US)</a>.Guess who won?Well, that depends on perspective. The activist hedge fund (Engine No. 1) gained three Board seats so one could certainly say that Engine won. As did the shareholders that backed Engine in its proxy (BlackRock, Vanguard, State Street, CalPERS, CalSTRS). But the biggest winner of all?Planet Earth.Engine's improbable win – in conjunction with similar (albeit less spectacular) shareholder actions at other supermajors – appears to signify a seismic shift in how Big Oil's shareholders view climate change, and could portend real change (e.g., accelerated decarbonisation and better reporting).

Here it comes, the David-and-Goliath metaphor. Cliché is an understatement, but who cares – it is a most fitting allegory for the epic proxy battle between a diminutive activist investor you've never heard of and a "Big Oil" Behemoth that you know all too well... Exxon Mobil (XOM US).Guess who won?Well, that depends on perspective. The activist hedge fund (Engine No. 1) gained three Board seats so one could certainly say that Engine won. As did the shareholders that backed Engine in its proxy (BlackRock, Vanguard, State Street, CalPERS, CalSTRS). But the biggest winner of all?Planet Earth.Engine's improbable win – in conjunction with similar (albeit less spectacular) shareholder actions at other supermajors – appears to signify a seismic shift in how Big Oil's shareholders view climate change, and could portend real change (e.g., accelerated decarbonisation and better reporting).

Engine Versus Exxon: Activist Hedge Fund's Proxy Fight Win Reverberates Through "Big Oil" Boardrooms

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

Oil & Natural Gas Corp / Technical Analysis

Below we lay out what we believe is a compelling case to add exposure to global Energy stocks at current levels. Stocks Highlighted: 500312-IN (ONGC-IN), 135-HK, FP-FR, EQNR-NO, TEN-IT, EOG-US, HES-US, OVV-US, XEC-US, FANG-US, MPC-US, CHX-US, DVN-US, VET-US, and CLR-US

Below we lay out what we believe is a compelling case to add exposure to global Energy stocks at current levels. Stocks Highlighted: 500312-IN (ONGC-IN), 135-HK, FP-FR, EQNR-NO, TEN-IT, EOG-US, HES-US, OVV-US, XEC-US, FANG-US, MPC-US, CHX-US, DVN-US, VET-US, and CLR-US

Global Energy Stocks Are Breaking Out -- Buy

EURO STOXX 50 Price EUR / Technical Analysis

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Rex International Holding / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/rex-international-holding" target="_blank" data-smartkarma-citation="entities:17074:1" rel="noopener">Rex International Holding (REXI SP)</a> has been a forgotten oil stock on the SGX. Last year we tried to highlight the opportunity to investors already <a href="https://www.smartkarma.com/insights/rex-int-from-virtual-drilling-tech-play-to-pumping-oil-in-oman-overlooked-bargain-m-a-candidate" target="_blank" data-smartkarma-citation="insights:41575" rel="noopener">Rex Int: From Virtual Drilling Tech Play to Pumping Oil in Oman; Overlooked Bargain + M&amp;A Candidate</a>.As we learned with our bullish drumbeat on <a href="https://www.smartkarma.com/entities/ug-healthcare-corp-ltd" target="_blank" data-smartkarma-citation="entities:254:1" rel="noopener">UG Healthcare (UGHC SP)</a> a few years ago sometimes Mr. Market can be a bit slow. Recall, we were bullish on UGHC all of 2018/2019 highlighting its massive undervaluation, and then... it went up 1,000%+ last year. Rex reminds us of UGHC in 2019. Rex is not guaranteed to go up 1,000% but it has a pathway there (think oil at 100 USD/bbl) and should AT LEAST double in 2021. This is a high conviction idea.Below the fold, we give the math of how increased production at its Yumna field in Oman should lead to massive cash flows and earnings from 1H21 onwards. Once market participants "get it" and see the cash gush in this has to lead to a re-rating. If Mr.Market remains asleep an industry player will almost certainly come to the table and acquire Rex outright. Given the age of the main shareholders, this is more a question of "when" rather than "if".

Rex International Holding (REXI SP) has been a forgotten oil stock on the SGX. Last year we tried to highlight the opportunity to investors already Rex Int: From Virtual Drilling Tech Play to Pumping Oil in Oman; Overlooked Bargain + M&amp;A Candidate.As we learned with our bullish drumbeat on UG Healthcare (UGHC SP) a few years ago sometimes Mr. Market can be a bit slow. Recall, we were bullish on UGHC all of 2018/2019 highlighting its massive undervaluation, and then... it went up 1,000%+ last year. Rex reminds us of UGHC in 2019. Rex is not guaranteed to go up 1,000% but it has a pathway there (think oil at 100 USD/bbl) and should AT LEAST double in 2021. This is a high conviction idea.Below the fold, we give the math of how increased production at its Yumna field in Oman should lead to massive cash flows and earnings from 1H21 onwards. Once market participants "get it" and see the cash gush in this has to lead to a re-rating. If Mr.Market remains asleep an industry player will almost certainly come to the table and acquire Rex outright. Given the age of the main shareholders, this is more a question of "when" rather than "if".

Rex: Oman Production Gaining Steam; Could It Really Trade at 1x 2021 Pre-Tax Profits?

In <a href="https://www.smartkarma.com/insights/delisting-deceitful-chinese-companies-act-not-a-slam-dunk-and-has-more-bark-than-bite-if-it-passes" target="_blank" data-smartkarma-citation="insights:40025" rel="noopener">"Delisting Deceitful Chinese Companies Act" Not a Slam Dunk and Has More Bark Than Bite if It Passes</a>, I made three "predictions." First, the U.S. House of Representatives would not get around to voting on the "delisting act" before the end of the Congressional session. Second, if the House does vote, it would likely pass the bill. Third, if the bill passes, it would have more bark than bite.As a bloke called Meat Loaf once sung, "two out of three ain't bad."On Wednesday, the House voted and passed Senate Bill 945, titled the "Holding Foreign Companies Accountable Act." That the House managed to vote amidst the dual chaos of a raging pandemic and an unhinged President – so close to adjourning this 116th Congress – is a surprise. That it voted to pass S945 is not at all surprising, however, given widespread bi-partisan support for the bill.The real epiphany comes from additional details provided during House testimony just prior to the vote. Not many, but those details that were disclosed (plus the tone in which they were articulated) shed light on how S945 will be implemented and enforced by the SEC, and why foreign issuers and investors should duly-cautious but not overly-concerned. And why this "delisting bill" is ...... more bark than bite.This Insight presents an updated analysis of S945 (general and China/Hong Kong-specific aspects), shares new details provided by Representative Brad Sherman, offers an opinion on the SEC's likely approach to writing and enforcing S945 rules, analyses China/Hong Kong stocks most at risk under S945, and stocks affected by the France/Belgium angle (similar to China/Hong Kong).

In "Delisting Deceitful Chinese Companies Act" Not a Slam Dunk and Has More Bark Than Bite if It Passes, I made three "predictions." First, the U.S. House of Representatives would not get around to voting on the "delisting act" before the end of the Congressional session. Second, if the House does vote, it would likely pass the bill. Third, if the bill passes, it would have more bark than bite.As a bloke called Meat Loaf once sung, "two out of three ain't bad."On Wednesday, the House voted and passed Senate Bill 945, titled the "Holding Foreign Companies Accountable Act." That the House managed to vote amidst the dual chaos of a raging pandemic and an unhinged President – so close to adjourning this 116th Congress – is a surprise. That it voted to pass S945 is not at all surprising, however, given widespread bi-partisan support for the bill.The real epiphany comes from additional details provided during House testimony just prior to the vote. Not many, but those details that were disclosed (plus the tone in which they were articulated) shed light on how S945 will be implemented and enforced by the SEC, and why foreign issuers and investors should duly-cautious but not overly-concerned. And why this "delisting bill" is ...... more bark than bite.This Insight presents an updated analysis of S945 (general and China/Hong Kong-specific aspects), shares new details provided by Representative Brad Sherman, offers an opinion on the SEC's likely approach to writing and enforcing S945 rules, analyses China/Hong Kong stocks most at risk under S945, and stocks affected by the France/Belgium angle (similar to China/Hong Kong).

House Passes "Delisting Act" Giving SEC 90 Days to Write Its Rules (And Yes, More Bark Than Bite)

France

TOTAL S.A. explores for, produces, refines, transports, and markets oil and natural gas. The Company also operates a chemical division which produces polypropylene, polyethylene, polystyrene, rubber, paint, ink, adhesives, and resins. TOTAL operates gasoline filling stations in Europe, the United States, and Africa.

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TotalEnergies (TTE FP)

Engine Versus Exxon: Activist Hedge Fund's Proxy Fight Win Reverberates Through "Big Oil" Boardrooms

May 26, 2021. Black Wednesday. A day that changed Big Oil forever. From Exxon's proxy fight loss to an activist fund you've never heard of, to...

Kyle Rudden

Global Energy Stocks Are Breaking Out -- Buy

In today's report we lay out what we believe is a compelling case to add exposure to global Energy stocks at current levels.

Vermilion Research

Major Breakout For EURO STOXX 50

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

Rex: Oman Production Gaining Steam; Could It Really Trade at 1x 2021 Pre-Tax Profits?

Rex is a misunderstood oil company trading on SGX. Our calculations show the stock could be trading at +/- 1x 2021 pre-tax profits. There is wild...

Nicolas Van Broekhoven

House Passes "Delisting Act" Giving SEC 90 Days to Write Its Rules (And Yes, More Bark Than Bite)

The U.S. House of Representatives passed Senate Bill 945, the "Holding Foreign Companies Accountable Act." New details support the notion that S945...

Kyle Rudden

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