European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

ACS, Actividades de Construcción y Servicios / Event-Driven

ACS, Actividades de Construcción y Servicios

Florentino Pérez is known for its deal-making prowess (both as head of Real Madrid and chairman of ACS).
<ul>
<li>On 2 October ACS announced negotiations to sell its Industrial Services division to Vinci for €5.2 bn (now undergoing due diligence). </li>
<li>On October 19, ACS announced that CIMIC (subsidiary of Hochtief) had entered a sale agreement with Elliot for 50% of subsidiary Thiess.</li>
</ul>
Both transactions would add cash to the group, and all three companies, ACS, Hochtief and CIMIC could end 2020 debt-free. This is in contrast with ACS traditionally being high leveraged, which would reduce the risk profile of the group.
With the extraordinary income from the sale of Industrial services, ACS could increase the size of its concession area where the flagship is Abertis (shared with <a href="https://www.smartkarma.com/entities/atlantia-spa" target="_blank" data-smartkarma-citation="entities:21157:1" rel="noopener">Atlantia SpA (ATL IM)</a>, currently a distressed seller), or it could increase its stake in Hochtief, even could do a bit of both.
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ACS has been affected by the global crisis, and its value is well below the potential of its assets: its market cap is just 22% higher that what Vinci is willing to pay for half the business.
I see solid upside in ACS (and higher dividends), thus I recommend LONG ACS, target price €28.5 per share (applying a conservative 15% discount to my SOTP valuation), a 25% upside.
</div>

Florentino Pérez is known for its deal-making prowess (both as head of Real Madrid and chairman of ACS).

On 2 October ACS announced negotiations to sell its Industrial Services division to Vinci for €5.2 bn (now undergoing due diligence). 
On October 19, ACS announced that CIMIC (subsidiary of Hochtief) had entered a sale agreement with Elliot for 50% of subsidiary Thiess.

Both transactions would add cash to the group, and all three companies, ACS, Hochtief and CIMIC could end 2020 debt-free. This is in contrast with ACS traditionally being high leveraged, which would reduce the risk profile of the group.
With the extraordinary income from the sale of Industrial services, ACS could increase the size of its concession area where the flagship is Abertis (shared with Atlantia SpA (ATL IM), currently a distressed seller), or it could increase its stake in Hochtief, even could do a bit of both.

ACS has been affected by the global crisis, and its value is well below the potential of its assets: its market cap is just 22% higher that what Vinci is willing to pay for half the business.
I see solid upside in ACS (and higher dividends), thus I recommend LONG ACS, target price €28.5 per share (applying a conservative 15% discount to my SOTP valuation), a 25% upside.


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

Global equities are now breaking out to new highs amid positive technical developments -- something we noted was increasingly likely in last week’s Int’l Compass. These breakouts and other technical developments highlighted below argue that this is the beginning of a new leg higher. Now is the time to be playing offense. In today’s report we highlight our favorite setups within Industrials, spanning the Vermilion international Manufacturing, Services, and Transportation Sectors.

Global equities are now breaking out to new highs amid positive technical developments -- something we noted was increasingly likely in last week’s Int’l Compass. These breakouts and other technical developments highlighted below argue that this is the beginning of a new leg higher. Now is the time to be playing offense. In today’s report we highlight our favorite setups within Industrials, spanning the Vermilion international Manufacturing, Services, and Transportation Sectors.

Global Equity Strategy: Global Equities Beginning a New Leg Higher

Continue to favor EAFE over EM. As long as the U.S. dollar remains elevated, we believe  developed international (EAFE) will remain in a leadership position relative to EM (MSCI EM). In this report we highlight actionable set ups within Japan, Switzerland and Australia. Within Japanese Sectors, we focus on opportunities within Technology, Financials, Health Care, and Staples. We also highlight attractive setups within European/UK Sectors, including Health Care, Industrials, Staples and Utilities.

Continue to favor EAFE over EM. As long as the U.S. dollar remains elevated, we believe  developed international (EAFE) will remain in a leadership position relative to EM (MSCI EM). In this report we highlight actionable set ups within Japan, Switzerland and Australia. Within Japanese Sectors, we focus on opportunities within Technology, Financials, Health Care, and Staples. We also highlight attractive setups within European/UK Sectors, including Health Care, Industrials, Staples and Utilities.

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank Financials, Japanese Technology stocks, and within European Discretionary, Industrial, Health Care, and Staples sectors.

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank Financials, Japanese Technology stocks, and within European Discretionary, Industrial, Health Care, and Staples sectors.

Developed International Equity Strategy: Favor EAFE over EM

France

VINCI SA is a global player in concessions and construction with expertise in building, civil, hydraulic, and electrical engineering. The Company offers construction-related specialities and road materials production, as well as finance, management, operations and maintenance of public infrastructure such as motorways, airports, and road and rail infrastructures.

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Vinci SA (DG FP)

ACS: Unlocking Value Via Disposals

I see solid upside in ACS (and higher dividends), thus I recommend LONG ACS. My valuation is €28.5 per share (by applying a conservative 15%...

Jesus Rodriguez Aguilar

Overweight Global Technology & Industrials

In this report we highlight attractive and actionable themes within developed int’l markets: Technology and Industrials continue to be two of the...

Vermilion Research

Global Equity Strategy: Global Equities Beginning a New Leg Higher

Global equities are now breaking out to new highs amid positive technical developments -- something we noted was increasingly likely in last week’s...

Vermilion Research

Developed Markets Opportunities

Continue to favor EAFE over EM. As long as the U.S. dollar remains elevated, we believe developed international (EAFE) will remain in a leadership...

Vermilion Research

Developed International Equity Strategy: Favor EAFE over EM

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank...

Vermilion Research

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