Daily Briefs

• The review period for the September rebalance ends 31 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
• We forecast 6 changes for the index, including migrations between the STAR100 Index and the STAR50 INDEX. There is uncertainty for a few adds given profitability (or lack of it). 
• The outright potential adds have outperformed the outright potential deletes since the start of the calendar year with 12% outperformance in just the last 3 weeks.

• Fanuc reported slightly better-than-expected Q1 sales and OP forecasts, mainly due to a recovery in sales of FA equipment
• Fanuc’s results are consistent with a bottoming out of Japan’s machine tool orders in the first half of the year
• We turn bullish on the stock given the cyclical bottoming out of orders and margins. However, the stock is still not “cheap” and the company faces a number of challenges

• According to daily Expansion, Ganz MaVag plans to reserve part of Talgo SA (TLGO SM)‘s share capital for one or more Spanish partners chosen by the Spanish Government. 
• Uncertainty over the approval process has lowered the price to €4.31, given the low likelihood of counteroffers and the uncertainty of a potentially prolonged process.
• Gross spread is 13.8%, indicating uncertainty regarding timeline and development. The market is pricing a 39% probability of deal completion. Recommendation is sell on strength.

• Enphase Energy reported solid financial outcomes for the second quarter of 2024, driven by robust demand for its products and effective inventory management.
• The company achieved a revenue of $303.5 million, reflecting shipments of approximately 1.4 million microinverters and 120 megawatt-hours of batteries.
• This performance was supported by an overall end market demand valued at around $396 million for the quarter.

• Overall, June container throughput growth and average container rates strong
• But spot rates have begun to wobble recently, and 2025 uncertainty grows
• We have decided to close our suggested container shipping pair trade 

• WM presented its financial outcomes for the second quarter of 2024, underscoring a period of significant operational strength and strategic alignment towards its long-term growth objectives.
• WM reported a historical high with a 30% operating EBITDA margin, driven by efficiencies from technological investments and a robust pricing strategy.
• The company’s commitment to leveraging its expertise across various platforms was evident, particularly with its planned acquisition of Stericycle, which is expected to complement and expand its service offerings in the medical waste industry.

Metlen Energy & Metals achieved a record H1 EBITDA of €474m in 2024 (vs €437m in H123), while also increasing its operating margin by 169bp to 19.1% (17.4% at H123). Revenue declined marginally (-1% to €2,482m) but Metlen’s diversified and synergistic business model across the energy and metals sectors is helping to grow its margins and diversity of earnings (towards RES/Utility/Metals and away from volatile natural gas supply). Both net profit after minorities and earnings per share increased by c 5% y-o-y to €282m and €2.04, respectively. Net debt/EBITDA is a comfortable 1.76x and Metlen looks well placed for a potential upgrade to investment grade status by the rating agencies later this year, achieving its goal.

• Revenue increased by JPY5.1bn (+2.9% YoY), driven by growth in the Furniture and Stationery Businesses.
• Operating profit declined by JPY97mn (-0.6% YoY) due to lower profit in the Interior Retail business and increased adjustments.
• Gross profit margin rose to 39.9%, while the SG&A expense ratio increased to 31.1% due to strategic spending.

• General Dynamics recently presented their second quarter 2024 financial results, reflecting notable growth across their business segments with some operational challenges specifically in their Aerospace division.
• This analysis delves into both the positive outcomes and areas of concern from their performance to provide a balanced investment perspective.
• Starting with their strengths, General Dynamics displayed robust revenue increases across all their four business segments, highlighting an 18% overall growth.

• The review period for the September rebalance ends 31 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
• We forecast 6 changes for the index, including migrations between the STAR100 Index and the STAR50 INDEX. There is uncertainty for a few adds given profitability (or lack of it). 
• The outright potential adds have outperformed the outright potential deletes since the start of the calendar year with 12% outperformance in just the last 3 weeks.

• Fanuc reported slightly better-than-expected Q1 sales and OP forecasts, mainly due to a recovery in sales of FA equipment
• Fanuc’s results are consistent with a bottoming out of Japan’s machine tool orders in the first half of the year
• We turn bullish on the stock given the cyclical bottoming out of orders and margins. However, the stock is still not “cheap” and the company faces a number of challenges

• According to daily Expansion, Ganz MaVag plans to reserve part of Talgo SA (TLGO SM)‘s share capital for one or more Spanish partners chosen by the Spanish Government. 
• Uncertainty over the approval process has lowered the price to €4.31, given the low likelihood of counteroffers and the uncertainty of a potentially prolonged process.
• Gross spread is 13.8%, indicating uncertainty regarding timeline and development. The market is pricing a 39% probability of deal completion. Recommendation is sell on strength.

• Enphase Energy reported solid financial outcomes for the second quarter of 2024, driven by robust demand for its products and effective inventory management.
• The company achieved a revenue of $303.5 million, reflecting shipments of approximately 1.4 million microinverters and 120 megawatt-hours of batteries.
• This performance was supported by an overall end market demand valued at around $396 million for the quarter.

• Overall, June container throughput growth and average container rates strong
• But spot rates have begun to wobble recently, and 2025 uncertainty grows
• We have decided to close our suggested container shipping pair trade 

• WM presented its financial outcomes for the second quarter of 2024, underscoring a period of significant operational strength and strategic alignment towards its long-term growth objectives.
• WM reported a historical high with a 30% operating EBITDA margin, driven by efficiencies from technological investments and a robust pricing strategy.
• The company’s commitment to leveraging its expertise across various platforms was evident, particularly with its planned acquisition of Stericycle, which is expected to complement and expand its service offerings in the medical waste industry.

Metlen Energy & Metals achieved a record H1 EBITDA of €474m in 2024 (vs €437m in H123), while also increasing its operating margin by 169bp to 19.1% (17.4% at H123). Revenue declined marginally (-1% to €2,482m) but Metlen’s diversified and synergistic business model across the energy and metals sectors is helping to grow its margins and diversity of earnings (towards RES/Utility/Metals and away from volatile natural gas supply). Both net profit after minorities and earnings per share increased by c 5% y-o-y to €282m and €2.04, respectively. Net debt/EBITDA is a comfortable 1.76x and Metlen looks well placed for a potential upgrade to investment grade status by the rating agencies later this year, achieving its goal.

• Revenue increased by JPY5.1bn (+2.9% YoY), driven by growth in the Furniture and Stationery Businesses.
• Operating profit declined by JPY97mn (-0.6% YoY) due to lower profit in the Interior Retail business and increased adjustments.
• Gross profit margin rose to 39.9%, while the SG&A expense ratio increased to 31.1% due to strategic spending.

• General Dynamics recently presented their second quarter 2024 financial results, reflecting notable growth across their business segments with some operational challenges specifically in their Aerospace division.
• This analysis delves into both the positive outcomes and areas of concern from their performance to provide a balanced investment perspective.
• Starting with their strengths, General Dynamics displayed robust revenue increases across all their four business segments, highlighting an 18% overall growth.