In today’s briefing:
- Tax-Loss Selling In Australia 2024 – Time To Reverse The Trade (7.2-8.6% Rtn in Two Months So Far)
- Quiddity Leaderboard MV J-Gold Miners Sep 24: Mergers Mean Possible Up-And-Out DELETEs
- Adnoc/Covestro: Fresh Takeover Negotiations and Valuation Scenarios
- APA Corporation: What Are The Biggest Cost Synergies from Callon Acquisition? – Major Drivers
- Criterium Energy Ltd (TSX-V: CEQ): Results of Work-Over Campaign Above Expectations.
Tax-Loss Selling In Australia 2024 – Time To Reverse The Trade (7.2-8.6% Rtn in Two Months So Far)
- The original trade was discussed at end-April in Tax-Loss Selling in Australia 2024 – Historical Analysis and A Trade Basket then updated here and here.
- That has done OK. The LIQUID basket has delta neutral performance of +8.4% over 2mos; LIQUID+LESSLIQUID +7.2%; If one did a mixed basket (3x L+LL + 1x Illiquids) it’s +8.6%.
- Now it is time to reverse the trade, buying the basket you were short, and running it against index for the next 6-8 weeks.
Quiddity Leaderboard MV J-Gold Miners Sep 24: Mergers Mean Possible Up-And-Out DELETEs
- The MV J-Gold Miners index represents the performance small-cap gold and silver mining companies listed around the world.
- This index is reviewed semi-annually in March and September. During these reviews, names can be added or deleted from the index.
- In this insight, we take a look at the potential ADDs and DELs and our flow expectations for the index rebal event in September 2024.
Adnoc/Covestro: Fresh Takeover Negotiations and Valuation Scenarios
- On 24 June, Covestro AG (1COV GR) confirmed it has decided to enter into concrete negotiations with ADNOC regarding a potential transaction at an indicative €62/share (9.6x EV/fwd NTM EBITDA).
- Covestro is trading at 8x (vs. 6.5x median of peers). To justify €70/share (sought last December), Covestro should overdeliver, but analysts and market are somehow skeptical about that.
- Considering a takeout price of €62, gross spread is 12.1% and the shares are pricing a 32.5% probability of deal completion.
APA Corporation: What Are The Biggest Cost Synergies from Callon Acquisition? – Major Drivers
- In APA Corporation’s first-quarter 2024 financial and operational results, the performance seemed rather mixed.
- In terms of production efficiency, APA Corporation reported a notable 16% increase in U.S. oil volumes compared to the same period last year, primarily driven by its operations in the Permian Basin.
- This marks the fifth consecutive quarter where the company has met or exceeded its U.S. oil production guidance, underscoring its ability to maintain production efficiency consistently.
Criterium Energy Ltd (TSX-V: CEQ): Results of Work-Over Campaign Above Expectations.
- The work-over programme has delivered a production increase of 180 bbl/d from six wells at a total cost of US$0.36 mm.
- This represents an average increase of ~30 bbl/d, which is 50% above management’s expectations (20 bbl/d).
- The overall costs are on budget.
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