Daily Brief Energy/Materials: iShares Russell 2000 ETF, Rio Tinto Ltd, Crude Oil, Rio Tinto , Ardagh Metal Packaging, Sherwin Williams Co, Equinor ASA, Pan American Silver and more

• We continue to believe the path of least resistance is higher for the major equity indexes, which has been our stance since our 5/30/23 ETF Pathfinder.
• Beginning with our 7/18/23 Compass, we discussed our expectation for major 1+ year breakouts on the equal-weighted S&P 500 (RSP), Dow, and Russell 2000 (IWM). 
• The breakouts happened later that day on the RSP and Dow (above $153 and 34,280, respectively), and the IWM is now on the cusp of breaking out above $199.

• Discounts to NAV of covered holdcos have generally widened during July. Discounts to NAV: C.F.Alba, 47.5%; GBL, 39.1%; Heineken Holding, 16.4%; Industrivärden C, 6.6%; Investor B, 15%; Porsche Automobile Holding, 43.8%.
• The spread of Rio Tinto DLC tightened to 19%. Rio Tinto is a candidate for an Australian top hat structure.
• Interesting situations: Heineken Holding/Heineken, Porsche SE/vs. listed assets and Rio DLC.

• Welcome to your weekly maverick energy newsletter with views from both sides of the pond! Steno Research and 3Fourteen models align – see how we view the risk/reward in various proxy trades below!
• Apparently with the spikes in volatility over the last couple of weeks we need to talk about natural gas in Europe again.
• Various people have been harping about the Natural Gas markets in Europe, so let’s once and for all lay it out. Nooo, we are not going to run out of gas this winter.

• Rio Tinto reported a decent quarter, with consecutive operational improvements and the successful start of underground production at Oyu Tolgoi.
• Commodity prices and the energy transition influenced financial performance, with a strategic focus on strengthening their aluminum business and expecting significant returns from Oyu Tolgoi.
• Rio Tinto also recently expanded scandium production with the acquisition of the Platina Scandium Project.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Ardagh Metal Beverage Packaging’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Ardagh Metal Beverage Packaging (AMBP) is a carve-out from Ardagh Group. The business operates in the high-growth metal beverage can packaging segment, with a presence in North America, Europe and Brazil. Ardagh Group owns a 80% stake in the business, with the rest being mostly public float.

• Sherwin-Williams managed to surpass the revenue and earnings expectations of Wall Street.
• Given the positive first half and the current outlook for the second half, they have increased their full-year guidance.
• The company’s projections for the quarter’s consolidated net sales were surpassed and increased by a mid-single-digit percentage.

• Equinor’s results were a major disappointment as the company failed to meet the revenue expectations as well as earnings expectations of Wall Street.
• Equinor faced a challenging yet resilient quarter, with energy prices significantly down from the previous year.
• The company focuses on safety and maintaining a robust financial position, delivering value to shareholders through dividends and share buybacks.

Pan American Silver (PAAS) announced divestment of a number of non-core assets, including MARA and Morococha. The sale is in line with the company’s intention to optimise its project portfolio following the acquisition of Yamana’s Latin American assets earlier this year. It will generate combined cash proceeds of US$593m, plus net smelter return (NSR) royalties, resulting in a stronger balance sheet as well as a significant reduction in care and maintenance (C&M) costs. We will update our estimates and valuation following the release of the Q223 financial results scheduled for 9 August.