In today’s briefing:
- Reminder: Earnings Quality Short Candidates: Moderna, Sonos, Knowles, Juniper Tech
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (11 November 2022)
- ASRT: Asserting a Low Valuation
Reminder: Earnings Quality Short Candidates: Moderna, Sonos, Knowles, Juniper Tech
- This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.
- They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts. When the company’s issues become well-known, there is often multiple compression as well as a rerating.
- These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings. This week: Moderna, Sonos, Knowles, Juniper Tech
Shanghai/Shenzhen Southbound Connect: Weekly Moves (11 November 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry
- Overall, the net inflow over the past week was ~HK$4.1bn, split (+HK$1.7bn) for Shanghai and (+HK$2.4bn) for Shenzhen.
- The largest inflows were in Tencent (700 HK) and Wuxi Biologics (2269 HK). The largest outflows were inKoolearn (1797 HK)and China Mobile (941 HK).
ASRT: Asserting a Low Valuation
- ASRT reported third quarter revenue that were down from the second quarter due to ASRT deciding to remove Indocin from the Government’s voluntary 340b pricing program
- The addition of Sympazan gives ASRT a new asset in growing revenue and adjusted EBITDA in 2023
- ASRT reported third quarter revenue of $34.2 million compared to our estimate of $31.6 million. We were expecting ASRT’s commentary related to Indocin would yield lower revenue than it did.
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