In today’s briefing:
- FTSE TWSE Dividend+ Sep 22 Capping: Massive Negative Flows for Farglory, Greatek, & Elan
- Intouch’s NAV Discount Not Supported By Higher Look-Through Payout
- Intel’s $30 Billion JV with Brookfield Asset Mgmt: To Take Away Market Share from TSMC & Samsung?
- Fitipower: Large % Market Cap as Cash Makes for Acquisition Target Price Support
- TMT Quick Hits: Palo Alto Networks, Farfetch, Netflix
- HubSpot Inc: Improving Reach
FTSE TWSE Dividend+ Sep 22 Capping: Massive Negative Flows for Farglory, Greatek, & Elan
- The index constituent weights of the FTSE TWSE Dividend+ Index will be capped during the upcoming September 2022 Index quarterly index review.
- In addition, Elan Microelectronics (2458 TT) could also get deleted as discussed in FTSE TWSE Quiddity Leaderboard Sep 2022: Elan Micro (2458 TT) Could Be a Big Negative Surprise
- In this insight, we take a look at Quiddity’s expectations for index flows resulting from these events.
Intouch’s NAV Discount Not Supported By Higher Look-Through Payout
- Intouch Holdings (INTUCH TB)‘s discount to NAV is back to levels last seen in November 2021, where euphoric trading was rolling over subsequent to Gulf Energy Development (GULF TB)‘s VTO.
- Intouch’s net cash increased in the 2Q22 and its look-through interim dividend payout is the highest in at least five years.
- I’d be shorting Intouch here and buying Advanced Info Service (ADVANC TB), with a view to mean reversion of ~25% NAV discount.
Intel’s $30 Billion JV with Brookfield Asset Mgmt: To Take Away Market Share from TSMC & Samsung?
- On 23 August, Intel announced that it will partner with Canada’s Brookfield Asset Management to jointly fund up to $30 billion to make advanced semiconductor chips in Arizona.
- Despite Intel’s aggressive plans to expand the semiconductor chip production, we are more concerned about the overall downturn in the semiconductor sector which lead to further decline in sales.
- Despite our negative view of Intel’s shares in the near term, Intel could gain market share versus Samsung and TSMC in the semiconductor sector in the next three years.
Fitipower: Large % Market Cap as Cash Makes for Acquisition Target Price Support
- We had a call with Fitipower management to understand the company’s latest situation in light of its weak share price and light analyst coverage.
- Compared to the overall semiconductor industry, Fitipower’s inventory status is exceptionally better than the industry median and thus the company will be under less pressure in the coming quarters.
- Fitipower has a large T$12bn net cash position, equivalent to 48% of its market cap. For 2022E, we expect T$4.5-5bn in EBITDA, which is about 18-20% of its market cap.
TMT Quick Hits: Palo Alto Networks, Farfetch, Netflix
- Palo Alto Networks produced an impressive FY4Q22 earnings, blowing out billings growth and showing an impressive display of “platformization”…only trades 8x forward revenues for 25-30% revenue and FCF growth.
- Farfetch finally acquired Yoox Net a Porter, after over a year of speculation. Deal is excellent for FTCH, gives them a monopolistic position in lux ecommerce.
- Netflix’s Gray Man yet another example of the company’s inability to create compelling big budget movies.
HubSpot Inc: Improving Reach
- HubSpot delivered a solid quarterly result with 41% revenue growth over the year in a constant currency surpassing Wall Street expectations.
- Its customers have been growing by 25% year on year and the company also delivered an earnings beat.
- In the upper-end market, the company is increasing its pricing of marketing hub enterprise to match the additional value it has been delivering to its customers in the past few years.
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