Daily Brief United States: ARM Holdings, Silver, Forward Air, Hewlett Packard Enterprise , International Public Partnerships, Vera Bradley, Wheat, CNX Resources , Eastern Bankshares and more

• Softbank Group (9984 JP)’s 180-day lock-up period on its 89.75% ARM Holdings (ARM US) shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.
• SoftBank will likely monetise its ARM stake using the Alibaba (ADR) (BABA US) playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. 
• ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to NVIDIA Corp (NVDA US), despite forecasted lower growth and margin.  

• Gold and Silver have remained unresponsive to lower rates, escalating geopolitical risks and higher China and India seasonal demand.
• Notably, early February saw the emergence of two contrarian signals that merited closer attention.
• While these signals are not foolproof market timing tools, they warrant attention when they align with technical support levels within an established consolidation pattern.

• A highly unpopular acquisition driving investors and sell-side analysts up the wall. Forward Air is OVERSOLD on almost all technical indicators and valuations are the lowest in its history  
• Our analysis suggests it is not all that bad, the business will still be profitable and generate positive free cash flow 
• Our fair value of USD59.50 (+97% UPSIDE) is derived by 2x current Book Value. A potential double-bagger, will be rewarding for the patient investors     

Key points

• HPE is a $21.5 billion provider of networking, servers, and storage products, with a focus on higher quality businesses and services
• The company generates cash from operations and divestitures, presenting an attractive investment opportunity with potential for upside to $29/share or a 35% IRR through 10/2025
• HPE’s recent Security Analysts Meeting emphasized its business segments, particularly highlighting opportunities in the Compute segment for AI inferencing needs and Proliant Gen 11 servers

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

INPP recently held a strategy day. This provided a detailed overview of its business and the outlook for a continuation of the strong, predictable, inflation-linked returns that have been generated since the company listed in 2006. INPP’s operational and financial performance is at odds with its discount to NAV and the company has a clear strategy to address this. No new financial details were provided ahead of INPP’s 2023 results, due to be published on 28 March.

• We are reiterating our Buy rating, $10 price target and projections for Vera Bradley with the company reporting 4QFY24 (January) results before the open next Wednesday.
• We look to the 4Q call for management to provide even more detail on the material changes to the company, as CEO Jackie Ardrey and her team begin to take full control of the shopping and product experience.
• We believe Vera Bradley has become increasingly more relevant and appealing to a wider customer base, and the company is positioned, with a cash rich and materially leaner balance sheet, to fund potential higher-margin growth drivers going forward.

• Global wheat prices have been defying expectations and have continued on a downward trend since the start of 2024
• Russia is expected to have a high wheat production of over 90 million tons in 2024 due to favorable growing conditions
• Ukrainian wheat exports are expected to improve with better logistics and an estimated production of nearly 20.5 million tons in the 2024-25 season

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• CNX is an ENP exploration and production business focusing on natural gas with a long history in the energy sector
• CNX evolved from a coal company to a natural gas producer under new management led by CEO Nick
• The current business model focuses on monetizing assets, separating coal business, and leveraging the productive Marcellus shale for low-cost advantage.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Merger with Cambridge Bancorp seen as strategic move to bolster asset management business
• Market initially reacted negatively to merger announcement
• Both EBC and CATC stocks have started to bounce back, reflecting overall recovery of bank stocks; Eastern Bankshares remains significant player in industry with strong asset base

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.