In today’s briefing:
- Hollysys: Court Injunction Hearing Is Key
- GlobalFoundries Pops On Q323 Earnings. But Why?
- ATEN: Earnings Power for Cash Flow
- Vitesse Energy, Inc. – Turning Oil into Dividends
- ADEA: Debt Continues to Decline
- MariMed, Inc. – 3Q Earnings Preview
Hollysys: Court Injunction Hearing Is Key
- Talk about your never-ending story. I count at least seven non-binding Offers for Hollysys Automation Technologies (HOLI US) since December 2020, three of which are still on the table.
- The latest, at US$26/share, was pitched earlier this week from Ascendent Capital Partners; who along with Changli Wang, Hollysys’ founder, previously made an US$23/share Offer in August 2021.
- However, all these Offers are largely moot until we get closure at the court injunction hearing. If that occurs. Separately, I had a solid discussion with Hollysys’ IR.
GlobalFoundries Pops On Q323 Earnings. But Why?
- Q323 revenues of $1.85 billion, flat sequentially but down 11% YoY. Net income was $249 million, up 5% sequentially but down 26% YoY.
- At a midpoint of $1.85 billion, forward guidance is once again flat sequentially. Overall it was a solid report with guidance slightly better than UMC delivered last week.
- Despite the solid quarter, the company’s outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure & ominous-sounding LTA “True Up” on the horizon.
ATEN: Earnings Power for Cash Flow
- ATEN reported third quarter results after having already warned there were order push outs towards the end of the period.
- ATEN has been trying to diversify the revenue stream to reduce the volatility order flow disruptions could have on the business
- ATEN managed to maintain gross margin above 80 percent, a feat that does not get much recognition from investors. ATEN should continue to achieve gross margin above 80 percent
Vitesse Energy, Inc. – Turning Oil into Dividends
- Vitesse’s business mission is to return capital to stockholders from free cash flow generated from its capital allocation model targeting non-operated interests in oil & gas assets in major onshore US producing regions.
- Favored assets are located in plays where advancing technology can positively affect future returns.
- A fixed common stock dividend is management’s preferred vehicle to return capital to stockholders.
ADEA: Debt Continues to Decline
- ADEA ) reported quarterly results since reporting it had a contract dispute with Shaw Communications. Third quarter revenue was better than expected with ADEA having several renewals in the period
- The ongoing pace of renewals should allow ADEA to generate free cash flow to reduce debt at a faster pace in 2024.
- ADEA reported third quarter revenue of $101.4 million compared to our estimate of $89.6 million. timing of renewals was a factor in ADEA’s revenue surpassing our forecast
MariMed, Inc. – 3Q Earnings Preview
- MariMed reports 3Q earnings on November 8 after the close.
- Q/Q, we are expecting 5.4% revenue growth and a slight contraction in AEBITDA.
- Maryland should be the most significant driver of the top-line improvement.
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