Daily Brief United States: Hollysys Automation Technologies, Soybean Active Contract, Hawkins Inc, Microchip Technology, Avrobio Inc, Seadrill , Netgear Inc, PotlatchDeltic , Bitcoin, Advanced Micro Devices and more

• Hollysys Automation Technologies (HOLI US) and Dazheng have traded barbs since Glass Lewis and ISS recommended voting against Ascendent’s US$26.50 offer at the EGM on 8 February.  
• While Dazheng may have been held to a higher standard than Ascendent, the proxy statement shows that the impasse was mainly due to Dazheng’s inability to get its act together. 
• The simple majority voting threshold and no shareholder publicly backing Dazheng’s call to vote NO will help the vote get up. The gross/annualised spread for an end-March close is 7.1%/52.1%.

• Soybean continues to face bearish outlook with supply surplus and lagging demand.
• Soybean price reached a 2-year low this month, with some using the bargain prices as a buying opportunity.
• US exports lag but recent uptick in large export sales suggests the availability of buyers at these prices.

• Hawkins (HWKN) reported fiscal third quarter (December) results benefiting from higher mix of water treatment sales as the industrial segment dealt with its seasonal soft period
• HWKN has grown its water treatment segment through acquisitions including several made towards the beginning of the December segment
• Water treatment sales were approximately $9 million less than expected due to the timing of acquisitions closing and their sales contribution during a seasonally soft quarter for the segment

• Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip’s 19% miss in 1Q24 gives no surprise.
• Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.
• Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg’s -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.

• Recently Avrobio (AVRO) announced a reverse merger with Tectonic Therapeutic, which was a bit unexpected.
• And disappointing. From what I have read from people more knowledgeable about biotechs, they have some promising treatments in development with pretty impressive insiders.
• But I have no idea how to value this. Net cash will be <$1/share post merger so I am closing this with a small loss at $1.25.

• The contract environment is proving advantageous for Seadrill (SDRL) with the Company announcing two more contracts
• We estimate one of the contracts has a day rate of $500,000 and should result in other bidding activity to reach and eventually exceed this level in 2024
• The day rates SDRL has announced for the latest contracts, along with the two contracts in December 2023, demonstrate there is demand to pay the higher day rates 

• NTGR is making a CEO change just as the business has stabilized. Patrick Lo has retired and is being replaced by CJ Prober 
• NTGR has also issued updated fourth quarter results with the business achieving positive non-GAAP operating margin
• NTGR is forecasting revenue of between $179 million and $189 million. We were already projecting revenue of $187.3 million and are keeping our estimate unchanged

Key points (machine generated)

• Timber REITs, specifically Potlach and Weyerhaeuser, are overvalued and have not adjusted to the current interest rate environment.
• Potlach has experienced declining timberland volumes due to issues in the US north and Canada, and the recent rise in interest rates is not expected to improve this.
• Potlach is also considered expensive relative to its forward EV/EBITDA multiple and consensus 1-year forward numbers, leading the author to recommend shorting the stock.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Earlier this week, we shifted to a bullish stance as we noticed promising developments in the cryptocurrency market.
• Concurrently, we launched our cryptocurrency portfolio.
• However, our short-term optimism has been tempered slightly.

• Q423 revenues of $6.2 billion, $100 million above the guided midpoint, up 6% QoQ and up 10% YoY
• Q124 guidance was for $5.4 billion at the midpoint, down 13% QoQ and flat YoY.
• We forecast 2024 Data Center growth of >70% YoY with potential for further upside