IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Bottom-Up

Peloton Interactive, Inc. provides sporting apparels and products. The Company offers tops, bras, bottoms, watch bands, hats, bags, and workout bikes for indoor cycling products. Peloton Interactive serves customers worldwide.

In this note we look at potential balance sheet issues for Peloton. We estimate Peloton used c650mn in cash in 1Q22 and we believe Peloton could move into a net debt position in the next quarter, excluding long-term operating leases. This represents a cash burn of about 2bn USD in one year on our estimates. We have previously dug into the cash flow problems at Peloton previously, in our high conviction bear note which was upended by the pandemic.<a href="https://www.smartkarma.com/insights/2020-high-conviction-is-there-a-problem-with-peloton" target="_blank" data-smartkarma-citation="insights:35269" rel="noopener">2020 High Conviction: Is There a Problem with Peloton?</a>

In this note we look at potential balance sheet issues for Peloton. We estimate Peloton used c650mn in cash in 1Q22 and we believe Peloton could move into a net debt position in the next quarter, excluding long-term operating leases. This represents a cash burn of about 2bn USD in one year on our estimates. We have previously dug into the cash flow problems at Peloton previously, in our high conviction bear note which was upended by the pandemic.2020 High Conviction: Is There a Problem with Peloton? 

Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company's products include books, music, videotapes, computers, electronics, home and garden, and numerous other products.  Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.

Amazon’s latest set of results mark a potential unique inflection point for the behemoth. Amazon’s figures showed a surprising deceleration in growth for its North American and International retail segments. We believe the latest figures by Amazon will lead to unenviable downgrades as Amazon seeks to reinvest in its business and cycles the tough comparisons from last year.

Amazon’s latest set of results mark a potential unique inflection point for the behemoth. Amazon’s figures showed a surprising deceleration in growth for its North American and International retail segments. We believe the latest figures by Amazon will lead to unenviable downgrades as Amazon seeks to reinvest in its business and cycles the tough comparisons from last year.

Amazon – Retail Struggles or a Blip in the Road?

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

We wrote a month ago that Tencent was likely to beat consensus estimates driven by ‘other gains’ (<a href="https://www.smartkarma.com/insights/tencent-is-short-term-risk-reward-more-balanced" target="_blank" rel="noopener">note here</a>). Indeed, Tencent’s 2Q21 beat consensus estimates through a significant gain in ‘other income.’ On the flip side, we believe more questions may be raised about the performance of the core business.

We wrote a month ago that Tencent was likely to beat consensus estimates driven by ‘other gains’ (note here). Indeed, Tencent’s 2Q21 beat consensus estimates through a significant gain in ‘other income.’ On the flip side, we believe more questions may be raised about the performance of the core business.

Tencent 2Q21 Results: Questions About Core Business Remain

Sea Limited offers information technology services. The Company provides online personal computer and mobile digital content, e-commerce, and payment platforms. Sea serves customers worldwide.

We wrote in May that consensus estimates for Sea were 15% too light (<a href="https://www.smartkarma.com/insights/sea-limited-results-scope-for-15-upgrades" target="_blank" rel="noopener">note</a>). Indeed, Sea management yesterday upgraded its own guidance which could see consensus get closer to our c9bn USD estimate in 2021 (currently 8.5bn post results from 7.8bn in May). Bigger picture, there continue to be multiple reasons for long-term excitement in this unique multi-pillared growth story.

We wrote in May that consensus estimates for Sea were 15% too light (note). Indeed, Sea management yesterday upgraded its own guidance which could see consensus get closer to our c9bn USD estimate in 2021 (currently 8.5bn post results from 7.8bn in May). Bigger picture, there continue to be multiple reasons for long-term excitement in this unique multi-pillared growth story.

Sea Limited 2Q21 Results – Continuing to Drive New Growth Avenues

Alibaba Group Holding  / Equity Bottom-Up

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

Alibaba’s group EBIT fell by 11% YoY in 1Q21 yet we might get consensus EPS upgrades. We have written extensively about the significant dislocation in consensus estimates which in our view are too high on the EBIT line and too low on the EPS line. We dig into the numbers and our thoughts.

Alibaba’s group EBIT fell by 11% YoY in 1Q21 yet we might get consensus EPS upgrades. We have written extensively about the significant dislocation in consensus estimates which in our view are too high on the EBIT line and too low on the EPS line. We dig into the numbers and our thoughts.

Alibaba 1Q21/22 Results – Another EBIT Whiff yet We Might Get Upgrades.

14 years of experience in global investment research and trading. In relation to research, we focus on IPO, Event-driven and large-cap non-consensual ideas. In relation to trading, we focus on generating positive index-adjusted returns and have had several top-decile or top-quartile performances over the past three years. In terms of background, I have worked at several sell-side firms (JP, Redburn, Haitong, Mainfirst), won Starmine as top stock picker in European Food Retail in 2015 and have been voted top one to top-five by institutions and hedge funds.