Less than 2 months before its Spinoff, HD Supply Holdings, (HDS) announced today that it has opted to sell its Construction & Industrials business (Whitecap) for $2.9bn in cash to PE firm Clayton, Dubilier & Rice instead of Spinning it off to shareholders. Having entered our Model Portfolio in the lead up to the Spinoff, now that the short-term catalyst is gone and having generated a +21% return since our entry in June, we’ll be exiting HDS at the end of today’s (Aug 11, 2020) VWAP.
11 Aug 2020
Leading lease-to-own retailer Aaron's, Inc. (AAN) has announced the separation of its branded stores and online portal from its fast-growing leasing partnership segment, Progressive Leasing. This is accompanied by a rejig of the post-Spin management teams, and is expected to close by the end of the year. Progressive was originally acquired in 2014 for $700m and has grown significantly, now accounting for $1.7bn in FY19 revenues (or 54% of total revenue).
05 Aug 2020
We continue to see strong upside in satellite internet provider EchoStar Corp. (SATS) and increase our Model Portfolio holding accordingly. The company has seen increased network demand in this challenging time as more people are staying home due to either lockdown or working from home as a health precaution, and SATS is strategically poised to benefit from this ongoing environment.
05 Aug 2020
We are increased our Model Portfolio holding on Trane Technologies Plc's (TT) recent Q2FY20 earnings, which came in above consensus estimates due to a substantial rise in Residential HVAC bookings. The stock has already given a +28% return since entering the MP and has surpassed our Base case target price since entering the Model Portfolio, and we continue to see long-term value for investors. For more, click here.
05 Aug 2020
In January 2020, we highlighted Canadian Solar, Inc.’s (CSIQ) strategic review for the split between its solar panel manufacturing and energy services segments, and our belief in further value in listing the former in China. As of July 27, the company has concluded this strategic review with an IPO of the MSS segment on the Chinese markets. Our previous valuation anticipated a Spinoff of MSS, so we have updated it to reflect the new strategy.
30 Jul 2020
Our examination of the top gaming companies in the US has shown a valuation discount to Chinese media giant Tencent, warranting a Model Portfolio entry into Electronic Arts, Inc. (EA) as it continues to leverage on the growth potential in the gaming space and as e-sports gain traction in the market. Read on for more details.
14 Jul 2020