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  • Aramark: Margin Expansion Will Translate Into Stock Upside
    Editors' Pick • Dec. 30, 2014 ARMK 1 Comment

    Summary

    • The stock has appreciated by around 50% since its December 2013 IPO.
    • The company's upside potential is not over and is in the early innings of margin expansion from transformation initiatives.
    • The company is less vulnerable to economic headwinds of slowing global growth and currency headwinds from emerging markets.
    • Resilient & asset light business model with strong cash generation should help deleverage and accretive to equity value.
  • Is It Time To Shift Into European Equities?
    Nov. 22, 2014 AEG, AZN, EADSF 3 Comments

    Summary

    • Europe tends to outperform when the euro weakens in local currency terms.
    • The U.S. has emerged from the great financial crisis in better shape than its developed counterparts, and the dollar is set for a major bull run.
    • Attractive valuations, increasing monetary base, private sector loan growth and policy divergence would support Europe’s equity valuation.
  • What Does The U.S. Dollar Bull Market Mean For European Equities?
    Nov. 20, 2014 AEG, AZN, EADSF 1 Comment

    Summary

    • The U.S. has emerged from the great financial crisis in better shape than its developed counterparts, and the dollar is set for a major bull run.
    • Europe tends to outperform when the Euro weakens in local currency terms.
    • European healthcare and pharma companies with exposure to the U.S. would benefit, while companies with costs denominated in U.S. dollars stand to lose.
  • What The U.S. Dollar Bull Market Mean For The Global Equity Markets?
    Nov. 19, 2014 AZN, FMS, GRFS 3 Comments

    Summary

    • US has emerged from the great financial crisis in better shape than its developed counterparts and the dollar is set for major bull run.
    • Evidence shows strong correlation between dollar rallies and outperformance of global equities.
    • European Healthcare and Pharma sector is one of the best ways to play the theme, given their dollar earnings and stand to benefit when Euro weakens.
  • Update: Michaels Companies - Tough Comps Pose Near-Term Challenges, But Long-Term Story Still Intact
    Nov. 17, 2014 MIK Comment!

    Summary

    • MIK posted strong earnings growth (+93% y/y) in its maiden quarterly results announcement post IPO listing.
    • The company has to cross a major hurdle in the second half of 2014 – tough comps from Rainbow Loom.
    • MIK could face two consecutive quarters of negative comps with depressed EBITDA margins from higher investments.
    • Investors who can focus on the long-term story (look past the next 2 quarters) would be rewarded.
  • U.S. Dollar: All Set For Major Bull Run
    Nov. 15, 2014 SPY, UUP, UDN 37 Comments

    Summary

    • US has emerged from the great financial crisis in better shape than its developed counterparts.
    • The US dollar is set for major bull run driven by increasing competitiveness, energy independence, declining US fiscal deficits and roll back of QE.
    • US consumers and US equity markets are the biggest winners, while commodity producers and US exporters would be the major losers.
  • Vulcan Materials: Impressive Earnings And Operating Leverage Story Playing Out Well
    Nov. 10, 2014 VMC Comment!

    Summary

    • Vulcan Materials Company reported strong earnings growth (+93%) driven by operating leverage with improving volumes and higher cash gross profit per ton.
    • Free cash clows used for small ticket bolt-on acquisitions focused on aggregates in attractive markets of Texas and California.
    • 2015 to witness strong improvement in gross profit per ton driven by price growth, higher shipments and improve operating efficiencies.
  • Martin Marietta Materials: Another Late Cycle, Non-Residential Play With Strong Operating Leverage
    Nov. 2, 2014 MLM Comment!

    Summary

    • Martin Marietta Materials is an excellent late cycle play on the non-residential and infrastructure recovery with attractive industry dynamics.
    • Recovery of end markets to drive volume growth with higher non-residential construction starts and infrastructure spending.
    • Operating leverage from sustainably higher cash gross profit per ton and volume recovery to drive earnings and cash flows.
  • Vulcan Materials: Late Cycle Non-Residential Play With Strong Operating Leverage
       • Oct. 28, 2014 VMC Comment!

    Summary

    • Vulcan Materials is an excellent late cycle play on the non-residential and infrastructure recovery with attractive industry dynamics.
    • Recovery of end markets to drive volume growth with higher non-residential construction starts and infrastructure spending.
    • Operating Leverage from Sustainably Higher Cash Gross Profit per Ton & Volume Recovery to drive earnings and cash flows.
    • Strong balance sheet and cash generation to help delever and return cash to shareholder.
  • Ryerson Holdings: Cheap Turnaround Play On The US Metal Demand Recovery
       • Sep. 23, 2014 RYI 1 Comment

    Summary

    • Ryerson Holdings (US based metal distributor) offers an excellent opportunity to take part in the recovery of US metal demand growth in a less price sensitive way.
    • Investors are waiting on the side-lines raising concerns over its high leverage, falling sales and cyclicality of the industry.
    • RYI will benefit from volume growth over impending recovery in industrial activity, while its margins would improve on product mix shift and cost cutting efforts.
    • Counter cyclical business model would help generate cash flows to delever.
    • Current valuation attractive and trading at a steep 50% discount to its closest peer Reliance Steel.
  • Michaels Companies: Long-Term Story Still Intact
       • Sep. 22, 2014 MIK Comment!

    Summary

    • Michaels Companies is North America’s largest arts and crafts speciality retailer, backed by PE investors and recently listed on the market.
    • Investors waiting on the side-line over concerns of matured and fragmented industry and low growth profile with less scope to grow market share.
    • However the stock would benefit recovery in household formation, drive sales from market share gains in a fragmented industry, new stores & higher comps and margin improvement from private label.
    • Strong free cash flow to help delever, drive earnings and support share price appreciation.
  • 3 Reasons To Buy PharMerica
    Sep. 12, 2014 PMC Comment!

    Summary

    • PharMerica Corporation is an institutional pharmacy Services Company whose share performance has been weak YTD in 2014.
    • Revised 2014 guidance reflects positive momentum going into 2015 with 3 M&A deals.
    • Trading at attractive valuation over peers and take over potential to act as a floor for share price.
  • 3 Reasons To Buy Union Pacific
    Sep. 5, 2014 UNP 9 Comments

    Summary

    • Union Pacific Corp (UNP) is a wide-moat company that has underperformed the market in 2014 and provides an attractive entry point.
    • The stock has reached an inflection point and set to benefit from organic volume growth, pricing gains and positive business mix.
    • The market yet to discount the pricing/volume growth as seen from the earnings revision trends.
  • Orbitz Worldwide: Turnaround Story With Multiple Growth Levers
    Editors' Pick • Aug. 8, 2014 OWW 1 Comment

    Summary

    • Orbitz is trading at 25% discount to its closest peers over investor concerns of exposure to low-yield air travel and stress in the hotel business.
    • Investment in mobile apps, a focus on the Asia-Pacific region and GDS agreements should help drive top line and margins in the coming quarters.
    • Valuation gap to close with Expedia, given the potential to improve margins from a higher share of bookings from hotels and international expansion.
  • Indonesia... Time To Ride The Jokowi Rally
    Mar. 30, 2014 EIDO, IDX, IDXJ 5 Comments

    Summary

    • The investment cases for Indonesia look favourable now due to i) reduced external vulnerabilities, ii) favourable current accounts position, iii) increasing FX reserves and iv) stable currency.
    • The nomination of Jokowi as Presidential candidate is viewed favorably by the market given that he is both a reformist and socialist.
    • History shows that equities tend to rally, leading up to elections (supported by foreign inflows).
    • Stocks with exposure to infrastructure sector (toll roads, cements, construction and banking) stand to benefit from the rally.
  • Emerging Markets: Is It 1997 All Over Again?
    Mar. 19, 2014 DXJ, EM, FXY Comment!

    Summary

    • Emerging markets under pressure due to QE tapering, political tensions, currency depreciation, credit stress and slowing growth in China.
    • Current scenario not as worse as the 1997 Asian Financial Crisis, given less aggressive Fed policy, lower current account deficits, lower FX denominated debt and higher FX reserves.
    • Need a fundamental fiscal adjustment (through weaker currencies and higher interest rates) to move out of the overhang of the excess period.
    • India and Indonesia are better placed (over Brazil, Turkey and South Africa) as they need much smaller currency or domestic demand adjustment for sustainable current account or inflation levels.
  • Continental Building Products: Equity-Accretive Real Estate Play Backed By Strong FCF
       • Mar. 10, 2014 CBPX Comment!

    Summary

    • CAGR 20% revenue growth supported by high volume growth and pricing power over the next 3 years.
    • Rising utilization levels to 85% levels (vs. 65% now) should support 1,500 bps improvement in EBIDA margins (CAGR 40% growth) over the next 3 years.
    • Strong margins along with limited capex will lead to robust FCF generation that will help delever and add to equity value.
  • Western Alliance Bancorporation: Compelling Growth Story With Multiple Upside Triggers
       • Sep. 30, 2013 WAL Comment!
  • Home Inns & Hotels: Ready To Check In
       • Jun. 30, 2013 HMIN 4 Comments
  • Silver Spring Networks: A Potential Multi-Bagger In The High Growth Smart Grid Market
       • Jun. 30, 2013 SSNI 3 Comments
  • William Lyon Homes: A Play On The Housing Recovery
       • Jun. 28, 2013 WLH Comment!
  • Tallgrass Energy Partners: A Dropdown Driven Story
       • Jun. 27, 2013 TEP 1 Comment
  • Evertec: A Caribbean Growth Story
       • Jun. 26, 2013 EVTC Comment!
  • RTI International: Scaling Heights In Aerospace
       • Jun. 26, 2013 RTI Comment!
  • QIWI: Where Cash Is King
       • Jun. 23, 2013 QIWI 2 Comments
  • Taminco: A Specialty Commodity Player
    Jun. 20, 2013 TAM 1 Comment
  • Luxfer: Secular Growth At Attractive Valuations
       • Jun. 16, 2013 LXFR 1 Comment
  • U.S. Housing: Out Of The Woods
    Jun. 10, 2013 FRC, HD, LOW 12 Comments
  • Debt, Deleveraging And Demographics: Developed World's Growth Drag
    Apr. 11, 2013 Comment!
  • Made In America: Re-Industrialization For Sustainable Economic Growth
    Mar. 26, 2013 AGU, APA, APC 4 Comments
  • James Tobin Primer On Currency War
    Mar. 22, 2013 ASEA, BZH, CAT Comment!
  • Marc Faber: The Fed Party Is Over, Invest Overseas
    Mar. 20, 2013 ASEA, BZH, CAT 16 Comments