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Introducing The Hit List

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  • From next week we layer in another new feature in our 'Fundamentals' subscription service.
  • We'll be building and maintaining 'The Hit List', a basket of companies we think are ripe for acquisition in the next 12-24 months.
  • We'll include stocks from both cloud and space sectors in the list.
  • As usual, with new functionality, our prices for new members will move up to reflect the increased value delivered.
  • The Hit List commences Monday; prices rise 1 November.  Start your 2-week free trial now - beat the price rise.  Details below.

DISCLAIMER: This note is intended for US recipients only and in particular is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note’s date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.

Short-Term Trades, Long Term Holds ... And Now, Consolidation Plays Too

Come Monday we begin layering in a new source of value in our subscription service, 'The Fundamentals'.  We'll have a specific universe of stocks in the cloud and space sectors that we believe can be acquired by strategic or financial buyers in the next 12-24 months.

Our logic is simple.  We've been in a bull market fuelled by free money for over a decade now.  One consequence of this is that there are a whole lot of relatively small public companies in the cloud and space sectors; to date, even when lossmaking and troubled, most all have been able to raise capital and keep funding growth.  The market has been kindly in that way.

Inevitably this will change - it always does.  After any long expansionary period, any cooling off brings with it a major contraction of appetite to fund losses in growth companies.  The top names will continue to prosper, we have no doubt.  But point solution names or those with business models that are simply very difficult standalone and in truth ought to belong to a larger business?  We think there's going to be an uptick in M&A activity. 

We'll be building and maintaining The Hit List from Monday.  It will feature names in cloud - we have PagerDuty (PD) top of mind here - and names in space - we're thinking of Maxar Technologies (MAXR) amongst others - which we believe will become increasingly attractive to strategic buyers. 

We'll lay out the logic for such a sale, the likely buyers and the potential sale price range.  This will all be accessible 24/7 real-time in our proprietary 'Cestrian Stocks Central' worksheet.

Two comments on this.

First, it's a hit list.  Not everyone on it will be acquired, of course.  And calling the timing of M&A deals is a rather imprecise science.  So we'll be saying - that any one specific name in this list will be acquired tomorrow is low probability.  But that a number of the list will be acquired over time - that's going to be a much higher probability in our view.  

Second, we run a real-money portfolio as you know.  That will continue with the Hit List.  For the higher conviction names we'll be buying personally, in staff accounts (as always subscribers will get the heads up before any specific trade).


We started our 'Fundamentals' service in January 2019 and since then its gone from strength to strength, growing in popularity each week. 

Each time we layer in new value, we raise our prices for new members.  New members only.  Current members never suffer a price rise.  It pays to join quickly in order to lock in a lower price than will be the case should you delay.

Here's how our pricing will change:

Monthly Subscription:  moves from $159/month to $199/month.

Annual Subscription:  moves from $1,499/yr to $1,999/yr.

This will take effect 1 November. 

We'd love to have you aboard as a new member.  Join us now to beat the price rise.  Click this link to take a 2-week free trial, read our reviews, check out more detail about our service, and so on.  And you can always reach out to us anytime at minerva@cestriancapital.com if you want to discuss by email.

Cestrian Capital Research, Inc - 19 September 2020.

Analyst's Disclosure: I am/we are long MAXR.

Cestrian Capital Research, Inc staff hold personal account long position(s) in MAXR.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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