404

Page not found.

Serban’s Crypto Picks: November update

Ever since August we’ve managed to keep our account stable, holding our spot and hedging with shorts where necessary. The market has dropped about 20% since then and only recovered slightly, with major volatility over the last few months.

We have been Spot sidelined for the majority of Q3, but we are currently seeing a bit of relief for BTC and in turn, the whole market following it closely, as BTC still sets the tone for the whole crypto market.

Similarly, crypto market cap has very closely followed the SPX index, a strong correlation that is showing this industry is not yet mature enough to be independent from traditional markets, though it’s clearly on its way there.

The overall macroeconomic and geopolitical conditions continue to create poor trading conditions for crypto investments; we are trading rather short term for now, exiting our positions when the market gets tougher and following the weekly trends to buy back lower when possible.

We expect another downturn towards the end of the year, which is most likely the bottom signal that we are waiting for in order to invest more heavily and open some long term positions.

Serban’s Crypto Picks: Coin updates

Solana $SOL – I recommended this one before the 50% pump this weekend; still a very good project and solid hold, though i would wait for a retrace from this ATH and get in on the dip

Frontier $FRONT – solid project with very low mcap (100mil) so a lot of potential to grow from here mid-term.

Litentry $LIT – good project, recently launched, is currently accumulating in a rather straight line; low mcap with potential to boom eventually; can expect a retrace around the 11$mark so an entry is recommended on the dip / if it breaks 11$ can buy then.

Terra Virtua Kolect $TVK – super cool project, riding the NFT wave since before it was so mainstream. They’ve already seen a higher ATH than current position and in the next 2 weeks I fully expect to break that ATH (about a 30% increase potentially). Either way, a great hold in any portfolio.

Uniswap $UNI – definitely a great hold as it has basically enabled the whole DeFi space. Currently postponed some important update so it’s a good buy only if  you can hold it for another 2 months or so. Expect it to reach the high $30s – low $40s once update goes live may/june.

COTI $COTI – great project, lots of hype around it, most crypto people hold a bag for the long run; currently under its ATH with potential to quickly get back up there, subject to overall market conditions of course

Origin Protocol $OGN – huge potential to be the leading project in the NFT movement. They understand the market, they adapt quickly, the team is amazing and the fundamentals are there. It’s in a bit of an aggressive leg up and I would normally wait for a dip but honestly with this project, the dip may never come. Risky entry here but still good if you want to hold it longer term.

Kusama $KSM – super expensive right now, it has gone parabolic for a while, but I just can’t NOT recommend it. It’s a sort of trial network for projects building onto Polkadot (another coin that would be irresponsible of me not to recommend). You just have to own some DOT and/or KSM. Can’t advise on good entries as KSM is in price discovery and DOT is just expensive (6th place in marketcap overall)

Elrond $eGLD – This is one of the projects that has impressed over the last year; the team is amazing, working tirelessly day and night, their plans are bold to say the least and they’ve been constantly delivering. Fundamentals are there and even though they’ve had a massive rally starting last year, we can still make some profits on it on their way to a new ATH.

My buy zone is between $134-$146; I’d set a tight stop loss around the $129-$130 level in case the current play doesn’t work out as we expect it to due to market conditions.

This is a long term hold for me, so I’m accumulating eGLD whenever possible, but if you’re in just for some profits, you can set a TP level around the $193-$195 level.

Litecoin $LTC – is looking like a good buy below the 200$ mark. Expecting it to go to about 270-290 $ where we would take profit. It comes on time with PayPal’s announcement that they’ll accept LTC for payments – If it doesn’t manage to break 220$ (bounces off) then we can take profits there and move to the next coin.

Fantom $FTM – Fantom has been accumulating for over a month since its ATH at $0.84. Now it’s finally breaking resistance and seems to be turning around for a rally; in the macro context Bitcoin dominance is decreasing vs. Alts which is generally a great sign and the right time for us to get into some top 100 coins backed by solid fundamentals.
Entry range for FTM is $0.41 – $0.44 with SL set to $0.36-$0.37. This month should be extremely profitable for altcoins now that BTC dominance is going down; that said, we expect FTM to reach $1.4 – $1.7 in April, which is going to be our TP level on this call. For those more risk averse, $0.75 – $0.85 should be safer, just before breaking previous ATH.

Alt Market Update: With BTC hitting an ATH and now settling, ETH usually follows with a rally, hitting an ATH now (and expecting it to keep going); what usually happens during Ethereum’s run is that altcoins are stagnating or going lower. Don’t panic, it’s normal, as investors prefer to keep their holdings in ETH, watching it and expecting it to go higher and higher. Once ETH also finds a stable range, investors will start moving their ETH gains into midcap projects, which is exactly what we’re trading these days. There may be some dips coming up on those projects so it’s a great time to dollar cost average and get more coins at a discount for those coins where we trust the fundamentals.

Theta $THETA – as explained in the latest Alt market update, we need to build our portfolio around the bigger market cap coins for now – they are the ones that will rally once people move their profits from ETH & BTC into the alts. That said, Theta is one coin with massive potential and already huge growth in the last months. I’m buying more of this between $11 – $11.7, setting a SL at $10.2 – $10.4 and looking to take profits around $22 – $24; for those more risk averse, $16 is a good place to take out your initial investment and leave your profits in for longer term. Theta is a fantastic project that is disrupting the video content delivery networks and already has huge backing from the likes of Samsung, Sony, Google and others.

Chainlink $LINK – Chainlink has had a great run for the last year, as it’s the go to oracle for other projects that are looking to bring outside world information into the blockchain. LINK is a top10 coin that’s hungry for more based on our Technical Analysis. Our entry levels are $31 – $32, setting a tight Stop/Loss at $26.5 – $27. We expect Chainlink to start a rally taking it all the  way to $62 – $73. You can take profits along the way wherever you’re comfortable above $45, if you don’t want to ride this into price discovery, therefore reducing risk.

$OCEAN – Ocean is tokenizing data so that everyone can trade datasets on the Ocean marketplace. It’s a good project, with solid management and team behind it, with a clear vision and top notch implementation. Its current marketcap below 1 billion does not do it justice, and we see this project rallying this year to go over $3 billion mcap.
Our ideal entry range is between $1.4 – $1.53, so are now just going back down into this buyzone. Ocean is testing an important resistance level around $1.6, so it will likely fluctuate within our buy range this week, which is where we stock up on this coin. Once we break that resistance, there should be nothing stopping it from going above its ATH at $1.7 and into price discovery.

We are looking to take some profits anywhere between $2.4 – $2.55. We’re holding a part for the long run and investing those profits into other coins. 

Kusama $KSM update – We recommended this project during its parabolic rally, without an entry suggestion, as it was in price discovery. Now that some early buyers have taken profits and the price is stabilizing, we can, based on TA, add a couple of buy zones which we can hopefully hit.

First buy zone is at $395 – $420, where we’re testing a previous resistance level that should now turn into support. If we go below $390, we should be able to buy more $KSM in the $315 – $350 range, dollar cost averaging our investment. Fundamentally this project is still a must have in any portfolio, so having the chance to buy some after its retrace is a great surprise and we should take advantage of it. We’re currently setting our buy alerts and keeping a close eye on the price action of Kusama as we don’t want to miss the chance to buy some at a good price.

We’re setting take-profit targets around $700 – $750 short term, but should the bull run keep raging on, we’re seeing $KSM go to $1,100 – $1,200 mid/long term.

Akropolis $AKRO – This is a low/mid cap trade with a lot of upside potential, as it seems to have reached a local bottom.The project is good but the team has a lot of work ahead to deliver on their promises; if they do, this can be a good long term hold, but for now we’ll just trade it  for a profit and see how it goes FA wise. Our entries would be $0.062 – $0.07 with first TP orders at $0.095 – $0.1. If you’re willing to hold this longer, another good range for taking profits will be $0.12 – $0.14. We would ideally just take out some profits at any of those 2 points and leave the rest in Akropolis in case this becomes a $1bn project, getting us plenty of profits longer term.

Update $AKRO – We’ll be leaving our AKRO trade on a small loss, because it broke the level of support we were looking at; we’ll buy back at a later stage, if it keeps bleeding to lower levels, because it’s still a project that can make us good profits. It’s important to follow those trades and accept that sometimes we’ll need to take minor losses, as the wins will massively outweigh the losses. Once we’re back to an entry level for AKRO we’ll let you know.

Cosmos $ATOM – This project has been accumulating for 2 month now and has just now broken the long-term resistance line which is exactly the moment we want to catch for a good trade; we expect this to come back down and retest this resistance line, therefore turning it into support for the next leg up. We’re watching this one closely and setting a buy order between $22 – $23.4 which would be an amazing entry before the rally that is likely to come.

Setting a SL between $18 – $19.5 because that would result in a lower low and therefore invalidating our trend for this play.

We’re looking for a target growth of 70% – 80% so set your TP orders according to your risk aversion here. 

Litecoin $LTC – Having bought LTC around the $200 mark we are now exiting this trade with at least a 50% profit depending on the moment you entered the trade. This is a high marketcap coin and we don’t expect much higher growth in the next few weeks, so we’ll take out our investment+profits and look for the next trade that can give us a good R/R.

Algorand $ALGO – We’ve been watching the market closely as it’s been very volatile following the sudden BTC crash from last weekend. Alt coins have, as usual, followed Bitcoin’s lead and had a retrace of around 15%-20% on average, with few exceptions. The first coin that we’re looking to buy to take advantage of this dip is Algorand which is a solid project that we can get on a bargain between $1.2  – $1.35. Even with this considerable market retracement over the last few days, ALGO has not broken its upward trend and as long as we stay above $1.1 (Stop Loss for this trade) we’re still confident in this coin. We’re planning to take profits first at $2.4 and then when we’re testing ALGO’s ATH close to $3.

Polygon ($MATIC) – We’re trying to stay ahead of the herd here and are looking to buy some $MATIC. Polygon is a Layer 2 protocol that promises to solve Ethereum’s scalability issues, which makes it a huge potential project. It already rallied in April and has now been going through an accumulation period. We are looking to buy between $0.76 – $0.79 with a tight stop/loss at $0.742. We believe people will be taking their ETH profits and moving them into other top50 coins, with Matic being a good candidate as it is directly connected to the Ethereum ecosystem. We would be taking profits just before  the psychological level of $1 (anywhere between $0.93 – $0.96). We’ll be keeping some $MATIC in our portfolio afterwards, as we expect this project to at least double in value over the next couple of months.

Pokadot ($DOT) – We’ll try to play this sideways market for a little quick profit plays, with tight stop losses and take-profit levels. First play we’ll attempt is Polkadot; even though it’s fundamentally a good coin to hold longer term, we’re for now only interested in the quick potential profit from this trade. Remember, always keep your investment separate from your trades: never trade your investment and never invest in your trades, those are two very different plays.

We’ll get into $DOT at $28 – $28.3, setting a take profit level at $34 and a stop loss level at $25.

Orion ($ORN) Staking Update – Orion is one of the projects we are very bullish on, with potential to become the go-to place for crypto traders, aggregating order books from both centralized and decentralized exchanges. They are now launching their Orion Pool where we will be able to stake (lock) our $ORN in order to earn more $ORN. This is rather simple and relatively risk free. For the more adventurous there’s also the option to stake ORN in liquidity pools alongside USDT, BUSD, BNB or ETH, but this creates the risk of impermanent loss (IL) – not for the risk averse average trader (read more about IL here: https://academy.binance.com/en/articles/impermanent-loss-explained). 

June 22nd is when the pools open and we’ll learn more of how it works and what the rewards are exactly. There will be no min/max limit to the amount of $ORN we can stake and also no limit to the locking period. We’ll get back to you with more once we stake our $ORN.

17.10.2021 UPDATES

Since the April-May $BTC crash the market has been unstable for the better part of the last 5 months; we’ve managed to close some quick profits on a few trades, but the market conditions have just not been good enough to risk too much liquidity. 

Some of our initial bets taken before April/May are paying off handsomely (like $SOL), while some others are lagging behind, though still with potential to make profits going forward.

We want to update you on the coins we’re still holding, coins we won’t be selling anytime soon (long-term holds), coins we consider selling to cut some losses and coins we look to be buying to hold in the near future (projects that have strong fundamentals and are likely to grow in the next 6-12 months).

$SOL – We bought SOLANA when it was just $20 and still believe this project is nowhere close to being done growing, even at $160 where it stands today. It’s just a strong project fundamentally that has gained a lot of traction in the last 3 months, especially with NFTs booming on their platform; adding to that, it’s also backed by FTX, one of the top 3 exchanges today so we can only be excited for where Solana is going as a project and, of course, as a token. Solana is currently #7 in the charts with a $50B market cap, so it’s no longer a “startup” coin. 

This was a 700% profit for anyone who bought when we first mentioned it – not unusual for crypto, but still rare. Solana is a long term hold for us, though we always recommend booking some profits on the way up. 

$EGLD – The Elrond token has almost doubled since we first announced it, though we think this one is only getting started. We’re watching the project and its founders closely and based on their plans, pace & implementation we believe this to become a top 10 project in the coming couple of years. Definitely a long-term hold project for us and an exciting one to watch as it unfolds.

$MATIC – Rebranded to Polygon recently, this project exploded in popularity as a cheaper to use alternative to Ethereum. Many projects that were originally built on top of ETH have bridged towards Polygon and/or Binance Smart Chain, making them usable by a larger audience, people who could not afford paying exorbitant gas fees on Ethereum. We’ve liked and followed Matic for a while now and are still excited to see where the project is moving, especially with the growing popularity of Ethereum alternatives in the past 3 months.

$COS – We bought this coin at $0.013 expecting its mainnet launch to drive the price up; we made the right bet, sitting today at $0.0238; this is an area where we’re comfortable booking the profits, so we’ll be moving up our SL at $0.022 and a TP at 0.04; worst case scenario we’re making 83% in profits on this one. It’s not fundamentally a long term hold so we’re playing this purely for the quick profits.

$COTI – The team has been hard at work delivering on their promise to bridge DeFi and TradFi, recently having launched the COTI bank account and Visa debit card. 

Even though it went down all the way to $0.1 after the crash, it’s a solid project with strong fundamentals and its bounce back to +$0.5 is proof of that, getting back into profit range for us. We’re still holding on to this one long term as we believe in its potential.

$UNI – This is a long-term hold project, as the main DEX on Ethereum and still with lots of potential to grow in value; Uniswap basically enabled the whole DeFi boom and continues to add new projects for people to trade everyday. We’re still holding this one for the foreseeable future, as we expect this to grow especially with ETH fixing its scalability issues over time.

$LINK – Chainlink is the most important blockchain oracle in crypto, basically allowing real world data to flow into cryptocurrency projects (and vice-versa), providing the backbone of most crypto movements (such as DeFi). It’s a project that we want to hold going forward, as it’s indispensable to the functioning of the majority of crypto projects. 

$KSM – Kusama is the little brother of Polkadot, serving as a testing sandbox for projects that want to launch on the exclusive DOT blockchain. We’ve bought $KSM right before the crash of April/May so we’re currently below entry prices, but we are still holding this token at least until it reaches $1,000. We believe the Polkadot ecosystem has a lot of potential, especially recently with the launch of its parachain auctions, so it’s a matter of time before our bet on those 2 tokens pays off.

$OCEAN – After 3 months of accumulation between May-August, Ocean seems to be waking up again, looking to get back into the $1.3-$1.5 initial buy range.

Once we go back past those levels entry we’ll set our SL there and look to exit this trade.

$OGN – The project has been moving forward slower than anticipated, which is also the reason it’s lagging behind compared to where we entered the trade; we still believe this has potential long-term but we’re revisiting this buy once it reaches $1.5 again. We want to see more action from the team, more NFT drops and more traffic moving through their platform in order to keep it on our long-term holding list. For the time being we’re not selling, but we are setting a SL at $0.65 to cut our losses in case the market goes south again.

$ORN – We’re still huge fans of Orion protocol and, as expected, it’s taking a long time for the team to build their ambitious project. The team is hard at work, pushing regular updates to its investors and community, building the future of crypto trading via the ORN exchange aggregator. We’re still holding and staking our $ORN and looking for it to reach at least $50 in the coming 6 months.

$LIT – We still believe in Litentry, especially since they just applied for a parachain slot on Polkadot – this is make or break for us, so we’re setting a SL at $3.8, as going below this level means we’re better off just cutting our losses. If they manage to win the auction on the Polkadot network, then we’re certainly holding the token longer and following it closely, hopefully to new highs.

$FRONT – We’re very excited about Frontier and it’s new Frotier 2.0 launch. This is a cross-chain project that has potential to bring DeFi to the masses via an easy to use, intuitive mobile app that will link 14 different blockchains and their DeFi revenue streams. This is an easy long-term hold for us and with its below $100M marketcap we believe there’s huge potential for growth.
$TVK – just like Origin, Terra Virtua has been moving slower than anticipated, so we’ll be setting our SL level at $0.173. It’s a low mcap (below $100M) so there’s always the potential for it to grow, we’ll be watching it closely if it goes back up to $0.5 and reevaluate our entry over there. For the time being, going back to $0.17 territory will prove to be too much of an exposure for us and we’ll cut our losses there.

MBTN SW – Update – Decent J-Curve potential

*Looking to add towards the end of the rights issue subscription period that ends on the 9th November

*Terms are 7 for 20 at CHF 0.267 raising CHF 250m – trading period 1st November to 7th November, subscription period ends 9th November, new shares to trade 11st November

*Short interest around 30-35%

*We have seen a bit of volatility in the discount to terms the rights trade at – from terms to a 70bps discount

*Note the rights do not have a closing auction, goes into End of Trading Phase @ 17.15 CET / 16.15 UK.

*We like the stock fundamentally-  the strong technology and positioning of the company is in a niche part of the sector and this expansion plan will help them scale up – from time to time banks also publish some very bullish notes on them

*The raise will accelerate the expansion of its annual production capacity to about 3 GW – The proceeds will be used to raise the capacity for the production of solar cells at the site in Thalheim, Germany, and the production of modules at Goodyear, Arizona. The US facility is expected to deliver its first products in mid-2024.

*From a technical point of view the rights issue dynamics which add a load of short interest on the stock side through the subscription period we see this as potentially giving the stock boost as a nice J-curve type of trade – but very volatile

*In the past we have seen it ideal in these type of situation to  buy the last two days before the end of the subscription period and then potentially add on the rump placing – rump may according to the prospectus be sold at any time in open market or dribble-out, bookbuild or a combination – may not be sold below the offer price

*Looking at a quick and dirty comp valuation we get to a tp of CHF 0.55

BUY MBTN SW – Update – Solar powered numbers +11% ABS

Tuesday • 24 August 2021 • 09:54

*Results last week showed that the solar panels are sold out into 4Q and that earlier disclosed delays getting to full capacity is expected to be sorted by end September which we see as the next catalyst for the stock

*Jefferies reiterates its buy with a price target of CHF 0.8

*We continue to hold the position – our goal is to add to position over time as we have high conviction in the name.

*We see a 100-200% Upside from here

TRADING BUY: MBTN SW – Battered into numbers, remains a cheap renewable


Tuesday • 17 August 2021 • 16:46


*Earnings set for Thursday 19th August

*The company announced last week that its ramp-up of PV module production delayed by few weeks which has caused some weakness the last days along with the market sell-off – we believe this is only a minor set back

*We see a 100-200% Upside from here

Catalysts on our list:

*Tech is 30% better than competitors, Samsung out of the race – valuation extremely compelling with price target of CHF 1

*H2 they started production and the ramp up of this will be the next Catalyst

*Own company forecasts for 5 years values the company at CHF 1.4 – assumes half the current multiples in the sector and their WACC

*Goal is to add to position over time as we have high conviction in the name but not very liquid

Monaco Alpha Update: Below is a brief update on each of our names

MEDIUM TERM Trade – Getting more long commodities plays – update to idea at the end

H = Hold

C = Closed

B = Buy / Add

S = Short/add to short

ATO                       B             -80%

Add

Had  another shocker, while the company says it does not want to sell the cyber security business, we see it as being highly vulnerable to an activist investor getting involved to push the management to make the right decisions to split the business.

http://monacoalpha.com/ideas/buy-ato-fp-our-top-pick-in-the-it-services-sector-we-see-a-35-upside

CCJ         B             +107%

Hold

Performed very well, we continue to like the name and see a lot of prospects for the sector, especially as governments have felt the pressure of from the spike in oil due to the geopolitical tensions. A western Uranium company like CCJ with reserves in Canada is a great way to play this.

http://monacoalpha.com/ideas/re-iterating-nuclear-power-theme-long-ccj-dangerously-clean/

CNA       C            +31%

Closing

Still remains cheap but windfall tax etc creating some issues

http://monacoalpha.com/ideas/buy-cna-ln-update-on-earnings-1-5-to-date-on-position/

DOLE        B             -50%

Add

We continue to like this story although the stock has had a bit of an opposite reaction to the inflation theme then what we were expecting. They are the market leader in fresh fruit and vegetable sector – nearly double the revenue of its competitor – DOLE’s market valuation simply makes no sense, especially given how strong their earnings were.

http://monacoalpha.com/ideas/dole-us-a-ripe-future-ahead-and-a-great-way-to-play-the-food-inflation-theme-35-upside/

EDF        C             +32%

Closing

Takeover offer at EUR 12 came in, we saw more upside but happy to book profits

http://monacoalpha.com/ideas/edf-fp-update-hold-21-abs-13-1-rel-awaiting-announcement/

FAR        B             -48%

Add

We are also increasing our FAR LN position, the placing to fund the completion of the study at Balasausqandiq deposit will secure any financing need until the study is complete, results expected in the middle of 2023. This interview with the CEO gives a good update https://www.directorstalkinterviews.com/ferro-alloy-resources-ceo-nick-bridgen-says-an-exciting-12-months-ahead-of-us-video/4121083003

Original idea http://monacoalpha.com/ideas/update-buy-ferro-alloy-vanadium-completion-of-initial-investment-another-tick-in-the-box/

KBC        C             +2%

Closed

Did not perform as expected in the inflationary environment

http://monacoalpha.com/ideas/buy-kbc-setting-up-for-a-stella-q1-print-we-see-a-25-upside/

MBTN                   B             -2%

Hold

Remains our favorite solar play – the strong technology and positioning of the company is in a niche part of the sector makes it a great play.

http://monacoalpha.com/ideas/trading-buy-mbtn-sw-battered-into-numbers-remains-a-cheap-renewable/

NOKIA                  B             +25%

Hold

We like the sector long term, the company’s 5G growth path is clear – The company continues to develop sales growth despite a challenging environment in China and the US

http://monacoalpha.com/ideas/monaco-alpha-update-4-reiterate-buy-nokia-fh-results-out/

SGRE      C             -11%  

Closed

Buyout announced. We were disapointed by the price but moving on

http://monacoalpha.com/ideas/buy-sgre-sm-adding-to-our-renewable-picks-ahead-of-results/

SSE         B             +5%

Hold

We still see it cheap and like the sector and see this as one the cheapest renewable plays in Europe – happy to sit long

http://monacoalpha.com/ideas/buy-sse-ln-update-1-abs-speculation-about-elliott-stake-build-further-backs-thesis-great-opportunity-to-add/

TED        C             +57%

Closed

Got taken over, we saw more upside but happy with the trade after averaging in

http://monacoalpha.com/ideas/buy-ted-ln-100-upside-transformation-plan-leaving-huge-upside/

Energy basket

Oil country tubular goods price has been surging (basically drill pipe prices), up +90% over the last year leading which is causing issues for the shale drillers who are trying to ramp up production – this is likely to result in higher oil prices worldwide

We expect the demand for Western oil production to go up as governments are likely to realize that they want to have more security in terms of energy needs – we therefore look to get more long on the below

RIG                         B             +12%

CGG                       B             -15%

YPF                        B             -37%

SUBC                     B             +8%

TLW                       B             -24%

TDW                      B             +75%

GKP                       B             +40%

PAM                      B             +22%

HLX                        B             -26%

FTI                          B             -5%

ATAD                                  NA – sanctioned

LKOD                                  NA – sanctioned

http://monacoalpha.com/ideas/the-coming-energy-crisis-and-how-to-play-it/

Closing TED, +12.5%

Closing the trade given the takeover bid – we saw more upside fundamentally but in this market we will take the profit

Doubling up on TED LN – Sell-off overdone


Monday • 04 July 2022 • 17:45


*Adding to our position as we see sell-off as massively overdone

BUY TED LN – 100% upside – Transformation plan leaving huge upside


Wednesday • 21 July 2021 • 09:18


*TED’s transformation plan has now reached such a stage that we are feeling confident that the value will be unlocked in the near future

*The name has been punished through Covid while the company has used the time to progress in its brand refresh/transformation on its core priority markets and working towards its ESG targets leaving it as a strong brand coming out of Covid

*Latest financials released last month continued to demonstrate tight cash management measures and strong growth in online sales as the company adapted to the pandemic while also keeping costs under control

-At the upcoming AGM the company is looking for shareholders’ permission for a buy back, which we see as a mark of confidence.

*Analysts are turning more positive ahead of the winter collection which we believe could be a great catalyst for the stock and an eye opener for the rest of the investment community

*As we are seeing the UK and Europe in general open up again for summer – despite some negative headlines in relation to travel which we see less relevant for the stock – we expect to see an increase in demand for the summer and winter collections

-Added to this Strategists are looking to cheap U.K. Assets for year-end gains. Only a net 1% of global investors are overweight the region vs a net 45% overweight Europe.

*Our DCF valuation comes in around 300p while our peer valuation comes in at 233p, this leaves an average 75% upside from the current levels

*Due to the volatility of the stock on the back of Covid headlines we are initiating our position while saving fire power in case of a further market sell-off

*The set up is there from a valuation, self help and general macro trend perspective. Now we just need the mkt to get onboard.

Time to initiate a position.

BUY TED

Closing BUY TMV US, +50%

FED priced for 8/9 hikes this year. I think if China is going to be like this for a while which seems likely then no way the FED gets 8/9 away.

Closing for +50% profit and I would be happy to initiate the inverse position and be long bonds/short rates.

Bond move gone too far? BUY TMV US


Wednesday • 21 July 2021 • 11:22


The narrative now is all about a growth slowdown due to tough comps, FED being slightly hawkish and more press noise on new variants.

I think things accelerate again in Q4 once vaccines all out there and we’re comping vs last year’s lockdowns.

Europe & US is all open although Asia is shutting down again – Q3 and Q4 gives another few months for vaccines to catch up.

Q3 last year was relatively normal because we had squashed it with lockdowns in Q2…

In Q4 last year we had lockdowns again into xmas so comps are easier in Q4 than Q3, so rate of change terms things look better.

Added to this everyone has been the same way to start the year, now everyone getting to the other side of the boat with the growth slowing narrative.

I believe this is wrong and this move has more to do with positioning and narrative rather than any change in fundamentals.

To me, the US 10yr yield is at the lows and has run its course. I see the 10yr moving back to 2% as investors feel inflation fears have passed and people have exited the inflation trade. Inflation and yields to higher highs going forward.

We are expressing this trade via our existing oil positions and adding a Long TMV US trade to our portfolio.

TMV US corresponds to the 3X inverse (opposite) of the daily performance of ICE U.S. Treasury 20+ Years Bond Index.

https://etfdb.com/etf/TYO/#etf-ticker-profile

Monaco Alpha Update: Below is a brief update on each of our names

Below is a brief update on each of our names

CCJ         B             +127%   

HOLD

Performed very well, we continue to like the name and see a lot of prospects for the sector, especially as governments have felt the pressure of from the spike in oil due to the geopolitical tensions. A western Uranium company like CCJ with reserves in Canada is a great way to play this.

http://monacoalpha.com/ideas/re-iterating-nuclear-power-theme-long-ccj-dangerously-clean/

CNA       B             +57%

BUY

Turnaround begun, simplified the structure, focusing on fewer consumer businesses and rather the strength of energy supply. We ultimately expect this to lead to multi-year positive earnings momentum. They also hold a 20% stake in EDF Energy which we also like to have exposure to.

http://monacoalpha.com/ideas/buy-cna-ln-update-on-earnings-1-5-to-date-on-position/

TMV      B             +30%      

HOLD

With inflation CBs no choice but to hike, until they blink we stay long.

http://monacoalpha.com/ideas/bond-move-gone-too-far-buy-tmv-us/

NOKIA  B             +34%

HOLD

We like the sector long term, the company’s 5G growth path is clear – The company continues to develop sales growth despite a challenging environment in China and the US

http://monacoalpha.com/ideas/monaco-alpha-update-4-reiterate-buy-nokia-fh-results-out/

HBR        B             +19%      

CLOSING

Booking profits, oil had a great run but HBR remains very hedged and has therefore not benefited as much as the others, we are moving on with a nice profit

http://monacoalpha.com/ideas/buy-harbour-energy-update-ms-note-out-on-hbr-ln-one-of-our-favourite-names-in-our-oil-theme-is-harbour-energy

VIV        B             +18%

CLOSING

Booking profit , we have made a nice return after the spin-off as more analysts and investors have been able to focus on the company now that it has cleared up some of its holding structure.

http://monacoalpha.com/ideas/viv-fp-umg-buy-viv-fp-on-tuesday-and-umg-on-thursday-spin-clears-path-for-value-creation-37-upside-from-current-price/

EDF        B             +12.3%

ADD

We are adding to the position as part of the rights issue. We see the rights issue as clearing a lot of the worry/overhang in the stock making it more investible again. The government has yet to make any final decision of what happens to the company but we like the split prospects.

http://monacoalpha.com/ideas/edf-fp-update-hold-21-abs-13-1-rel-awaiting-announcement/

SSE         B             +12.3%

HOLD

We still see it as cheap and like the speculation about a potential break up etc. We also like the sector and see this as one the cheapest renewable plays in Europe – happy to sit long

http://monacoalpha.com/ideas/buy-sse-ln-update-1-abs-speculation-about-elliott-stake-build-further-backs-thesis-great-opportunity-to-add/

BAYN     B             +9%

CLOSING

Booking profits and moving on.

http://monacoalpha.com/ideas/monaco-alpha-buy-bayer-securing-the-future-dcf-upside-remains-huge/

KBC        B             +1%

HOLD

Leaving it for now as we like the sector and see KBC as a cheap way to play it as rates are going higher with inflation.

http://monacoalpha.com/ideas/buy-kbc-setting-up-for-a-stella-q1-print-we-see-a-25-upside/

MBTN   B             -2.25%

HOLD

Our solar-power growth story remains intact, the stock got hurt on the renewable sell-off but we think the growth prospects of the company and see the sector as being the right place to be as the world is looking for energy alternatives.

http://monacoalpha.com/ideas/trading-buy-mbtn-sw-battered-into-numbers-remains-a-cheap-renewable/

TED        B             -3%

HOLD

The company suffered from the market sell off but has since been approached about a potential takeover, we see this as a great potential catalyst to crystalize the value within the stock. Even with an opportunistic bid we continue to see a minimum level of 160p leaving a load of upside.

http://monacoalpha.com/ideas/buy-ted-ln-100-upside-transformation-plan-leaving-huge-upside/

FAR        B             -8%

ADD

The stock has sold off due to its geographical exposure to Russia, and potentially as some of the holders might have been forced to liquidate. The company released a statement last month detailing how they are not exposed to Russia. We continue to see huge prospects for the name, timeline more like 1-2 years though, we therefore just see this as a great opportunity to add.

http://monacoalpha.com/ideas/update-buy-ferro-alloy-vanadium-completion-of-initial-investment-another-tick-in-the-box/

DOLE        B             -12%

HOLD

We continue to like this story although the stock has had a bit of an opposite reaction to the inflation theme then what we were expecting. They are the market leader in fresh fruit and vegetable sector – nearly double the revenue of its competitor – DOLE’s market valuation simply makes no sense, especially given how strong their earnings were.

http://monacoalpha.com/ideas/dole-us-a-ripe-future-ahead-and-a-great-way-to-play-the-food-inflation-theme-35-upside/

SGRE      B             -4%   

HOLD

Renewable sector has suffered but as with MBTN we want exposure to the sector as we expect the world to look for energy alternatives after the rise in oil.

http://monacoalpha.com/ideas/buy-sgre-sm-adding-to-our-renewable-picks-ahead-of-results/

ATO                       B             -38%

HOLD

Had a shocker, while the company says it does not want to sell the cyber security business, we see it as being highly vulnerable to an activist investor getting involved to push the management to make the right decisions. We have also seen both Airbus and Thales having shown interest which could lead to another catalyst.

http://monacoalpha.com/ideas/buy-ato-fp-our-top-pick-in-the-it-services-sector-we-see-a-35-upside

SPM                       B             -49%

HOLD

Part of our oil portfolio package, we should probably have sold on the profit warnings but restructuring package on the way, we will reassess after this.

http://monacoalpha.com/ideas/the-coming-energy-crisis-and-how-to-play-it/

BOO                       B             -22%

CLOSING

Had it has a buy against ZAL GY – both have been dogs – we are moving on.

http://monacoalpha.com/ideas/trading-buy-boo-ln/

Energy basket

HOLD

RIG                         B             +12%

CGG                       B             0%

YPF                        B             -3%

SUBC                     B             +4%

TLW                       B             -10%

TDW                      B             +57%

GKP                       B             +51%

PAM                      B             +13.6%

HLX                        B             -20%

FTI                          B             -24%

ATAD                     B             -94%

LKOD                     B             -99%

We have had the view that we have an ENERGY CRISIS coming due to the new drive to be carbon neutral which although ultimately its an important cause its unrealistic in the time frame and will lead to an energy crisis. That coupled with current geo political issues re in-force our view.

This is why we have had a long standing positions in Uranium and mid cap oil names.

Fossil fuels still account for 84% of world energy demand at a time when demand is increasing and it will be near on impossible for the normal supply function to respond.

So an allocation to mid cap oil names is essential as they will benefit from the surge in oil prices.

There is still a unique opportunity as we have amazing supply destruction, a denial from the market of future energy needs, and the virtue signalling abandonment of fossil fuels led by Western oil companies coupled with geopolitical risks which have only increased the need for western energy sources and energy security.

We continue to hold all our oil positions as we see them as multi year trades with enormous upside.

For the Russian names we are unfortunately stuck in for now, we have no choice but to hold, we have no insight into what Putin will do.

http://monacoalpha.com/ideas/the-coming-energy-crisis-and-how-to-play-it/

CNE LN – Update – Tender structure announced – we are looking to book our profits +50% ABS on the trade

*We continue to like the oil sector and are tempted to keep a small position as we believe in the E&P assets of CNE but we also want to use the liquidity event to book profits as we are up +50% even though we continue to see another 20-30% upside in the stock

*Yesterday we saw the tender structure announcement and today we saw results which were inline

*We hope to get an opportunity to buy them back lower on flow-back from event-driven traders booking profit

*Looking at the NAV of CNE we see around 107p being paid out through the tender and buyback

*In total we get to a NAV of around 265p which implies a further 20% upside when we add in the E&P assets – with the recent oil price volatility it is very difficult to get to a precise figure for this – we would therefore be tempted to use the liquidity event into the tender to reduce our position as we book profits from what has been a very profitable trade

*The buyback should also provide the company with decent support while event driven flow goes out and traditional E&P investor flow goes in

Tender structure announced summary

*USD 500m to be returned through a tender– inline with expectations – after the tender the company will start its  USD 200m buyback

*Tender price to be based on a five trading day VWAP up to and including the closing date of the offer

*Eligible shareholders will alternatively be able to select to tender their shares at the clearing strike price for the Tender Offer

*EGM set for 25th March – requires 75% of the votes to be in favour

*Tender offer 8th March – 5th April

*6th April announcement of the strike price and results

*The remainder of the Indian Tax Refund will be retained to augment working capital and to assist with the further expansion of the Group’s low cost, sustainable production base

*The company currently has around 500m shares outstanding, the buyback corresponds to around 10% of the capital

Price

*VWAP based price (minimum price) to a 5% premium over the VWAP price (maximum price) – following closing a clearing strike price will be selected which allows up to USD 500m to be distributed

*To the extent the company does not received sufficient take-up it plans to consider paying out a special dividend for the remainder

Process

*Submit a tender at whichever of the prices within the Price Range is ultimately determined to be the Strike Price (referred to as a “Strike Price Tender”), that is a tender which is not made at one of the specified prices within the Price Range

(B) submit a tender at a single specified price within the Price Range; or

(C) submit a tender at more than one of the prices within the Price Range (which could include a Strike Price Tender).

Major shareholders

MFS                       13.687%

Blackrock             9.464%

Abrdn                   5.546%

Vanguard            3.509%

BUY CNE LN – India Update – Reiterate Buy

Thursday • 06 January 2022 • 08:39

Statement from company overnight saying the company has now concluded all necessary steps required for receiving refund, upon acceptance India will pay USD 1.06bn – working with government to expedite refund – special dividend expected early 2022

We continue to see large upside for the Capricorn (recently changed name from Cairn)

Our SOTPs comes in at around 280p implying a 45% upside from here and see this update as a potential catalyst – we have adjusted our pt a bit downwards as oil is off the highs from last year

CNE LN – Update – Reiterate BUY, +35% ABS – We continue to see a +50% upside although catalyst probably not until next year

Wednesday • 03 November 2021 • 14:18

*Announced today that it is working with Indian government to expedite refund

*The company has dropped litigation and accepted the governments offer to settle for USD 1bn – inline with what was widely expected

*The company reiterates the early 2022 guidance for the special dividend (as previous announced although investors were being more hopeful)

*The allocation of the USD 1bn is expected to take form of up to USD 700m to be returned to shareholders via special dividend and buyback (USD 500m/ USD 200m split) as announced by the company back in September

*CNE said today that they will commence the filing of the necessary documentation “intimating the withdrawal, termination and/or discontinuance of various enforcement actions

*Estimates by legal experts has been that when the filing process starts it take 3-5 months, depending on if the parties wait for deadlines or expedite

*The name remain one of our top picks and according to our conservative SOTP we still get to a 300p PT which implies a >50% upside potential  

CNE LN – Update, Reiterate BUY, -11% ABS – India seeking to scrap retrospective tax rule putting wheels back in motion for CNE’s case, we see a +200% upside


Thursday • 05 August 2021 • 15:06


*Recent sell-off creates a great opportunity to add to the CNE position which has unjustly suffered from the recent sell-off in oil as the company has limited exposure to oil compared to the arbitration case

*The finance ministry said today that they are proposing a bill that no tax demand shall be raised in future on the basis of the said retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before 28th May, 2012 – https://www.livemint.com/economy/govt-to-amend-income-tax-act-nullify-retro-tax-demands-11628164822039.html

*”It is further proposed to provide that the demand raised for indirect transfer of Indian assets made before 28th May, 2012 shall be nullified on fulfilment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc., shall be filed. It is also proposed to refund the amount paid in these cases without any interest thereon” – This all reads very positive for us in the CNE case

*CNE’s assets seized by the government were in relation to an IPO back in 2006 which 8 years later resulted in India freezing and selling a stake held by CNE worth USD 1bn

*To set this into perspective it is worth noting that CNE’s current market cap is USD 860m leaving a huge upside potential as we are seeing little to none of the USD 1bn factored into the current price

*With this positive news development we finally see some movement again

*The international arbitration court has already ruled that India should pay CNE back USD 1.4bn including interest – India has appealed this arguing that taxation is not part of the international investment treaty (there was no option to appeal the ruling itself)

*Elsewhere, a couple of weeks ago a French court froze some real estate assets held by India in Paris as a result of the arbitration ruling – CNE has filed in multiple jurisdiction to freeze assets which is putting pressure on India

*We have a price target of 380p on CNE if we factor in the USD 1bn that India sized – this implies a 200% upside to the current share price

*We have reached out to IR for comments

CNE LN – Reiterate BUY +31% ABS, +15% REL – Appeal inline


Thursday • 11 March 2021 • 09:52


*We see it as a good entry point here for anyone not involved in the name

*We see this recent sell-off as more fast money trying to profit from any announcement which is causing volatility

*Investors were hoping for more of a ‘solution’ being released with the earnings on Tuesday while to us it was quite clear that the India government is unlikely to want to pay in the middle of Covid and therefore trying to postpone

*We are medium term holders as we expect that India will be forced to pay one way or the other although an appeal can drag this out

*The new rhetoric from the India government is implying that CNE acquired the national resources through corruption which could open up a completely new case although don’t see this as having any legs

*CNE reiterated in the results that the ruling can be enforced in over 160 jurisdictions around the world and they have already registered the award in multiple of those jurisdictions and begun the process of identifying assets, against which action could be taken, should that be required

*CNE also been exploring selling the claim to a third party or lend money against the claim

*A SOTP valuation using the full Tax arbitration award shows the stock trading at a 60% discount to NAV implying a price target of 450p – in case they settle with a third party for half the claim the pt we get to is 320p

CNE LN – BUY – Update – India challenged VOD LN tax arbitration case


Monday • 08 February 2021 • 14:21


*CNE case under consideration

*The details terms of the award are under examination by the Government

{NSN QO7NJM073NCW <GO>}

Thoughts: We were expecting India to challenge both cases. A sell-off on this could therefore provide a nice opportunity to add. They have not yet confirmed what they are planning for the CNE case but the fact that CNE is targeting assets to seizes put the government under much more pressure than in the VOD case where there is no direct cash implication. We expect them to challenge the CNE ruling as well.

CNE LN – Reiterate BUY +28% ABS, +20% REL – Positive sentiment over the weekend, should double over time


Monday • 01 February 2021 • 08:31


*Interesting article in the Business standard saying India could give CNE some oil fields instead of paying the USD 1.4bn citing sources

*Article calls it a win-win to get an established exploration and production (E&P) firm back to India while their economy is struggle with Covid leaving limited options for payment

*Points out US oil firm ConocoPhillips managed to seize Venezuelen assets post its awarded arbitration

*Our thoughts are that while cash would be preferred, the sentiment of India looking at options to pay and having worries about assets being seized very positive for CNE

*A SOTP valuation using the full Tax arbitration award shows the stock trading at a 55% discount to NAV implying a price target of 410p

*While the stock spiked on the arbitration award before Christmas it has since gradually been selling off and is now -15% lower

*This pull back provides another add or initiate opportunity

CAIRN ENERGY – BUY – UPDATE +32% so far: BlackRock pushing India


Monday • 25 January 2021 • 08:54


– PTI reports BlackRock, MFS, Franklin Templeton and Fidelity ask India – as well as the governments of their country, the US and the UK – to honor arbitration award citing sources

Out thoughts: Not sure it will push the Indian’s into immediate payment but puts pressure on them to respond and get the process moving. We see Cairn as a buy or chance to add below 180.

Full repayment of its claim against India gives us a 350p PT

Half of its claim against India being repaid gives us a 250p PT

Currently +32% on trade…

CNE LN– UPDATE +50% to date – Hold for now but looking to add on weakness


Wednesday • 20 January 2021 • 16:09


*Seeing a few of the banks downgrade to Neutral over the last week after the stock has 25% rally since the Indian tax case announcemnet back on the 23rd December

*While we still see a +80% upside we believe that we believe this will take some time as we expect that India will appeal the process by arguing that tax matteres are not part of the international tax treaty

*We do not expect India to be succesful in its appael but more a political way to delay the inevitable as the timing of the payment politically comes in a very tricky time for the government in the middle of Covid

*Large financial flexibility of the group allows for large upside potential, the company is net cash positive even without taking the Indian tax ruling into consideration

*The stock goes ex its 32p special dividend on Monday – proceeds from the Senegal sale – a simultaneous share consolidation will take place to neutralize the effect on the share price

CNE LN – UPDATE +20.6% so far: Reiterate Buy – Special dividend inline


Thursday • 17 December 2020 • 17:53


*Received government approval for Senegal sale – to pay a 32p special dividend – goes ex 8 January, EGM on 8th January to vote on the distribution

*Timing and amount inline with what the company has previously indicated, next up on our catalyst call is the India ruling which could effectively double the market cap of the company

CNE LN – UPDATE – Upside remains huge – Ruling expected shortly


Thursday • 26 November 2020 • 10:47


*Market cap could effectively double on a positive ruling

*Decision likely already taken – now just paperwork

*Decision cannot be challenged – only process

*Speculation in press in India is that India could challenge the process saying that tax is not part of the bilateral investment treaty

*CNE does not think discussion about process has any merit and points out this speculation been going around for a long time

*Political decision as well – some speculation that by challenging the process India could push the costs away from Covid times

*A lot of people drawing parallels between Vodafone case and Cairn – a big difference is that Vodafone ruling does not come at a cost for India while CNE ruling would imply a cost – along with the cases also being very different

*Regarding the special dividend CNE still waiting for the final approval for the Senegal sale – expected by year end – we expect the dividend to be around 32p but will be paid through a share consolidation rather than a dividend payout

CNE LN – The New Star of Bollywood – Share Price Could Double!


Thursday • 15 October 2020 • 09:15


*Guidance for outcome of the USD 1.4bn arbitration case is still end of summer 2020

*Covid should not have delayed much as independent arbitrators are used to working remotely and based in 3 different countries

*Both parties have looked at losses suffered and not far apart in estimates

*Outcome of arbitration cannot be appealed although process can be

*Very few countries in the world do not respect the outcome at bilateral international courts – India said will adhere

*Case boils down to a reorganization the group did as part of an IPO in India in 2006 – they had to transfer some assets but none of them changed group ownership – 8 years later the government froze the remaining stake CNE held in the IPO worth USD 1bn

*A positive ruling in the arbitration could more than double the company’s current USD 1.1bn market cap

*Vodafone tax case in India very different, involved an actual transaction, but Vodafone remains invested in India and did not face any financial penalty

*CNE remains confident about its position in the case

Future of company leaves upside as well

*Large financial flexibility of the group allows for large upside potential

*Want to broaden the production base and also focused on ESG commitments – Now in a position where they can acquire more licences or even look at acquiring other players

*Shareholder return of Senegal sale completion expected by year end pending regulatory approval – worth approx. 32p but will likely be done as a share consolidation

*Also has addition upside potential in Senegal sale – can get an additional 13p per share in contingent payments by 2023

*Current OPEX cost per barrel is around USD 18

Valuation

Our SOTP valuation shows CNE trading at a:

13% discount to NAV without including India (pt 165p)

60% discount to NAV with a full repayment of its claim against India (pt 350p)

45% discount to NAV with a half of its claim against India being repaid (pt 250p)

BUY CNE LN – India Update – Reiterate Buy

Statement from company overnight saying the company has now concluded all necessary steps required for receiving refund, upon acceptance India will pay USD 1.06bn – working with government to expedite refund – special dividend expected early 2022

We continue to see large upside for the Capricorn (recently changed name from Cairn)

Our SOTPs comes in at around 280p implying a 45% upside from here and see this update as a potential catalyst – we have adjusted our pt a bit downwards as oil is off the highs from last year

CNE LN – Update – Reiterate BUY, +35% ABS – We continue to see a +50% upside although catalyst probably not until next year

Wednesday • 03 November 2021 • 14:18

*Announced today that it is working with Indian government to expedite refund

*The company has dropped litigation and accepted the governments offer to settle for USD 1bn – inline with what was widely expected

*The company reiterates the early 2022 guidance for the special dividend (as previous announced although investors were being more hopeful)

*The allocation of the USD 1bn is expected to take form of up to USD 700m to be returned to shareholders via special dividend and buyback (USD 500m/ USD 200m split) as announced by the company back in September

*CNE said today that they will commence the filing of the necessary documentation “intimating the withdrawal, termination and/or discontinuance of various enforcement actions

*Estimates by legal experts has been that when the filing process starts it take 3-5 months, depending on if the parties wait for deadlines or expedite

*The name remain one of our top picks and according to our conservative SOTP we still get to a 300p PT which implies a >50% upside potential  

CNE LN – Update, Reiterate BUY, -11% ABS – India seeking to scrap retrospective tax rule putting wheels back in motion for CNE’s case, we see a +200% upside


Thursday • 05 August 2021 • 15:06


*Recent sell-off creates a great opportunity to add to the CNE position which has unjustly suffered from the recent sell-off in oil as the company has limited exposure to oil compared to the arbitration case

*The finance ministry said today that they are proposing a bill that no tax demand shall be raised in future on the basis of the said retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before 28th May, 2012 – https://www.livemint.com/economy/govt-to-amend-income-tax-act-nullify-retro-tax-demands-11628164822039.html

*”It is further proposed to provide that the demand raised for indirect transfer of Indian assets made before 28th May, 2012 shall be nullified on fulfilment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc., shall be filed. It is also proposed to refund the amount paid in these cases without any interest thereon” – This all reads very positive for us in the CNE case

*CNE’s assets seized by the government were in relation to an IPO back in 2006 which 8 years later resulted in India freezing and selling a stake held by CNE worth USD 1bn

*To set this into perspective it is worth noting that CNE’s current market cap is USD 860m leaving a huge upside potential as we are seeing little to none of the USD 1bn factored into the current price

*With this positive news development we finally see some movement again

*The international arbitration court has already ruled that India should pay CNE back USD 1.4bn including interest – India has appealed this arguing that taxation is not part of the international investment treaty (there was no option to appeal the ruling itself)

*Elsewhere, a couple of weeks ago a French court froze some real estate assets held by India in Paris as a result of the arbitration ruling – CNE has filed in multiple jurisdiction to freeze assets which is putting pressure on India

*We have a price target of 380p on CNE if we factor in the USD 1bn that India sized – this implies a 200% upside to the current share price

*We have reached out to IR for comments

CNE LN – Reiterate BUY +31% ABS, +15% REL – Appeal inline


Thursday • 11 March 2021 • 09:52


*We see it as a good entry point here for anyone not involved in the name

*We see this recent sell-off as more fast money trying to profit from any announcement which is causing volatility

*Investors were hoping for more of a ‘solution’ being released with the earnings on Tuesday while to us it was quite clear that the India government is unlikely to want to pay in the middle of Covid and therefore trying to postpone

*We are medium term holders as we expect that India will be forced to pay one way or the other although an appeal can drag this out

*The new rhetoric from the India government is implying that CNE acquired the national resources through corruption which could open up a completely new case although don’t see this as having any legs

*CNE reiterated in the results that the ruling can be enforced in over 160 jurisdictions around the world and they have already registered the award in multiple of those jurisdictions and begun the process of identifying assets, against which action could be taken, should that be required

*CNE also been exploring selling the claim to a third party or lend money against the claim

*A SOTP valuation using the full Tax arbitration award shows the stock trading at a 60% discount to NAV implying a price target of 450p – in case they settle with a third party for half the claim the pt we get to is 320p

CNE LN – BUY – Update – India challenged VOD LN tax arbitration case


Monday • 08 February 2021 • 14:21


*CNE case under consideration

*The details terms of the award are under examination by the Government

{NSN QO7NJM073NCW <GO>}

Thoughts: We were expecting India to challenge both cases. A sell-off on this could therefore provide a nice opportunity to add. They have not yet confirmed what they are planning for the CNE case but the fact that CNE is targeting assets to seizes put the government under much more pressure than in the VOD case where there is no direct cash implication. We expect them to challenge the CNE ruling as well.

CNE LN – Reiterate BUY +28% ABS, +20% REL – Positive sentiment over the weekend, should double over time


Monday • 01 February 2021 • 08:31


*Interesting article in the Business standard saying India could give CNE some oil fields instead of paying the USD 1.4bn citing sources

*Article calls it a win-win to get an established exploration and production (E&P) firm back to India while their economy is struggle with Covid leaving limited options for payment

*Points out US oil firm ConocoPhillips managed to seize Venezuelen assets post its awarded arbitration

*Our thoughts are that while cash would be preferred, the sentiment of India looking at options to pay and having worries about assets being seized very positive for CNE

*A SOTP valuation using the full Tax arbitration award shows the stock trading at a 55% discount to NAV implying a price target of 410p

*While the stock spiked on the arbitration award before Christmas it has since gradually been selling off and is now -15% lower

*This pull back provides another add or initiate opportunity

CAIRN ENERGY – BUY – UPDATE +32% so far: BlackRock pushing India


Monday • 25 January 2021 • 08:54


– PTI reports BlackRock, MFS, Franklin Templeton and Fidelity ask India – as well as the governments of their country, the US and the UK – to honor arbitration award citing sources

Out thoughts: Not sure it will push the Indian’s into immediate payment but puts pressure on them to respond and get the process moving. We see Cairn as a buy or chance to add below 180.

Full repayment of its claim against India gives us a 350p PT

Half of its claim against India being repaid gives us a 250p PT

Currently +32% on trade…

CNE LN– UPDATE +50% to date – Hold for now but looking to add on weakness


Wednesday • 20 January 2021 • 16:09


*Seeing a few of the banks downgrade to Neutral over the last week after the stock has 25% rally since the Indian tax case announcemnet back on the 23rd December

*While we still see a +80% upside we believe that we believe this will take some time as we expect that India will appeal the process by arguing that tax matteres are not part of the international tax treaty

*We do not expect India to be succesful in its appael but more a political way to delay the inevitable as the timing of the payment politically comes in a very tricky time for the government in the middle of Covid

*Large financial flexibility of the group allows for large upside potential, the company is net cash positive even without taking the Indian tax ruling into consideration

*The stock goes ex its 32p special dividend on Monday – proceeds from the Senegal sale – a simultaneous share consolidation will take place to neutralize the effect on the share price

CNE LN – UPDATE +20.6% so far: Reiterate Buy – Special dividend inline


Thursday • 17 December 2020 • 17:53


*Received government approval for Senegal sale – to pay a 32p special dividend – goes ex 8 January, EGM on 8th January to vote on the distribution

*Timing and amount inline with what the company has previously indicated, next up on our catalyst call is the India ruling which could effectively double the market cap of the company

CNE LN – UPDATE – Upside remains huge – Ruling expected shortly


Thursday • 26 November 2020 • 10:47


*Market cap could effectively double on a positive ruling

*Decision likely already taken – now just paperwork

*Decision cannot be challenged – only process

*Speculation in press in India is that India could challenge the process saying that tax is not part of the bilateral investment treaty

*CNE does not think discussion about process has any merit and points out this speculation been going around for a long time

*Political decision as well – some speculation that by challenging the process India could push the costs away from Covid times

*A lot of people drawing parallels between Vodafone case and Cairn – a big difference is that Vodafone ruling does not come at a cost for India while CNE ruling would imply a cost – along with the cases also being very different

*Regarding the special dividend CNE still waiting for the final approval for the Senegal sale – expected by year end – we expect the dividend to be around 32p but will be paid through a share consolidation rather than a dividend payout

CNE LN – The New Star of Bollywood – Share Price Could Double!


Thursday • 15 October 2020 • 09:15


*Guidance for outcome of the USD 1.4bn arbitration case is still end of summer 2020

*Covid should not have delayed much as independent arbitrators are used to working remotely and based in 3 different countries

*Both parties have looked at losses suffered and not far apart in estimates

*Outcome of arbitration cannot be appealed although process can be

*Very few countries in the world do not respect the outcome at bilateral international courts – India said will adhere

*Case boils down to a reorganization the group did as part of an IPO in India in 2006 – they had to transfer some assets but none of them changed group ownership – 8 years later the government froze the remaining stake CNE held in the IPO worth USD 1bn

*A positive ruling in the arbitration could more than double the company’s current USD 1.1bn market cap

*Vodafone tax case in India very different, involved an actual transaction, but Vodafone remains invested in India and did not face any financial penalty

*CNE remains confident about its position in the case

Future of company leaves upside as well

*Large financial flexibility of the group allows for large upside potential

*Want to broaden the production base and also focused on ESG commitments – Now in a position where they can acquire more licences or even look at acquiring other players

*Shareholder return of Senegal sale completion expected by year end pending regulatory approval – worth approx. 32p but will likely be done as a share consolidation

*Also has addition upside potential in Senegal sale – can get an additional 13p per share in contingent payments by 2023

*Current OPEX cost per barrel is around USD 18

Valuation

Our SOTP valuation shows CNE trading at a:

13% discount to NAV without including India (pt 165p)

60% discount to NAV with a full repayment of its claim against India (pt 350p)

45% discount to NAV with a half of its claim against India being repaid (pt 250p)

Serban’s Crypto Picks: Trading Call – BUY $FORTH

We’re now buying $FORTH at $16.7, setting a TP at $22.3 and SL at $15.