ToffCap's Monday Monitor #1
We are pleased to introduce a brand new weekly segment: ToffCap’s Monday Monitor.
ToffCap’s Monday Monitor provides a weekly snapshot of some of the largest changes in ToffCap’s watchlist. New (potentially) interesting investments are regularly added to the list: companies that screen cheaply, catalyst trades and notable company results which might indicate changes in a company’s investment case. The list is a work in progress; we expect it to continue to grow going forward. If you have interesting additions to the list, feel free to contact us at contact@toffcap.com or on Twitter.
Enjoy!
Disclaimer. ToffCap’s Monday Monitor is provided for informative purposes only. No due diligence has (yet) been performed on the names on this list. The list might change strongly on a weekly basis. This overview does not constitute advice; always do your own due diligence.
Overview
I. Company watchlist
II. Catalyst trades
III. Notable company results (mostly European)
I. COMPANY WATCHLIST
Annotations for a selection of interesting companies with seemingly strong upside potential.
Additions this week:
Atlas Energy Solutions (AESI US – $ 1.7bn). Recent IPO. The only public pure play Permian in-basin proppant provider. Screens cheaply. Net cash balance sheet. Sector decimated. Short investment case: AESI is developing the Dune Express, a 42 mile conveyor system. System would massively drop operating costs and generate strong cash flow. Potential to be valued more like midstream company (i.c. double the multiple) + multiple upside if sentiment turns + strong FCF generation potential. Operational risks.
Unit Corporation (UNTC US – c. $ 300m after spec div.). Oil & Gas company. Set for strong FCF generation given good market fundamentals. Could be valued at ~2x ev/ebitda 2023e and 20-30% FCF yield. Insiders own >40%. Shareholder friendly capital return policy.
Oddfjell Technology (OTL Norway – c. $ 200m). Offshore energy service provider. Relatively recent listing. Strong sector tailwinds providing plenty of runway. Cheap (relative) valuation. More info Alexander Eliasson (@alexeliasson).
ADF Group (DRX Canada – $ 55m). North American steel co specialised in designing and engineering complex steel structures for non-resi. Very strong growth in company backlog provides confidence in future potential. Large capex program done; trading at <4x FCF 2023e + good growth ahead.
FitLife Brands (FTLF US – $ 77m). Good progress on ecommerce transition. Acquisition of Mimi’s Rock at attractive valuation. Potentially transformative. Management aligned. Trading at <7x FCF 2023e for >20% growth of ecommerce channel.
Tempest Therapeutics (TPST US – $ 22m). Biotech gamble. Reverse merger in 2021. Recently published first set of promising results. Partnering with Roche.
II. CATALYST TRADES
Additions this week:
Cia Brasileira de Distribuicao (CBS US). Spin-off with remainco trading at negative value. Great write-up from Clark Square Capital.
Crane (CR US). Spin-off.
Acrivon Therapeutics (ACRV US). Share unlock: >60% of shares outstanding, mid-May.
ASP Isotopes (ASPI US). Share unlock: >90% of shares outstanding, early-May.
Lastminute.com (LMN Switserland). Exploring strategic alternatives.
Liquida Technologies (LQDA US). Patent litigation. Write-up.
III. NOTABLE COMPANY RESULTS (mostly European)
A selection of comments of company results, potentially indicating a notable change in a company’s investment thesis and / or a dislocation of the price compared to fundamentals.
Additions this week:
Equinor. Strong results. Solid FCF generation and cash return.
Vicat. Strong indications of a rebound of end-markets.
Technip Energies. Share price down after results. Move unjustified in our opinion given strong secular tailwinds.
Moncler. Stellar results. Growth momentum intact. No signs of recession here.
Logista. 2023 guidance already revised upwards. Quality compounder that keeps performing, trading at LDD p/e.
Trigano. Strategic deal announced to acquire housing unit Bénéteau.
IAG. Good cost control + reassurance of potential deleveraging.
Software AG. Takeover battle (finally).