Q&A on the Cyprus situation

How big is Cyprus’ economy?  GDP of €18.0bn as of 2011 (latest official figure)   Why does Cyprus need a bailout? Did Cyprus have an irresponsible/spendthrift Government? No, it is its banks that are the problem. Cyprus’ Debt/GDP ratio stood at 49% in 2008 and rose to 71% by 2011 as a result of the […]

Rosneft-TNK BP: The biggest takeover in the history of the oil industry is finally completed

TNK-BP Energy Group Inc. Enterprise Value: $55.7 bn Rosneft Market Cap (as of 22/03/13) : $81.60bn British Petroleum  Market Cap (as of 22/03/13) : $133.37bn Deal type: Acquisition increase from 50% to 100% all-cash Rosneft, the Russian state oil giant completed on the 21st of March the acquisition of the remaining 50 percent stake in […]

Trade idea: Spread Long S&P 500 short Nikkei

We believe that in case of a strong distress the Nikkei index can suffer the most. Why not European equities? We believe that European equities have already suffered from the recent turmoil while the Japanese index has been heavily unaffected and has recently rallied dramatically, completely diverging from fundamentals whose forecasts have continuously declined recently. […]

Trade idea: Go long the Dollar

We believe that the strong fundamentals of the US economy will further push the USD that recently has underperformed its counterparties. However we believe that in the long run the currency will appreciate. We suggest two ways to take advantage of this outlook: First by selling put options on the USD/JPY strike 94.00 maturity May13 […]

The EU financial transaction tax (EU FTT, aka the “Tobin Tax”)

The EU financial transaction tax (EU FTT, aka the “Tobin Tax”)   The tax that divides Europe. “Any US or Asian institutions trading securities issued in France, Germany, Italy or Spain would also be taxed”.   Aims: Raise new revenues for the EU, thus plugging gaps in national budget deficitsand hit speculative trading.   Which […]

Update on Dell’s proposed LBO

We are writing a short follow up on Dell’s LBO, which we covered on February the 16th. Following his opposition to the offer of Michael Dell and Silver Lake to take Dell private, Carl Icahn, the former corporate raider turned activist investor (who is also involved in the Herbalife situation we analysed last week), started […]

KKR signs agreement to acquire Gardner Denver

Kohlberg, Kravis and Roberts & Co LP market cap (as of 15/03/2013): $13.27 bn Gardner Denver Inc. market cap (as of 15/03/2013): $ 3.69 bn Deal Type: LBO 100% On the 8th of March it has been reported that Gardner Denver and KKR have signed a definitive agreement in which the private equity fund will […]

Trade idea: take advantage of the low-volatility environment with a butterfly strategy

Trade idea: take advantage of the low-volatility environment with a butterfly strategy After breaking several all-time highs the US indices are now poised to move higher with less and less volatility. Good news coming from the job market and retail sales is welcome with a sudden decrease in implied volatility and low levels of realized […]

Herbalife: Hedge Fund Titans fight or does it really matter?

Herbalife LTD. is a small cap company, by every measure. It sells weight management, nutritional supplement, energy, sports & fitness products and personal care products. It was founded in 1980 by Mark Hughes, who is still the president. It has a market capitalization of $4.27bn and some growing net sales. These were $3.5bn at the […]

HSBC continues its refocusing effort

HSBC Holdings, Plc Market Cap (as of 8/03/13):  $203.55bn Newcastle Investment Corporation Market Cap (as of 8/03/13): $2.83bn On March the 5th HSBC Finance Corporation, a wholly owned subsidiary of HSBC Holdings Plc, agreed to sell a portfolio of unsecured and homeowner loans to Newcastle Investment Corporation and SpringLeaf Finance, Inc. in a move to […]

London Stansted purchased by Manchester Airports Group

Manchester Airport Group PLC – Market Cap: N/A (private company) Heathrow Airport Holdings LTD – Market Cap: N/A (private company) Deal type: 100% Acquisition Size: £1.5 bn Heathrow Airport Holdings LTD announced on 28th February that it has completed the sale of its 100% interest in Stansted Airport LTD to Manchester Airports Group (MAG) for […]

Trade idea: exploit the autocorrelation of all-time highs

Trade idea: exploit the autocorrelation of all-time highs The US is growing, unemployment is back to 2008 level and confidence has increased. Stocks followed through and set an all-time high. The situation we are in puts many investors out of their comfort zone. Many seek to get back into stocks, attracted by the appealing breeze […]

Trade idea: bullish setup has formed on Facebook

Technical analysis: Facebook has been out of favour for a while, following a disappointing IPO that pushed into negative territory the P&L of the new shareholders. However, during the downturn a bullish pattern has formed. The stock trajectory has created a cup-and-handle that historically predicts a surge in price. The main reason behind the pattern […]

Trade idea: Long Eurostoxx 50

Trade idea:  Long Eurostoxx 50 We believe that the current bullish sentiment can continue in the short term so we suggest to take a long position in the risky assets that have been underperforming during the recent weeks and that did not break out their recent highs. Scanning the markets we see that this description […]

Follow-up on last week’s trade idea

Follow-up on last week’s trade idea Last week we recommended to exploit the breakouts that many stocks were poised to make. A breakout is a situation where a stock is about to break highs but it’s resilient to do so as it is held back by fear. A increase in bullish volume can unlock this […]

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