Company Reports

KEY @ Barclays: Delusional on Returns, Deluge of Credit Losses?


KEY was another cool regional bank presenter that was not too panicky on its future credit development and reserves. We beg to differ and see a big capital need if losses go to new highs given the health pandemic. Sell Stock, Buy benchmark Bonds on relative value basis. Higher regulatory and counterparty risk. 

Ferroglobe PLC: 2Q20: Alloy! Tech Wreck Resistant! Buy! Buy! Buy!


Ferroglobe has an improved EBITDA 2Q20 quarter. And it has fulcrum security leverage on its 9 3/8s notes and as it renegotiates bank lines. Good for the bonds, but bad for the stock in the short term. Buy Bonds, Sell Stock. 

Taseko Mines Ltd: 2Q20: Mr. Copper Dumpster? or David Copperfield Levitator?


Copper's on a roll, and Viola Risk is riding the bull case with Taseko Mines, among the most cost efficient in the world. As the world normailizes, post-Covid-19, Taseko will rocket higher on its  bonds (BUY) and stock (BUY). 

Curo Group Holdings: 2Q20: Pay Up or Else!


Curo may have the magic elixer to ricochet out of the deep subprime lending doldrums. Though VERT risk is high, Curo does have strong equity drivers to reset the EBITDA trend rate higher. Buy on HY Bonds, Buy on Stock. 

Ferroglobe PLC: Pliable Alloy Maker Can Limbo into Many Profitable Scenarios


Ferroglobe (GSM) is a flexible metal alloy production company that is able to expand its cashflow as the pandemic conditions and market pricing improves. Can weather many bankruptcy scenarios given low entry dollar price. Viola Risk a Buy on its 9.375% Sr. Notes with a YTW of 155%. Has Very High VERT indicators for Very Positive event risk attributes. 

GS 2Q20: 1MDB is One Big Black Eye; Sell Capital & Reg-Risk Stacks


Goldman Sachs (GS) used to be at the top of Mt. Olympus as a god amongst mere mortal broker-dealers/investment bankers. Now it is pin-balling off the regulatory bumpers as it tries to flipper its way to more sustainable performance. We do not see it. Sell capital and regulatory-risk stacks. 

BAC 2Q20: Bad Across Country: High Noon on Deposits


BAC is treading water hard as deposit spread pool is draining away. Lots of exertion and frustration as cost of its core deposit system offseting potential return on invested capital. Sell entire capital stack, although Stock could get attractive again if valuations improve even more. Counterparty risk and Regulatory risk are both Medium. 

WFC 2Q20: Wobbly Wells, Runaway Bronco Needs to be Lassoed


Wells Fargo fell apart as it cut its dividend  by 80% and bemoaned its situation once again. The market has run out of patience as this under regulated bank has many credit black holes, poorly managed ALM/risk mgt. Poor economic earnings hurts ability to generate organic capital. Strong Sell on Stock, Sell on bonds/preferred stock, High Risk for both Counterparty and Regulatory exposures.

Citigroup: Strong CCAR, Skating on CV19 Reserve Thin Ice, Esp. LatAm


Citi did well on the 2020 DFAST Stress Test, but 2Q20 results were less uplifting as North America Consumer shows credit, revenue weakness. International Consumer will worsen even though it looks to hold in. Buy on Stock, Sell on debt, but Buy on Perpetual Pfd. Regulatory risk is High and Counterparty Risk Medium-to-High. 

JPM 2Q20: Capital Supreme even with SCB


JPM exhibits balance sheet and economic earnings heft as it lowers its economic outlook, but leaps over regulatory capital minimums. Sell on debt but Buy on Perpetual Preferreds. Strong Buy on Stock. Regulatory Risk Medium, Counterparty Risk Low-to-Medium. 

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