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HRouge Profile picture
@hareng_rouge
Mar 8, 2020 • 4 tweets • 3 min read • Read on X
Here's a very simple idea and thread for a play on #Coronvirus and an oil price war: the nitrogen complex - because as well as Corona, China and Iran are also major exporters of Urea.

China was the marginal producer. Here's what #CF CF Industries said on their last call on China Image
Here's what OCI said regarding China and Iran Image
Here is what the price of Urea has done during corona. Profercy note China is absent from the export market. Image
Gas is the Western feedstock whereas China uses anthracite coal. Gas is cheap and getting cheaper. Here's #CF industries sensitivity to cheaper gas and more expensive urea. Further catalyst is the annual Indian tendering in a couple of weeks or so. #CF and peers should overearn. Image

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More from @hareng_rouge

HRouge Profile picture
Dec 22, 2021
$RADA makes small tactical military radars. The recent sell off hasn't made it cheap but it has begun to bring it closer to GARP territory

It's a rare pure-play on a theme that's perhaps not yet widely appreciated and is hard to access directly but you can see it in the numbers
Here's where it trades on a forward sales multiple against some of the big diversified defence majors - has lost much of the premium and now sits a little off the top end. Brits bottom of the pile.
Same group of majors but here on forward EBITDA multiples and towards the bottom end excluding the UK companies.
Read 19 tweets
HRouge Profile picture
Nov 12, 2021
Naive view but I think Hunting #HTG may be on its way back to Covid lows because it's orphaned on the wrong market and there's an information disconnect - if so, my guess is that it's pretty oversold here. Image
The company isn't a pure play but it's good enough to say it's very shale exposed, towards the completion side vs the drilling side of things.

Three year chart to around May 2021: HTG in green vs several US oil services ETFs - as you can see, they trade in lockstep. Image
Same chart but on a 2021 YTD basis and it starts diverging somewhere around mid summer. Image
Read 15 tweets
HRouge Profile picture
Nov 9, 2021
IG Design #IGR was a ten bagger in the 5 years leading up to Covid. An update a fortnight ago dropped the shares by half and erased all the gains in the most recent five years. Knife catching and broken growth this soon is almost always a mistake but IG may be an exception here. ImageImageImage
My basic premise with it is that the accounts are a complicated nightmare (CTRL+f for "adjust" is 232 hits in the last FY report) but most immediately, that this is right now a gross margin story - I think there are grounds to at least consider whether IG can be given a pass here
Unfortunately, it does mean walking through it so grab a.. (just no) so anyway, here's the rough idea: Pre-covid in white, M&A growth darling, 20% gross margins. Forget the op margin for now - I'm stripping out the adjustments that made adjusted whatever go up and to the right Image
Read 20 tweets
HRouge Profile picture
Oct 5, 2021
Saw a one-line tweet the other day mentioning McColls #MCLS as one of 2 highest conviction names.

I think I see why: there's a metamorphosis happening underneath and reasonable path to PE and FCF multiples between 2-3 plus a growth narrative, all under that lovely grim exterior
Story is that they're shrinking. 1500+ stores 2 years back, to 1050 by the end of FY21

Also changing: culling small newsagent shops to focus towards larger, more profitable grocery-heavy stores. So far, so worthy - but the real interest is the transformation into Morrisons Daily
Company raised recently to accelerate a programme converting 350 stores into these Mini Morrisons. They're at 56 today, will be 350 by end FY22

Cost is £90K per shop, what they call "cash payback" is 2-3 years and so far they're providing pretty immediate LFL sales growth of 25%
Read 12 tweets
HRouge Profile picture
Sep 23, 2021
What does Sneller see to get such sudden FOMO for the old zombie that is Iofina #IOF? If you recall the name, it should produce revulsion but a few things have changed and there's a chance it may be about to make some money. ImageImage
IOF produces Iodine in the US via O&G brine. Iodine is a beneficiary of industrial recovery generally and covid specifically - the largest use is used as x-ray contrast which may benefit demand from catch up on delayed hospital treatment.

And because it's 2021, inevitably: Image
Production is trapped on the wrong side of the Pacific: the two major production centres are Japan and Chile - so you have the obvious logistics issues for both and potentially politics for the latter.
Read 12 tweets
HRouge Profile picture
Aug 20, 2021
I think it's worth revisiting Aquis #AQX here in light of a couple of data points that have since come out.

There are three main parts to the co: a stock exchange (AQSE); a tech licencing biz and their multilateral trading facility (AQXE) - it's this last one I want to look at.
First is the RNS from earlier this month announcing their MTF (investopedia.com/terms/m/multil…) had achieved 6.2% market share. Across the €53.6B traded on AQXE in July, this came out to €1.7B a day.

Those 6.2% and €1.7B are quite significant numbers and I'll come back to them later Image
In the period since the beginning of 2018 market share has risen from 1.72% to that 6.2% above. Here's how that value traded looks. Image
Read 15 tweets

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