>>> US Early premarket gappers

Early premarket gappers
Gapping up: RPTP +19.6%, CIE +13.3%, IMMU +9.4%, NTAP +8.8%, SPHS +5.6%, NTES +3.6%, WMT +3.5%, LB +2.9%, GFI +2.6%, ARWR +2.5%, RIO +2.3%, JKS +2.3%, FCX +2.3%, YY +2.3%,BHP +2.2%, BBL +2.1%, SBGL +2%, MT +1.9%, CHK +1.9%, AU +1.7%, AG +1.7%, SAND +1.6%, SNPS +1.6%, SHPG +1.1%, MRO +1%, GG +1%, GDX +0.9%, BONT +0.6%

Gapping down: CERU -60.6%, EARS -54.2%, PTLA -18.4%, HEB -16.7%, JNP -15.3%, BGG -14%, ARAY -13.2%, OMED -10.3%, KEYS -9%, AEG -4.8%, A -3.7%, WUBA -3.2%, STEM -2.7%, TWTR-2.6%, UIHC -1.4%, CSCO -1.4%, SDRL -1.1%, DB -1.1%, SCTY -0.8%

>>> TOM2 NA - +2% not far from recent highs (8.5 and 8.47 in June)



From: LCHEKROUN@makor-cm.com At: 08/18/16 11:10:24
To: LAURENT CHEKROUN (MAKOR SECURITIES LO)
Subject: Fwd:>>> TOM2 NA - +2% not far from recent highs (8.5 and 8.47 in June)

An interesting name - perfect match for many players. As mentioned few time for the last few weeks (months & years) – let me know if you want to talk about it.

 

Weekly setup = bullish towards 8.92

 

 

 

 

(MS) Gold & Gold Equities - the big disconnect



Gold equities have re-rated to historical peaks or above. Without diminishing the possibility of more upside if risk aversion continues, we estimate that equities are discounting a gold price that is >20% above spot through perpetuity. Anglogold, Centamin, GoldCorp, Zhaojin are relative global picks

 

Equity re-rating has driven valuations to levels that are at or above historical peaks. Total shareholder returns for precious metals equities have so far exceeded 169% YTD. This has propelled valuations to levels that are at or above historical peaks for most equities under our coverage universe. While lifting gold prices have driven upgrades to consensus earnings, we maintain more than 50% of the equity performance is explained by multiple re-ratings. Our analysis suggests that the market is paying a 32% premium to what it has historically paid for reserves and resources across our global precious metals coverage.

 

An average 24% upside to spot gold is currently priced in. Without diminishing the upside to equities if risk aversion continues, shares are discounting a gold price that is, on average, 24% above spot through perpetuity if we use our base case costs of capital. Alternatively, the implied gold price declines to US$1,437/oz if we use a normalized 5% WACC - still 6% higher than current spot prices.

 

Balance sheets, operating risks remain low in absolute terms. Gold producers maintain robust balance sheets with 10 out of 27 companies holding net cash; the average ND/EBITDA among our globally covered stocks stands at 0.3x. This gives optionality to better manage sector cyclicality and seize reinvestment opportunities as they arise, without exposing shareholders to disproportionate risks. Companies have shown prudence and discipline so far, in our view. Additionally, cost improvements and overall price deflation over the last 12-18 months reduced all-in cash costs (AISC) whereby gold prices would need to fall by ~35%, on average, before companies burn cash.

 

This rally is (somewhat) different from historical precedents. We identify 6 rallies in gold equities with >60% performance over the last 40+ years including the current one, but excluding the super cycle. The current rally stands out. It has occurred over a relatively short time frame, with gold equities up 111% in just 8 months, compared to 20 months in one previous instance with a comparable level of performance, and 18-24 months for 2 rallies with over 200% absolute performance.

 

Relative picks: We favour AngloGold, Centamin, Goldcorp, and Zhaojin among our global coverage. Fresnillo and Randgold Resources are least preferred.



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(UBS) Repsol financial position stabilising on company initiatives and better oi

Repsol financial position stabilising on company initiatives and better oil prices
Repsol rarely presents a straight-forward investment case. Since Argentina re-nationalised YPF in 2012,
a combination of large scale transactions and wildly fluctuating macro has presented a complex suite
of moving parts. 1H16 has been no different but with signs of success in delivering the post-Talisman
strategy and oil price recovery seemingly underway, we have taken the opportunity to revisit.
Raising earnings estimates in aftermath of 2Q16 and forecasts re-work
We are raising our 2016 and 2017 EPS estimates by an average of 4.9%. This is largely driven by
higher Downstream resulting from our re-working of Chemicals. The continued robustness of the
Downstream is critical in supporting the integrity of the earnings and cashflows of the business and
has been a standout feature. Our forecasts confirm the free cashflow generation capability of the
Downstream.
Not completely out of the woods yet
Management correctly identifies that credit investment grade is an important input into the equity
investment case. Retaining it is dependent upon an improving oil price and also continued delivery of
the plan. The limited room for manoeuvre clearly creates risk. Strategically, while the tight rein on
capex has had an impressive impact on free casflow resilience, it risks creating some stagnation in
evolving the underlying high-grading element of the post-Talisman investment case as does the weak
Upstream M&A market. Finally, the details of the financial performance continue to be quite difficult to
fully interpret absent a full year of consolidated financials and some significant post-deal and full year
accounting adjustments – especially given the volatile environment.
Valuation: Price target raised to €12.25 from €11.5
Target price is set at 5.5x 2017E EV/DACF in line with European major peers. This is below Repsol's
historic relative rating but reflects the changed nature of the business mix. With the sector carrying
relatively high intrinsic risk around the macro anyway, the additional concerns around gearing and the
settling in of the post-Talisman financial performance don't argue for Repsol being obviously cheap, in
relative terms. As a result we remain Neutral rated on the shares.