Materials

Report by ERA Research

Refreshed management team has taken bold action to enter North America (via Verso acquisition) and to exit underperforming assets - a leader in several niche markets, this packaging company has limited exposure to skyrocketing European energy prices, while its export options are enhanced with its low energy cost-base as well as the weaker euro. Q2 results were very strong, with sales growth across segments and a consolidated EBITDA margin of 20%. The outlook for Q3 is for price / mix to entirely offset input cost inflation. TP 190 SEK (45% upside).

Technology

Report by BWS Financial

Hamed Khorsand’s new “Top Pick” XPER is certainly worth a closer look given his previous choice (Verso) multi-bagged since upgrading the stock in Oct 2020. XPER offers multiple ways to grow revenue in the coming years, from AutoStage and AutoSense to hybrid bonding and content streaming intellectual property. Currently trading at ~10% FCF yield, XPER has been dedicating 50% of its FCF to debt reduction and the other 50% to returning cash to shareholders. As net debt continues to fall Hamed expects the stock to garner more investor attention this year.

Materials

Report by BWS Financial

Stealing Paper - Hamed Khorsand argues that the recent takeover bid of $20 a share from current shareholder Atlas Holdings materially undervalues VRS and the current state of the business. VRS has yet to report quarterly results showcasing the benefits of a series of price increases announced earlier this year. While the coated paper industry is cyclical, the current market conditions provide ample room for VRS to generate in aggregate ~$190m in FCF (or $6.42 per share) in 2021 and 2022. TP $30 (58% upside).