Tuesday, June 12, 2018

Brookfield Renewable now owns 30% of TERP

Brookfield Renewable (BEP) increased its total commitment to $420 million and now its interest in TerraForm Power (TERP) is 30%.

With change to tax subsidy rules in US there are fewer players in Solar and Wind Energy development. This will allow TERP to emerge as a major player in US in this attractive market and allow the company to deleverage with cost reductions, organic growth and synergies when merged with Saeta Yield.

Monday, May 14, 2018

GOOGL and FB are Best Large Cap Tech Growth Stocks at Reasonable Value

GOOGL and FB are Best Large Cap Tech Growth Stocks at Reasonable Value as of 1Q2018 end. Excluding Cash both GOOGL at $1050 and FB at $160 trade at 20 times Forward Earnings assuming GOOGL earnings growth of 20%+ and FB earnings growth of 25%+.

Both Alphabet (GOOGL) and Facebook (FB) continue to invest in future growth drivers including Artificial Intelligence, Cloud Services etc.

Brookfield Continues to Execute on 2022 Plan

Brookfield (BAM) Continues to Execute on 2022 Plan as evidenced by 1Q2018 results.

As of 1Q2018 Fee Paying AUM increased to $127B, ENI for LTM increased to $2.1B, Annualized Fee Base and Target Carry increased to $2.5B and Cash Flow for LTM increased to $2.5B with $1B of Fee Related Earnings and $1.5B of Investment Income (from BPY/BIP/BEP/BBU and other Listed and Un-Listed Investments).

Mritik Capital expects Fee Related Earnings to grow 15% to 20% per year through 2022 and Investment Income to 10% per year through 2022 (aided by organic growth and new investments). This would imply Fee Related Earnings close to $2B and Investment Income of $2.5B which would imply $4.5 Cash EPS by 2022 end. We project BAM fair value to increase to $75+ by 2022 end.

Key value drivers over next few years would be GGP deal closing for BPY, Organic Growth and TerraFirm related growth for BEP, Organic Growth, NTS recapitalization and Major New Acquisitions for BIP, GrafTech and North American Palladiun Exits and Westinghouse turnaround for BBU and continuing strength in the Brookfield Homes business.

Berkshire Hathaway 1Q2018 Results Analysis

Berkshire Hathaway (BRK.B) 1Q2018 Results Analysis indicate that the company is moving along slow and steady with existing operating companies continuing to generate cash. With the exception of Insurance Businesses all other operations are doing well and generating earnings growth.

Not withstanding the $12B invested in APPL in the latest quarter BRK.B inability to invest the $112B cash has been a major disappointment and a drag on the growth of the book value and earnings power. Warren Buffets performance as the Chief Capital Allocator over the last 24 months has been a huge disappointment/

Mritik Capital rates BRK.B a HOLD with a price target of $250 for 2018 year end.

Tuesday, April 17, 2018

Lack of Energy Logistics Costs Canada Billions in Lost Revenue

Lack of Energy Logistics Costs Canada Billions in Lost Revenue 

Canada has lost $117B due to pipeline woes, says McKenna

With a Canadian Government that can ensure Energy Logistics and International Market Access for Resources and one that can help diversify Canadian Exports to Asia (India and China) the Canadian Economy and Canadian Dollar would greatly benefit.

Market Focus to Shift to 1Q2018 Business Results from Geo Politics

Market Focus will Shift to 1Q2018 Business Results from Geo Politics as companies start the reporting season for the latest quarter. The earnings growth is expected to be significant due to the reduced US Corporation Tax Rate and continued revenue growth in the Technology Sector.

As earnings increase in 2018 the market multiple which has seemed elevated over last 12 months would likely trend to a more reasonable range.

Netflix Is Now Worth Almost As Much As Disney

Netflix Is Now Worth Almost As Much As Disney.

After reporting impressive first-quarter subscriber growth that drove its stock higher more than 9% on Tuesday, Netflix Inc. (NFLX) is now worth nearly as much as the much older and larger Walt Disney Company (DIS) .

Netflix, which went public in May 2002, ended the day valued at just under $146 billion, compared to Disney's market cap of $153.6 billion. Disney's revenues dwarf those of Netflix's, having made $55.7 billion in the last 12 months compared to just $11.7 billion for Netflix. But Netflix has been growing significantly faster and is consequently valued much more highly by investors. Netflix's forward price-to-earnings ratio is 78, according to Thomson Reuters, versus just 14 times future earnings for Disney. 

Netflix shares have soared 75% this year alone, compared to Disney's 5% decline, and as Netflix nears Disney's market cap, it is gearing up for a head-to-head streaming battle with the Mouse House.