26Jun 2024 by Cattolica Investment Club No Comments
Evergrande: when bricks crack

Evergrande: when bricks crack

Markets
Evergrande is a Chinese real estate company. It has become well known around the world for the huge level of debt (more than 260 billion dollars). Such a high debt could lead to a global financial crisis. This enormous debt comes from a dangerous scheme that Evergrande used to take advantage of the exponentially growing real estate market in China.Basically, in that context Evergrande had to issue bonds in order to keep up with the real estate boom but, clearly, this caused a massive increase in the debt levels as it’s shown in the following graph. In 2020 the real estate bubble burst and by 2021 Evergrande was in default. Every attempt to save Evergrande was unsuccessful and on the 29th of January 2024, a Hong Kong Court ordered the…
Read More
19Jun 2024 by Cattolica Investment Club No Comments
Primary Exit Routes Adopted by Private Equity Firms

Primary Exit Routes Adopted by Private Equity Firms

Corporate Finance
INTRODUCTION Private equity investments are characterized by illiquid assets. To realize their returns, Limited Partners (LPs) and General Partners (GPs) must employ an exit strategy. This article provides a detailed analysis of the primary exit routes adopted by private equity firms.  “To make more on their investments Venture capitalist 1 need to turn illiquid stakes in private companies into realized return” Gompers and Lerner 2001 A defining feature of PE finance is the investment horizon. Limited Partners (LPs) typically commit their capital to a PE fund for a period of 10 years, with potential extensions of 1 to 3 years. This predetermined time frame forces PE firms to focus on realizing investments within the set period. This ensures that LPs receive their invested capital and a return on their investment.…
Read More
13Jun 2024 by Cattolica Investment Club No Comments
Stock analysis of Eli Lilly (LLY)

Stock analysis of Eli Lilly (LLY)

Portfolio Management
Eli Lilly and Company (NYSE: LLY) was founded almost 150 years ago in 1876 by Colonel Eli Lilly and it is one of the leaders in the healthcare industry. The company has its HQ in Indianapolis, Indiana, has more than 44,000 employees and its products are marketed in approximately 105 countries, as can be seen in their website. They have a growing portfolio of medicines in key areas, which are:  Alzheimer's Pain; Cancer; Immunology; Diabetes;  Obesity. These last two categories are the main reason why the stock is rallying lately, thanks to its new obesity and diabetes drugs Mounjaro and Zepbound. Another factor that is pushing the stock price up, is their new Alzheimer’s drug, which is in late-stage trials.  In 2024, the company had an impressive performance of +45.82%…
Read More
05Jun 2024 by Cattolica Investment Club No Comments
TESLA’S DECREASE IN SALES

TESLA’S DECREASE IN SALES

Corporate Finance
Introduction Tesla, Inc., founded in 2003 and headquartered in Austin, Texas, has been a pioneering force in the electric vehicle (EV) industry. Known for its innovative and high-performance electric cars, Tesla’s main product lineup includes the Model S, Model 3, Model X, Model Y, Cybertruck, and Tesla Semi. In addition to vehicles, Tesla also offers energy generation and storage products such as solar panels, Powerwall, Powerpack, and Megapack. Tesla is listed on the NASDAQ under the ticker TSLA and has a market capitalization of approximately $554.1 billion as of 2024.In the first quarter of 2024, Tesla reported revenue of $21.3 billion (9% year-over-year decline) and a net income of $1.1 billion. The company’s gross profit was $3.7 billion, and it held $26.9 billion in cash. Over the trailing twelve months…
Read More
05Jun 2024 by Cattolica Investment Club No Comments
Moody’s Corp. Stock Analysis.

Moody’s Corp. Stock Analysis.

Portfolio Management
Moody’s Corporation, founded in 1909, has its headquarters in New York City. Moody’s Corporation operates as an integrated risk assessment firm globally, they provide market credit ratings, research, tools, and analysis. Moody’s Ratings (previously known as Moody’s Investor Service) is the part of the company that deals with credit ratings. Its ratings and research in this field cover debt instruments and securities issued by various entities, including corporations, financial institutions, government, and government-related entities. They measure the credit risk of obligors and issuers. This part of the business generates revenue through various channels: Rating Fees: Issuers of debt instruments pay fees to Moody’s to rate their debt. The price of these fees depends on the instrument’s complexity. Annual Fees: Moody’s generally charges companies annually to keep their credit ratings up…
Read More
31May 2024 by Cattolica Investment Club No Comments
The Rising Significance of Copper

The Rising Significance of Copper

Portfolio Management
The value of Copper, often referred to as "Dr. Copper" for its role as an economic indicator, is experiencing a significant rally in its market value. Prices have surpassed $10,000 per ton for the first time since April 2022, reaching around $10,220 per ton, driven by soaring global demand and tight supplies, rising 29% from year to date. Copper's critical role in the global transition to net-zero emissions by 2050 underscores its increasing importance. As the world accelerates efforts to combat climate change, copper will be central for the development of different green-initiatives and must overcome the different hurdles in its way in order to solidify its status as the most vital metal in the energy transition. Copper's role is expanding beyond traditional sectors like construction and electronics to new,…
Read More
28May 2024 by Cattolica Investment Club No Comments
European companies started to cut their targets for renewable energy.

European companies started to cut their targets for renewable energy.

Portfolio Management
Many of the most important power companies have started to either change or review their targets to develop renewable energy because of high costs in development and low costs of electricity. This comes as a sign of the general difficulties that present in transitioning away from fossil fuels. The continent’s largest renewable energy producer, Starkraft, announced the review of their annual targets for new renewables capacity, while EDP, an important Portuguese energy company started cutting back its plans quoting high interest rates and low power prices. On the other hand also Denmark’s Ørsted, recognized as the world’s largest offshore wind developer, downgraded its targets for renewable energy for 2030 by more than 10GW, a measure enough to potentially supply millions of homes. The downgrade of this particular target came as…
Read More
27May 2024 by Cattolica Investment Club No Comments
IBM’s Strategic Acquisition of HashiCorp Inc.: Boosting Hybrid Cloud Automation

IBM’s Strategic Acquisition of HashiCorp Inc.: Boosting Hybrid Cloud Automation

Corporate Finance
Introduction International Business Machines (NYSE: IBM) is set to acquire HashiCorp Inc. (NASDAQ: HCP), as the definitive agreement was made public on April 24th, 2024. IBM´s all-cash offer of $35 per share is valuing HashiCorp Inc, a key player in the multi-cloud software infrastructure industry, for $6,4 billion. The announcement underscores IBM's strategic focus and commitment to expanding its hybrid cloud services and AI capabilities. Industry description The software infrastructure industry consists of the foundational elements and technologies that enable the development, operation, and management of software applications and systems. This includes software frameworks, middleware, databases, networking components, and cloud infrastructure. The industry's key focus is on providing scalable, reliable, and efficient solutions to support the growing demand for digital services and applications across various. As organizations increasingly rely on…
Read More
27May 2024 by Cattolica Investment Club No Comments
IPO (Initial Public Offering)

IPO (Initial Public Offering)

Markets
In the life of a company, just as it occurs in a person’s life, there are significant instances that mark a deep shift from the previous life. One amongst them is the IPO, which is an acronym that stands for Initial Public Offerings. An IPO is a procedure through which a private company offers its shares among the public (the so-called creation of the free float) for the first time on a regulated market. Upon making this shift, a company transitions from being privately held by a select group of owners and investors to being publicly owned. A company is regarded as private when its shares are held by a relatively limited number of shareholders. These shareholders often include initial investors such as the company’s founders, their family and friends,…
Read More
23May 2024 by Cattolica Investment Club No Comments
WHO WAS JIM SIMONS?

WHO WAS JIM SIMONS?

Markets
James Harris Simons, the famed mathematician and hedge fund manager, has died at the age of 86, according to a statement from his family foundation. He was widely known among investors for leveraging quantitative analysis and mathematics to create complex algorithms, taking advantage of the market inefficiencies. Jim Simons was born in Massachusetts in 1938 and he has liked mathematics from a very young age. He graduated from the MIT with an undergraduate degree in mathematics and earned a doctorate in the same subject at the age of 23. He soon began working in the academic world where he contributed to the development of knowledge in string theory, quantum field theory and condensed matter physics in the 1970s. Thanks to his talent, in 1964, he started working for the National…
Read More