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EbixCash IPO progress, Shell 3Q19 schedule and more +3

09:08 04-Sep-19


Ebix is starting local with its EbixCash IPO, by announcing engagement letters with 3 Indian investment banks.  Up to 2 more are expected to be added, including at least one international banker.  As a reminder, completion of this process in 2Q20 should significantly reduce the company's debt load, which is the primary excuse for its extremely low valuation.  EBIX shares have not traded meaningfully so far in the pre-market, but I expect them to rally on the news and build momentum as confidence in the IPO builds.  Selection of a household name as the international banker would aid that dynamic.  In the meantime, my price target remains at $50 with longer term aspirations of at least $65.

In a sign of the shifting priority of international markets, Shell is delaying its LNG project in Lake Charles, LA.  This is potentially good news for Golar, and certainly validation of its earlier work in acquiring BG Group.  The 5-year project would now be a 50/50 partnership with Energy Transfer and get a FID by the end of next year.  Shell has also scheduled its third quarter report to be given overnight on November 1st.  The average of estimates comes to $1.23 of EPS from $74.3b in revenue, declining sequentially to $74.1b.  For my part, I note that natural gas held up well even as oil tumbled over the past few days.  It now stands at $2.38, up from $2.13 just a month ago.

CenturyLink is also focusing on international build out by expanding its EMEA Channel Partner Program.  To my mind, this shows that Storey & Co. are managing the business well, but this is overshadowed by their compensation conflict of interest with shareholders.

Finally, UDC has inked another host agreement, this time with LG Chem, which is a much more substantial customer than the prior Chinese one.  However, the Chinese must be laughing aloud behind close doors about the continuing trade issues between Korea and Japan.  As usual, UDC is being completely opaque about the terms of this agreement, so we will just have to wait and see if it has any measurable impact on upcoming reports.