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Global stocks Shares

Netflix Looks to Advertising to Spark Top-Line Growth

Business Strategy & Outlook

Netflix is a pioneer in subscription video on demand and is now the largest online video provider in the U.S. and the world. The economic moat rating of narrow is based on intangibles resulting from the use of data stemming from the firm’s massive worldwide subscriber base. From its origin in the U.S., Netflix expanded rapidly into markets abroad as the service now has more subscribers outside of the U.S. than inside. The firm has used its scale to construct a massive data set that tracks every customer interaction. It then leverages this customer data to better purchase content as well as finance and produce original material such as “Stranger Things.” However, the firm has recently ramped up its production using more traditional methods. Many consumers use, and will continue to use, SVODs like Netflix as a complementary service, especially as SVOD prices increase and pay television bundle prices decrease (due to the shift to over-the-top, or OTT, delivery). With a number of new services from media firms launched over the last five years, many consumers now pay for or have access to multiple services. 

One potential issue for these platforms is the potential for consumers to move between the services with minimal friction. This usage pattern and increased competition will constrain Netflix’s ability to raise prices without inducing greater churn. Netflix will trial an ad-supported tier in fourth-quarter 2022 into 2023 as the firm looks to capture potential subscribers that were unwilling to pay the ad-free price. While the potential audience could be large, particularly in emerging markets, management will need to ensure that the lower-priced tier doesn’t cannibalize the full-price subscriber base in more saturated markets like the U.S. Netflix will expand further into local-language programming to augment its offering in many countries. This will generate a competitive response from the firm’s global and local rivals, which will augment their own first-party content budgets. In turn, Netflix’s international expansion will continue to hamper margin expansion.   

Financial Strengths

Netflix’s financial health is poor due to its weak free cash flow generation, large number of content investments that require outside funding (primarily debt), and content obligations. Debt has been taken on to fund additional content investments and international expansion. The company’s weak free cash flow due to this spending is a concern, as one doesn’t see the need to spend decreasing in the near future. The net cash burn was over $2 billion in 2017, over $3 billion in 2018, and $3.5 billion in 2019. While the firm generated positive free cash in 2020 due to pandemic-related production shutdown, Netflix returned to a slight cash burn in 2021. As of June 2022, Netflix has $14.2 billion in senior unsecured notes that do not have borrowing restrictions, but a relatively small amount due in the near term ($700 million due 2022, $400 million due 2024, and $800 million due 2025), as the firm generally issues debt with a 10-year maturity. Netflix also has a material quantity of noncurrent content liabilities ($3.0 billion recognized on the balance sheet and $15.6 billion not yet reflected on the balance sheet).

Bulls Say

  • Netflix’s internal recommendation software and large subscriber base give the company an edge when deciding which content to acquire in future years.
  • Netflix has built a substantial content library that will benefit the firm over the long term.
  •  International expansion offers attractive markets for adding subscribers.

Company Description

Netflix’s primary business is a streaming video on demand service now available in almost every country worldwide except China. Netflix delivers original and third-party digital video content to PCs, internet connected TVs, and consumer electronic devices, including tablets, video game consoles, Apple TV, Roku, and Chromecast. In 2011, Netflix introduced DVD-only plans and separated the combined streaming and DVD plans, making it necessary for subscribers who want both to have separate plans.

(Source: Morningstar)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.

Categories
Property

Energy Focus Favours Large Office Landlords, Charter Hall, Dexus, GPT, and Mirvac Best Placed

Business Strategy & Outlook

Tenants prefer energy-efficient offices, and this favours large office REITs that own modern buildings. The best-placed office names are Charter Hall, Charter Hall Long WALE REIT, Dexus, GPT and Mirvac—they screen as significantly undervalued, and their office portfolios are among the most energy-efficient in Australia. The “Urban Developer—New Workplace” conference on Sept. 29 endorsed the importance of environmental credentials. Jones Lang LaSalle Australia observed that Melbourne vacancy is in the midteens for prime offices, but is only about 7% for buildings with high (5-6 star) NABERS Energy ratings. Tenants moving offices are said to be increasing their energy ratings by an average of 0.4 stars—some are increasing by as much as 3 stars, to get into 5.5- and 6-star buildings. Among the office REITs, at the top of the NABERS Energy ratings is GPT (average of 5.8 stars), followed by Mirvac (5.3), Charter Hall Long WALE REIT (5.3), Growthpoint (5.2), Charter Hall (5.1), Cromwell (5.1), Dexus (5.0), Stockland (5.0), and Abacus (4.7). NABERS Water ratings are also good, starting with Mirvac (5.3), Growthpoint (5.1), Charter Hall Long WALE REIT (5.1), Charter Hall (4.8), Dexus (4.7), Stockland (4.7), Abacus (4.5), and Cromwell (3.9). GPT didn’t disclose an average for its portfolio, but the group’s individual buildings have very high ratings, many above 5.0 and nearly all above 4.5. The increasing focus on energy efficiency supports and it makes no change to office forecasts or valuations at this time. The fair value estimates for office names are: Mirvac (AUD 3.10), Growthpoint (AUD 3.95), Charter Hall Long WALE REIT (AUD 5.10), Charter Hall Group (AUD 15.85), Dexus (AUD 10.80), Stockland (AUD 4.30), Abacus (AUD 3.30), and Cromwell (AUD 0.95). It ascribe no moats to any of these office stocks, apart from Dexus and Charter Hall, who earn narrow moats partly due to their funds management businesses.

Financial Strengths

The Abacus balance sheet is in reasonable shape, after a circa AUD 400 million equity raise in December 2020 bolstered the group’s cash reserves. It has a low cost of debt, averaging 2% in fiscal 2022. Look-through gearing as at June 30, 2022 was 29%. Gearing was 34% as measured according to its bank covenants (net bank debt divided by total assets minus cash). Abacus’ banking covenants specify a gearing limit of 50%, implying assets could fall in value by about a third before a covenant breach (noting that the gearing calculation specified in the covenants is higher than Abacus’ own definition). The fiscal 2022 interest cover of 5 times against a covenant limit of 2 times. That’s also a large buffer, and one wouldn’t expect that to be breached even if income declined due to upcoming lease expiries. However, it is gearing to rise back toward the group’s maximum targeted gearing of 35%, given the frantic pace of storage acquisitions and development, and potential development projects in its office portfolio. One can view that as high as one can estimate storage will account for about half of group assets, a sector that has minimal leases and weaker tenants than typical in a commercial property portfolio. Abacus has no debt expiring until fiscal 2024, when AUD 66 million expires, so one doesn’t see imminent threats. However, given the group’s high debt/EBITDA ratio of more than 6 times, refinancing could be a risk if interest rates rose substantially, or economic conditions deteriorated.

Bulls Say

  • Storage demand should recover as economic activity improves, driving up occupancy and revenue per available square metre. 
  • While many of Abacus’ assets are in secondary locations, this means they have greater potential upside if urban infill pushes sites to a higher and better use.
  • Abacus has substantial expiries looming in its office portfolio. However, it may choose to redevelop the assets, adding value, and leasing the renewed buildings amid an economy that has recovered from coronavirus.

Company Description

Abacus Property Group is a diversified property group, with interests ranging from storage, office, retail, property lending, and residential development. However, Abacus is striving for a simpler and more conservative business, primarily as an owner of self-storage and office assets. It remains an active acquirer and developer of self-storage assets. Abacus is a stapled security comprising a share in each of Abacus Group Holdings and Abacus Group Projects and a unit in each of Abacus Trust and Abacus Income Trust, which can only be traded together.

(Source: Morningstar)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.

Categories
Dividend Stocks

Franklin has used acquisitions to alter its product portfolio to the point where equities now account for just 32% of AUM

Business Strategy & Outlook

While the combination of rising interest rates and an equity market selloff has negatively affected Franklin Resources’ assets under management, it is cautiously optimistic about the firm over the near to medium term. Franklin came into fiscal 2022 (ending September) with $1.530 trillion in AUM, which rose to a record $1.578 trillion at the end of December 2021, but market losses of more than $150 billion and outflows of more than $35 billion since the start of calendar 2022 left the company with $1.388 trillion in managed assets at the end of August. So far, market losses have had a bigger impact on AUM than fund flows, with Franklin reporting a 9.2% (13.8%) market loss for its managed assets during its fiscal third quarter (last two fiscal quarters). The firm’s investment performance has hewed close to benchmark returns for both its equity and fixed-income operations the past couple of quarters, with the better diversification of its product portfolio since the Legg Mason acquisition (as well as the addition of several alternative asset managers to the platform the past couple of years) helping the company to hold on to more assets than its equity-heavy peers.

There’s been big proponents of consolidation among the U.S.-based asset managers, expecting firms to pursue scale within existing product sets, as well as pursue nonaffected investment products like alternative assets, as a means of offsetting the impact of fee and margin compression being driven by the growth of low-cost passively managed products. During the past several years, Franklin has used acquisitions to alter its product portfolio to the point where equities now account for just 32% of AUM, while 38% is invested in fixed-income products, 10% in multi-asset/balanced funds, 16% in alternative assets, and 4% in money market funds. Although this shift in Franklin’s product mix to keep margins from deteriorating in the face of industry wide fee compression and rising costs (necessary to improve investment performance and enhance product distribution), near-term organic growth will struggle to stay positive in the face of current market headwinds.

Financial Strengths

Franklin entered fiscal 2022 with $3.2 billion in debt on a principal basis (including debt issued/acquired as part of the Legg Mason deal): $300 million of 2.8% notes due September 2022, $250 million of 3.95% notes due July 2024, $400 million of 2.85% notes due March 2025, $450 million of 4.75% notes due March 2026, $850 million of 1.6% notes due October 2030, $550 million of 5.625% notes due January 2044, and $350 million of 2.95% notes due August 2051. The firm also has a $500 million revolving credit facility that remains untapped. At the end of June 2022, Franklin had $5.8 billion in cash and investments on its books. More than half of these types of assets have traditionally been held overseas, with as much as one third of that half used to meet regulatory capital requirements, seed capital for new funds, or supply funding for acquisitions. Assuming Franklin closes out the year in line with the expectations, and rolls over its debt due September 2022, it will enter fiscal 2023 with a debt/total capital ratio of 22%, interest coverage of close to 20 times, and a debt/EBITDA ratio (by the calculations) of 1.5 times. Franklin has generally returned excess capital to shareholders as share repurchases and dividends. During the past 10 fiscal years, the firm repurchased $7.4 billion of common stock and paid out $7.1 billion as dividends (including special dividends). While Franklin’s current payout ratio is slightly lower than the firm’s 40% average payout (when excluding special dividends) the past five years, it is expected that only mid-single-digit annual increases in the dividend going forward. Franklin spent $208 million, $219 million, and $755 million buying back 7.3 million, 9.0 million, and 24.6 million shares, respectively, during fiscal 2021, 2020, and 2019. With the company potentially paying down debt over the next several years, share repurchases will likely be limited in the near term.

Bulls Say

  • Franklin Resources is one of the 20 largest U.S.-based asset managers, with more than two thirds of its AUM sourced from domestic clients. It is also the fifth-largest global manager of cross-border funds.
  • The purchase of Legg Mason has lifted Franklin’s AUM closer to $1.5 trillion, hoisting it into the second-largest tier of U.S.-based asset managers, which includes firms like Pimco, Capital Group, and J.P. Morgan Asset Management.
  • Franklin maintains thousands of active financial advisor relationships worldwide and has close to 1,000 institutional client relationships.

Company Description

Franklin Resources provides investment services for individual and institutional investors. At the end of July 2022, Franklin had $1.430 trillion in managed assets, composed primarily of equity (32%), fixed-income (38%), multi-asset/balanced (10%) funds, alternatives (16%) and money market funds (4%). Distribution tends to be weighted more toward retail investors (49% of AUM) investors, as opposed to institutional (49%) and high-net-worth (2%) clients. Franklin is also one of the more global firms of the U.S.-based asset managers been covered, with more than 35% of its AUM invested in global/international strategies and 25% of managed assets sourced from clients domiciled outside the United States.

 (Source: Morningstar)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice. The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.

Categories
Dividend Stocks

Xcel took an early lead in renewable energy development primarily due to the favorable wind conditions in its central U.S. service territories

Business Strategy & Outlook

Xcel Energy’s regulated gas and electric utilities serve customers across eight states and own infrastructure that ranges from nuclear plants to wind farms, making the company a barometer for the entire utilities sector. That barometer is signaling a clean energy future ahead. Xcel took an early lead in renewable energy development primarily due to the favorable wind conditions in its central U.S. service territories. The company now plans to invest $26 billion in 2022-26, much of it going to renewable energy projects and electric grid infrastructure to support clean energy. That could make investment climb above $30 billion in 2027-31 based on state and federal clean energy policies.

Transmission projects to support renewable energy represents about one third of Xcel’s investment plan, but that could go higher based on recent studies that show transmission is a constraint to meeting clean energy targets. Politicians and regulators in Colorado, Minnesota, and New Mexico are pushing aggressive environmental targets, which could extend Xcel’s growth potential. One example is the 460-megawatt Sherco solar project that Minnesota regulators approved in September on the site of a soon-to-close coal plant. Xcel aims to eliminate coal generation by 2034 and deliver 100% carbon-free electricity by 2050. Xcel’s investment plan gives investors a transparent runway of 6% to 7% annual earnings and dividend growth potential. However, realizing this growth requires political, regulatory, and customer support for clean energy investments, particularly in Xcel’s largest jurisdictions, Colorado and Minnesota, where it plans to invest $20 billion in 2022-26. Xcel’s substantial growth investment plan results in more regulatory risk than its peers. Xcel has made substantial progress in recent years bringing earned returns closer to allowed returns through constructive regulatory negotiations across its system. Lower energy costs have helped keep customer bills mostly flat despite higher infrastructure charges. Regulatory support for Xcel’s growth investments could wane with rising energy prices.

Financial Strengths

Xcel Energy has a strong financial profile. Its biggest financial challenge is raising enough capital at reasonable prices to fund its $26 billion investment plan during the next five years with minimal equity dilution. Most of Xcel’s planned investments benefit from favorable rate regulation, but regulatory lag could weigh on cash flow. Xcel’s strong balance sheet has helped it raise capital at attractive rates. The company is to maintain EBITDA/interest coverage near 5 times as long as regulators grant timely rate increases. Xcel’s consolidated debt/ capital leverage ratio could creep toward 60% during its heavy spending in 2023-25, but there are normal levels around 55%, which includes $1.7 billion of long-term parent debt. Parent debt boosts shareholder returns on equity about 100 basis points, offsetting some of the regulatory lag. Xcel has $3.9 billion of refinancing needs in 2022-26 and it will need more than $7 billion of new debt. Xcel has been issuing large amounts of new debt since 2019 at coupon rates around 100 basis points above U.S. Treasury yields. Xcel took care of its equity needs for at least the next two years with a forward sale in late 2020 to raise $720.9 million at $61 per share. This followed a $459 million forward sale initiated in late 2018 at $49 per share. These were good moves with the stock trading above the fair value estimate when the deals priced. The board has accelerated its dividend increases the past few years. The $0.11 per share annualized raises for 2021 and 2022 bring the dividend to $1.94. This is still at the low end of management’s 60%-70% payout target for 2022, so annualized increases will have to start climbing near 7% to keep up with earnings growth and management’s payout target.

Bulls Say

  • Xcel has raised its dividend every year since 2003, including a 6% increase for 2022 to $1.94 per share & similar dividend growth going forward is expected.
  • Renewable energy portfolio standards in Minnesota and Colorado are a key source of support for wind and solar projects.
  • The geography of Xcel’s service territories gives it among the best wind and solar resources in the U.S. and a foundation for growth.

Company Description

Xcel Energy manages utilities serving 3.7 million electric customers and 2.1 million natural gas customers in eight states. Its utilities are Northern States Power, which serves customers in Minnesota, North Dakota, South Dakota, Wisconsin, and Michigan; Public Service Company of Colorado; and Southwestern Public Service Company, which serves customers in Texas and New Mexico. It is one of the largest renewable energy providers in the U.S. with nearly half of its electricity sales coming from carbon-free energy.

 (Source: Morningstar)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice. The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.