Apes, Bananas and Construction (ABCs)

We've spoken to a lot of you in the past 2 weeks in order to revamp our newsletter, and here's what you've told us:

• "Just give us the good stuff from the community, regional updates are too long"
• "Loving the weekly deal summaries and podcasts, keep them coming!"
• "More of a focus on investing: stock, cryptos and other interesting trends"

So we've redesigned accordingly. We'll start with the best highlights of market moves, mostly taken from our community. Then we'll give you a weekly M&A deal, stock pick, crypto pick and alternative investment idea.  

For this weeks investment highlights, we look into construction machinery supplier Caterpillar Inc, cryptocurrency token FTT, and the exclusive Bored Ape Yacht Club NFT.  We look at Newlat Food's acquisition of Symington in our M&A deal of the week and we speak to Nkechi Iregbulem, from the VC firm Anthemis.

🐛 $CAT - Caterpillar Inc

Caterpillar is the largest supplier of construction machinery in the world. Large geographic presence in the US (44%), Asia (25%) and Europe (24%).

Renewable and Autonomous Machinery - CAT has amassed a number of patents for machinery, that is both autonomous and renewable, for the mining industry -  in which they have a large presence, with few notable rivals.

Exposure to Commodity Gains - Due to forward purchases of Steel, and a specific Oil & Gas sectoral exposure, CAT has benefited significantly from the increases in commodity prices when compared to its competitors.

Catalysts - Q4FY21 Earnings and potential acquisitions in the Renewables and Autonomous space

Risks - Reliance on construction in China, the Evergrande saga may hinder sales in the region.

For in-depth analysis, price targets, financial metrics and valuation, see our full report below.

FTT - the token behind our FTX

FTT is a native Ethereum-based utility token of the popular cryptocurrency exchange, FTX. The key to the rise of FTT, therefore, is intrinsically tied to the success of its platform.

Co-founder behind FTX: Sam Bankman-Fried - Sam began his career as a Trader at Jane Street before launching crypto quant trading firm Alameda Research in 2017,  making $20 million per day by exploiting arbitrage opportunities between the US and Japanese bitcoin markets.

FTX is ramping up its marketing efforts - FTX closes a $900 million fundraising round, valuing the company at $18 billion. FTX Area naming rights secured for $135 million and Team Solo Mid (eSports Team) naming rights.

Acquisition of LedgerX - a CFTC regulated designated contract market, swap execution facility and derivatives clearing organisation. The acquisition means it is the only exchange in the US offering both futures and spot crypto trading, a unique feature that could be leveraged as a competitive advantage.

For in-depth analysis, see our full article below.

Bored Ape Yacht Club

In this section, we'll look at trends we've noticed, whether it's fashion, art, technology or NFTs.

This week, we're looking at a unique type of NFT where your token doubles as membership to a club. The company behind the token has recently signed deals with Madonna, U2, and Rolling Stone. The club boasts Yacht parties, Warehouse parties and VIP dinners in New York - with the cheapest listing for one of these tokens at over $1 million, on OpenSea.

Whilst we may not be telling you to splash a million dollars worth of disposable income on one of these, it represents a growing trend of NFTs holding utility value, which in this case is access to a club of parties and events. If there was one (significantly cheaper of course), based in your city and for your age group, would you invest?  Let us know!

💰 Apple vs Big Tech

Apple's decision to change the privacy settings on iOS caused an estimated $9.85 billion wipeout of revenues at Snapchat, Facebook, Twitter, and YouTube. The companies, as mentioned earlier, are dependent on advertising, and the new "App Tracking Transparency" feature is disrupting that business model.

👮‍♂️  Major UK outflows of capital

The FT reports that investors have pulled $9.4 billion out of UK-focused equity funds since the start of this year. In September investors sold down a net £567 million during the month, with Active UK-equity funds suffering the most, accounting for 98% of the overall outflow in September 2021.

💉 Vegan Vax

A Japanese company called Mitsubishi Tanabe Pharma has recently announced plans to produce a plant-based COVID-19 vaccine. They are currently analysing international phase 3 trials carried out through Medicago (their Canadian subsidiary; currently partnering with GlaxoSmithKline), and intend to apply for approval in Canada in the near future.

For more bite-size market updates, visit our community!

Newlat Food Acquires Symington's in a $73 Million Deal

Acquirer: Newlat Food S.p.A. (BIT: NWL)

• Newlat Food is a family-owned Italian company operating in the agri-food sector, both within Italy and internationally
• Newlat owns and runs 12 brands across the food sector, primarily in dairy products such as milk, yoghurt, butter and cheeses from mozzarella to mascarpone
• An extensive distribution network enables Newlat to reach outlets all across Italy through direct consignments and dealers, as well as worldwide through significant partnerships with international distribution chains and operators

Target: Symington's Ltd (Privately-held Company)

• Symington's is a food company with a long history, being founded in 1827 by William Symington on the idea that William Symington could change and influence people's diets through the production of easy to prepare dried foods
• Today, the company primarily focuses on the sale of dried foods, pasta, rice, soups, and other groceries
• Symington's main brands include Mug Shot, Naked (noodles), Ragu, Chicken Tonight, and others

Rationale

• The deal will generate significant synergies between Newlat and Symington's, with cost synergies from the transaction estimated to be worth €10 million by the end of 2022
• Newlat primarily has a Euro-centric focus and have been wanting to expand their business into the UK
• The acquisition of Symington's would allow for vertical and horizontal integration, giving Newlat access to a UK-wide distribution channel, economies of scale, as well as some key brands to grow Newlat's product offering
• Newlat may also be looking to capitalise on the pandemic-driven boom in pasta and bakery purchases by utilising the distribution network of Symington's

This week we are joined by Nkechi Iregbulem, Venture Capital Investor at Anthemis.

This episode covers:

• Breaking into the VC space through cold emails and even receiving mentorship opportunities
• Balancing client interaction skills and financial technical skills  
• Extra-curricular activities that Nkechi took up during her college years to prepare for a career in VC

We'll catch you again next week, until then, make sure you're signed up to our community, and follow us on LinkedIn, Instagram and Twitter! If you have any feedback or want to join our team, send us a message!

-Salman @ Finance Focused