Stocks hit as Trump and Biden go toe to toe… (CTD)
WHAT MATTERED TODAY
Well, well, well, the market certainly didn’t like the sound of todays debate as Trump decided to bring his chaotic and confrontational style directly to the stage in what many are reporting as one of the low points in US Presidential debate history. Insults, interruptions, personal attacks, unrelenting cracks on Bidens family and policies, Biden calling Trump a “clown,” a “racist” and “the worst president America’s ever had.” I actually didn’t get to see much of it - others did around the office – with the consensus being that Biden took the gong, although it was a bit of a crash.
US Futures certainly played that tune with early gains of +0.3% giving way to a -1% decline by the time our market closed. The ASX initially opened on the back foot and despite an attempt at rallying mid-morning, it was all one way traffic from midday onwards, with sellers really feeling kicking up into the close. A poor way to end the month & quarter with the ASX down -4.04% and -1.39% respectively
Asian markets were a mixed bag today, Japan down 1.5% however Hong Kong & China were mostly higher while US Futures were down 1% by our close.
By the close, the ASX 200 was off by -136pts / 2.29%. Dow Futures are trading down -263pts/-0.96%
ASX 200 Chart
ASX 200 Chart
CATHCING MY EYE
Month & Quarter Returns: A poor way to end the month & quarter…
Month – September
Quarter – Q1 FY21
Corporate Travel (CTD) +9.74%: came out of halt today after successfully raising $262m under an institutional entitlement offer and launching a fully underwritten retail offer for an additional $113m all priced at $13.85/share. The funds are being put towards the acquisition of US based Travel & Transport, a similar business which had TTV of $US2.8b in 2019. The deal has been cut at $US200.4m which prices T&T on 7x EV to CY19 EBITDA which compares to CTD’s multiple of c. 11.3x. The discount becomes even more dramatic when taking into account the $25m EBITDA synergies that are expected to come out of the combined business, being ~30% EPS accretive post synergies.
It’s an aggressive call from Corporate Travel, going on the offensive when the travel market looks its worst. Clearly the market took the plan well with the raise not an issue – CTD raised an additional ~$100m more than required for the acquisition just to have some balance sheet flexibility with operations currently running at a loss given the down turn in travel. While CTM already operate a North American business, T&T have a greater footprint on the east coast while CTM tend to operate more west coast of the US. Pretty handy result for CTD today following a decent raise.
Corporate Travel (CTD) Chart
BROKER MOVES
- Pilbara Minerals Raised to Buy at Canaccord
- Downer EDI Raised to Buy at UBS; PT A$5
- Corporate Travel Raised to Outperform at Macquarie; PT A$16.40
- Atlas Arteria Raised to Outperform at Macquarie; PT A$6.99
OUR CALLS
No changes today
Major Movers Today
Have a great night
James / Harry & the Market Matters Team
Disclosure
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