Clearly, H121 has been phenomenal and we are sitting on unlevered 23% net return for the first six months. So naturally, we should throw out a few names where the opportunity now lies behind us and that we no longer consider worth covering - unless you do, that is.
We are rotating out of a number of names that have either fulfilled their investment thesis or have failed to do so or have otherwise traded up significantly post March and therefore hold more beta than alpha now:
Please refer to our analysis of Adient here (Antolin to come) and to previous comments on volume expectations, China volumes and rebound to date by OEM segments.
Please refer to our updated analysis of Adient here.
With $1.6bn at the end of March Adient’s cash on balance sheet position is E300m better than we had expected, which is presumably due drawing the remaining E175m of European RCF and $125m US FILO.
Below is an account of each of the names we follow and have begun work on in the context of Covid19 and Oil prices. Several names stand out as having become either uninvestible or outright attractive - already now.
