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Made a buyer's list today. The stock is enjoying a run. Its software and design software has been in a slump, but is starting to improve and looks good looking forward. People will look to this if they move away from stocks that are just AI. This is a name to own if there's a soft landing and not a severe recession. They've been investing a lot in AI which will improve their products. She's confident.

To protect his downside, he bought 450 puts with a Nov.15 expiration. If the market rolls over, he'll be protected. It's unheard of to recover from the recent volatility so cleanly upward. It's likely there will be some sort of backward move.

GEO is a small-cap name ($125M market cap), but its long-term trend from 2020 has been positive, and recent momentum has been picking up. Its earnings track record has been mixed, and sales growth is fairly muted. It is profitable, but with very thin margins, and its free cash flow has turned negative. It trades at a good valuation and has a decent balance sheet, and its earnings have seemed to hit a bottom, with forward earnings growth moving higher. An improved backdrop of the price of gold and strong demand for its services have helped boost the stock. Recent results were good, and if the price of gold continues to move higher, we could see GEO continue to increase.
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CCO operates as a uranium provider for the generation of electricity that is in the process of integrating a large acquisition. CCO operates in a cyclical industry, and has limited capital returns, and the recent acquisition also pushed the leverage level to a high level. We are okay with taking the loss in CCO to move funds to HPS.A, as we think HPS.A could have more potential to achieve solid growth going forward while still trading at a fair valuation. 
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There was some positive news on the 16th, after a US court ruled in favor of its Monsanto business in a lawsuit alleging that BAYRY's Roundup weedkiller products increase the risk of cancer. These claims were dismissed and the stock jumped over 10% that day. Recent quarterly results were positive and it beat on earnings and affirmed full-year guidance. It continues to be very cheap at 5.5x forward earnings but growth is not expected to be high while debt is also very high. We continue to not be overly excited here. 
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Company Highlight:  A&W Revenue Royalties Income Fund (AW.UN)

AW.UN generates revenue through licensing their trademark to A&W restaurants within their royalty pool. AW.UN is entitled to 3% royalties on the gross sales reported by the 1,047 A&W restaurants in the Royalty Pool through a partnership with A&W Food Services of Canada. AW.UN’s stock has recently jumped over 20% on news that AW.UN and A&W Food Services were merging together in a strategic combination to form a single publicly traded entity. 

AW.UN’s stock has recently jumped over 20% on news that AW.UN and A&W Food Services were merging together in a strategic combination to form a single publicly traded entity. There are a number of moving parts in the transaction, and we will explore the terms of the agreement here. 

Overview:

Under the proposed merger, a new company with a more simplified structure will be created that will be operate similarly to other publicly traded quick-service restaurants (QSRs). These new shares referred to as A&W Food Services NewCo will be a more growth focused QSR, while quarterly dividends are expected to be paid at the same annualized rate as the current monthly distribution for AW.UN at $1.92. The transaction provides numerous benefits to the company and shareholder including: exposure to the performance of the entirety of the business, increased potential for share price appreciation, better liquidity, and greater financial flexibility. The transaction is expected to be closed in October 2024.

Terms of the Transaction: 

AW.UN unitholders are being offered two options as a result of the transaction:

1. Become a shareholder in the NewCo and have units of AW.UN exchanged on a 1:1 basis, OR
2. Receive $37.00 in cash for each AW.UN unit currently held (this was a 30% premium on at the time of announcement)

While this seems like a simple offer, there is a caveat related to option two. The option is subject to proration, where if the total cash elected by all unitholders is less than or exceeds $175.6 million, the cash distribution is prorated so that only ~32.5% of the outstanding units are purchased for cash at $37.00 per unit.

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