Weekly Research
Names in the News: KER FP and Naver Corp (035420 KS) (report)
This week, we cover two large cap names, KER FP and Naver Corp (035420 KS). KER FP’s stock moved initially higher on Monday before pulling back, after the luxury fashion group announced the appointment of Renault boss Luca de Meo as CEO. 035420 KS, an ‘Expensive but Worth It’ name, saw its biggest daily jump in share price since 2013 after the South Korean President Lee Jae Myung appointed Naver’s Ha Jung-woo as his AI secretary as part of the country’s plan to ramp up investments in AI.
The Bitter Aftertaste of High Cocoa Prices (report)
Chocolate producers continue to face persistent headwinds and pressured EVA Fundamentals as extreme heat and droughts, combined with viral crop infections, lead to falling cocoa yields and elevated prices for the commodity. Risks are exacerbated in the value chain for the commodity being exposed to sustainability issues such as child labor claims and deforestation concerns.
Theme: Startup or Gamble and Growth Within the Russell 1000 (report)
In many of our reports, we use our HEAT Map to help visualize the trade-offs between Quality and Value. This week we look at our EVA Themes which also look at Quality and Value, but for the Themes, instead of using overall Quality (Risk-Adjusted Profitability), we distinguish between low-Risk and high-Risk firms using our Volatility factor (R1), which captures the variability of stock price and profitability (EVA Margin). This report includes two screens for the best-performing themes: Startup or Gamble and Growth.
Expensive but Worth It DM Stocks (report)
In this report we screen for companies with a 5% plus EVA Margin (profitability) that also currently have positive EVA Momentum (growth). The firms look relatively expensive but can justify the high level of premium due to the high level of Economic Profitability. The firms live in the upper left part of the PRVit Heat Map, having high levels of Risk-Adjusted Profitability while trading with a high level of EVA Valuation, what we call ‘Expensive but Worth It.’
Industry Snapshot: Global Trading Companies & Distributors (report)
Incremental EVA growth has seen a steady recovery since our last snapshot, with EVA Momentum (growth) turning less negative, led by an expansion in EBITDAR Margin and a recovery in top-line growth. EVA Margin has remained pressured since peaking out in Q4 2021. However, the market has continued to award a higher premium on the aggregate EVA Capital base, with MVA Spread near record highs, as the industry sustains economic profitability at historically strong levels.
Quant Reports
Barbell Markets – What Works During and After (report)
Over the last six months, the Staples sector and the Industrials sector have generated an average return of about 1% per month using an equal-weighted average of developed market companies in the EVA coverage universe. For this report, we pulled historical data for these sectors and the overall market to see what factors generate the most alpha when we see this combination of cyclical and defensive sectors working simultaneously – the barbell.
Chart of the Week: EVA Themes
Our themes help investors understand where a company is in its life cycle based on some of our key factors: Profitability
Level (P1), Volatility Risk (R1), Wealth Ratios (V1), and Wealth Multiples (V2). We use the Profitability Level and Valuation factors to create quadrants (A, B, C, and D in the figure above) and then we use the Volatility Risk score to distinguish between the Risk-y names in the quadrant and the more stable names in the quadrant. We provide a backtest of each theme for the Russell 1000 as well as two screens reflecting the Startup or Gamble and Growth themes which are the best-performing themes over the last 1- and 3-year periods for the index.
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Originally Posted on June 18, 2025
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