Alaris on the list of top ideas by SC 1Y target $28 Scotia Capital just released the report on Diversified Financials Q3/16 Review & Best Ideas.
From the perspective of absolute returns, the specialty financials sector offers some of
the most attractive opportunities in our universe. Not surprisingly, the valuation overhang
across a number of these names relates largely to unique risks and identifiable
catalysts. Looking at small caps in this sector, our top ideas include ECN (SO) and AD
(SO). In the mid to large cap space, we like EFN (SO) and believe that DH (SP) looks
oversold.
Potential Events to Boost Cash Flow
KMH +$1,250 (+$0.03/sh) Receive $28M for units, reduce debt and interest
expense
SM +5,760 (+0.16/sh) Restart distributions & receive $27M of proceeds
SCR1. +5,410 9+0.15/sh) Every $2M in distributions received is $0.05/sh
Kimco2. +5,080 (+0.14/sh) Every $2M in distributions received is $0.04/sh
New Investments +1,515 (+0.05/sh) Every $20M deployed at 15%
Distribution Resets +1,400 (+0.04/sh Effective Jan 1/17 The majority of the portfolio is in good shape, but we think issues related to Kimco will likely take longer to resolve and we are not expecting to see them pay a material distribution over the next four to five quarters. There did not appear to be any new emerging issues with the portfolio of companies during the quarter, with companies contributing 81% of the quarter’s revenue operating at or above expectations.