Adams Natural Resources Fund Inc V.PEO

Primary Symbol: PEO

Adams Natural Resources Fund, Inc. (the Fund) is a non-diversified investment company. The Fund is an internally managed closed-end fund specializing in energy and other natural resources stocks. The Fund's investment objectives are preservation of capital, the attainment of reasonable income from investments, and an opportunity for capital appreciation. The Fund invests at least 80% of its assets in petroleum or natural resources industries or industries connected with, serving and/or supplying the petroleum or natural resources industries. The Fund has broad flexibility to invest in stocks of varying capitalizations, and primarily invests in stocks found in the S&P 500 Energy and S&P 500 Materials sectors. The Fund invests at least 25% of its assets in petroleum and petroleum-related industries. The Fund may invest up to 25% of its assets in commodities related to petroleum, minerals and related products, including swaps. The Fund may invest up to 10% of its assets in real property.

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Adams Natural Resources Fund Inc > CIBC

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Post by retiredcfon Dec 10, 2019 9:05am

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Post# 30438922

CIBC

December 09, 2019

PEOPLE CORPORATION

Benefitting From Industry Trends page1image536311488

We see People as well positioned to benefit from solid industry tailwinds and a strong pipeline of M&A. We expect organic growth to remain at the upper end of management’s target range and see upside as FY2018 acquisitions are fully integrated onto People’s platform and new products are sold into the expanded customer base. We retain our Outperformer rating and $12 price target.

Key Points

M&A Pipeline Remains Robust: The M&A pipeline remains robust, with acquisitions completed post quarter-end of a similar value to the FY2019 M&A spend. While the M&A market has become more competitive, the company continues to find acquisitions where it expects post-synergy multiples in the 6x-9x EBITDA range. While recent acquisitions have focused on consulting and service providers, People remains open to continuing its roll-up activity in the Third Party Administrator (TPA) market. These TPA acquisitions can take longer to close, but bring additional scale and capabilities to People’s portfolio. Post the November 29 acquisition of Apri, we estimate current leverage at 2.86x, with management noting comfort at the 3x level.

Acquisitions Bring Scale: People is seeing the benefits of scale from recent acquisitions, with EBITDA growth of 28% Y/Y versus revenue growth of 19%. The company integrates acquired companies, allowing them to benefit from shared services and a national distribution structure. Increasingly, People is also looking to cross-sell additional services, with a number of new initiatives recently launched including a disability management and administration solution and People Care, an online mental health solution.

The TPA Business Is Helping Organic Growth: The growth in popularity of
the TPA model has been a boost to People’s organic revenue. Management
noted that increased awareness of the solutions and a better understanding
of the value they provide has made the selling process much easier. The
company is looking to better leverage its consulting business (1,000 10 professionals) as a starting point to cross-sell TPA solutions into its customer
base and is also looking at opportunities to bring the various acquired TPA platforms together, driving cost efficiencies and building capabilities.