Some interesting bits and bobs today.

• Let’s talk inflation: If you’re interested in the ongoing inflation debate, it’s worth checking out Doceo’s inaugural ‘Manager View’ webinar, Bruce Stout of Murray International Trusttalking about the outlook for inflation, interest rates, and supply chain disruptions. Video HERE
• Uranium: First off interesting to see (thanks Ocean wall) that Greenland’s parliament has passed a bill which will ban both uranium mining and exploration which included the production of minerals that have uranium as a by-product with a concentration of higher than 100ppm. The current government in Greenland is promoting itself as an environmentally responsible territory and has left open the option to also ban other radioactive materials. In effect this will prohibit the development of the Kvanefjeld rare earths project owned by ASX listed Greenland Minerals, which is considered to be one of the world’s largest rare earths deposits, but also the main target of the new bill.
• Biotech is still decent relative value: From Mick Gilligan at Killik and Co. “The Nasdaq Junior Biotech Index trades at Price-To-Book of 5.0x, broadly in line with the broader S&P 500’s 4.8x (Chart 1) despite superior long term growth prospects. This is close to the lowest absolute and relative valuation of this subsector during the short history since Bloomberg started tracking the data in mid-2020. The broader Nasdaq Biotechnology Index is currently trading at a 5-year low, relative to the S&P 500, on the same measure (Chart 2). Now is probably not a bad time to increase biotech exposure and the strongest long-term growth is likely to be in the smaller stocks.
• Update on Riverstone: After turning very negative on this energy private equity firm for ages I think things are looking up. Here’s a note from yesterday from analysts at JPMorgan. “We joined a Riverstone manager call yesterday and were impressed by the commitment and enthusiasm of the co-founders of Riverstone – David Leuschen and Pierre Lapeyre – towards the company and its role as a vehicle going forward in supporting the energy transition. Of particular interest was the upcoming conversion next month of Enviva from a US MLP structure to a C Corp which will see RSE’s currently unquoted holding replaced by 635,000 common shares in the listed C Corp. These have a market value of around $42m vs their 30/9/21 mark of $31m, and we now adopt that value in our model. Enviva, a Biomass pure play, is a very interesting company, on our view, representing around 6% of NAV, and is covered by our US colleagues who are Overweight (their most recent note is available here). We also update our numbers for further substantial buybacks since we last updated our model a few days ago with £9m spent since then acquiring 1.8m shares. This leaves around £5m of buyback capacity, and given the clear value in the NAV it is not surprising that RSE has been in a hurry to buy as much stock as it can at the current level. The combined impact of marking Enviva to market and the additional buybacks is to increase our live NAVe by 3.1% from $12.13ps to $12.50ps (933pps). Holding all else equal, the remaining buyback power would enhance the NAV by a further 2%. Our NAV of 933pps implies a headline discount of 47% at the current price of 492pps (@10:55). This implies a discount on the unlisted holding of 92%, which represents excellent value, in our view, given the dual benefits of the energy transition portfolio and a strong environment in which to monetise the remaining legacy O&G investments – the legacy quoteds are 22% of NAV and legacy unquoteds are 30% of NAV while 22% is in new unlisteds and 12% new listeds (primarily through the Riverstone-sponsored SPACs where RSE’s exposure to the sponsor warrants and economics has been very lucrative). We are Overweight and hold the shares in our model portfolio”.
• New fintech ETF launched : Rize has this week launched a brand new fintech ETF which focuses on “companies that are leading the structural transition toward online and digital payments, digital wallets and digital currencies…PMNT is purpose-built in collaboration with Euromonitor, a strategy research firm based in London, United Kingdom, and leverages their unique insights and proprietary classification system of companies that are leaders and innovators in the digital payments economy.” The table below shows other fintech ETFs on the market – more details HERE