monthly update September
Investment decisions

MORAM – Monthly Update September

Regarding the market situation, it hasn’t been a good month for the main indexes, as they have fallen to important support levels. The last earnings season of the year is just around the corner, and in an environment of high interest rates – with the September energy price hike reviving fears of a second wave of inflation and delaying initial expectations of rate cuts – coupled with weak economic data, the year-end is expected to be quite volatile and portfolio management will be crucial to navigate this environment

Stock Market

During the month of September, the S&P 500 experienced a severe correction (-6.2%), especially starting from the third Friday (day 15), which marked the largest options expiration in September history. Historically, this marks the beginning of the worst seasonal period for the SPX, lasting until mid-October.

During these weeks of unfavorable seasonality, interest rates in the United States have reached levels not seen in nearly 15 years, with the 10-year rate surpassing 4.8% and the 30-year rate reaching 5%. Many investors may be wondering who would risk investing in equities with such attractive and “secure” returns.

However, behind this rise in interest rates, in addition to tensions stemming from Japan and the expected reduction in rate cuts for 2024, there are other significant factors flooding the market with supply. This includes massive bond issuances by the United States and sales by China, reducing its holdings to the lowest level since 2009.

Nevertheless, even though we don’t know what the market will do, we believe there are reasons for a rebound in major indices in the short term. Here are some of them:

  • Short positions are at their highest levels in six months (regional banking crisis) and at levels seen in September-October 2022 (UK bond crisis). After these events, the market rebounded by more than 10%.

  • 93% of S&P 500 stocks are now trading below their 50-day moving average, one of the highest levels in the past 6 years, which has historically coincided with rebounds in the S&P 500.

  • S&P 500 stocks have just reached the highest number of new 52-week lows since October 2022.

  • Seasonality becomes more positive in mid-October, coinciding with the end of massive sales by CTAs. In the last week, the amount of S&P 500 futures contracts sold reached nearly $40 billion, data and speed never before seen.

  • Extremely low levels of US bonds and significant psychological levels for traders, such as the 5% mark for the USD30Y (30-year Treasury yield). CTAs are already warning that they are prepared for trend reversals.


The third (and final) reading of the US second-quarter GDP, published on September 28, showed no change in growth compared to the previous reading (2.1%). The only noteworthy aspect is a significant drop in personal consumption to 0.8% (compared to 1.14% in the previous data).

Considering how PMI data has evolved during the third quarter, along with further declines in revolving credit, larger corrections in savings rates, a complete depletion of excess savings, and the resumption of student loan payments, one should not expect higher personal consumption figures in upcoming GDP data.

Over the past month, the situation in the Eurozone has hardly changed. Perhaps there has been a hint of a possible bottoming out in both manufacturing and services PMI data, although improvements are still a long way off.

An economic situation that is affecting other global markets is that of Japan. The Bank of Japan, which holds an astonishing 47% of all Japanese government debt in circulation, has announced additional bond purchases to reduce yields on 10-year bonds, which have reached their highest levels since 2013. This is because investors are betting on further tightening of monetary policies to combat high inflation.

However, this move is further detrimental to the JPY, which is trading near the 150 level against the USD, a level at which intervention by the Bank of Japan is likely.

This ambiguous situation is causing significant tension in global interest rate markets, especially in the United States, as Japanese investors, despite the significant yield differential between US and Japanese bonds, do not find it attractive to invest due to currency effects.

Natural Gas market

Another negative month for TTF prices, with November futures falling approximately 20% over the last 30 days. Weather forecasts in Europe indicate mild conditions, and European inventories are currently at 98%. Additionally, Norway’s exports to the EU via pipelines decreased by 50% in September due to extended maintenance, which was prolonged due to COVID-19 pandemic delays and the 2022 energy crisis.

The previously commented Chevron strike at its Gorgon and Wheatstone facilities (Australia), which threatened 5.1% of global LNG production, came to an end on September 22nd, after 10 days since it began

It’s also noteworthy that the first LNG ETF – with the ticker LNGG – was launched this September. (Main positions are: Cheniere LNG 17%, Santos LNG 14%, Woodside Energy 13% ,….., Golar LNG 4%, New Fortress Energy 4%, Flex LNG 3%,…)

Companies monthly update

This month, we discuss in detail:

  • Natural Gas companies: Golar LNG, New Fortress Energy, Kistos

  • US dealers: MarineMax, OneWater Marine

  • French Yacht Manufacturers: Catana Group, Beneteau

  • Italian Yacht Manufacturers: The Italian Sea Group, Sanlorenzo, Ferretti

  • European Small Caps: Unidata, Italian Wine Brands, Newlat, Tamburi Investment Partners, Ecoener, Hotel Chocolat

  • US Small Caps: Gogo, Arcos Dorados, Good Times Restaurants


Newlat reported impressive results for the 1H23, with a 52.9% growth in EBITDA to €38.5 MM and a 120 basis point expansion in EBITDA margins. These results align with the core part of our thesis, which anticipated margin recovery once prices were renegotiated or raised with customers and supply chain issues were resolved, in addition to the decrease in energy prices.

Another significant detail we found favourable in the results was the announcement of a new contract with Amazon, making Newlat their sole pasta supplier in Europe. We believe this news could lead to increased volume in their plants and, consequently, higher margins (remember we explained in our analysis that Newlat plants are barely working at 65% capacity).

However, we see a risk (which is also an opportunity) related to potential M&A activities. Of the two options, we prefer the smaller target, but we have some concerns about how the financing will be structured for the larger one. If the stock continues to rise, we may consider reducing our position in the coming days or weeks.

Furthermore, the company took advantage of the increased trading volume on the day of the results and in the following days to buy back shares. This month, the purchases amounted to 103k shares, a significantly higher number than the previous two months (40k and 11k).

Disclaimer: We hold shares of the company.

The Italian Sea Group

While the share price moves in line with major luxury companies, TISG continues to execute as usual and remains traded at prices that anticipate a severe crisis in the sector. The stock’s reaction to the results was a bit disappointing, and we are monitoring the technical as it is close to key levels.

Last weekend, the Monaco Yacht Show took place where the Italian company presented new models and showed up to the visitors six yachts.

The company presented three yachts developed by the internal team:

  1. Project Adventure: A 50 meter Explorer Admiral

  2. Project Evo 155: A 46 meter superyacht based on the previous EVO model that awarded TISG with many sales.

  3. Project Cat 133. A catamaran in the style of “This Is It”.

We would like to highlight the “This Is It” Tecnomar yacht, a catamaran that has been one of the stars of the shows (according to specialized press) thanks to its futuristic and innovative design. The owner is Tasos Papanastasiou (founder of XM) and is soon to be delivered within this year.

It is a great note that after years of no Tecnomar sales, the group reactivates the brand that has been so successful in regions with huge potential like the Middle East. TISG also announced a new partnership with Studio Fuksas and Luca Dini for the design of Sea Flower, the new 80 meter Admiral. On the negative side, it seems that the Picchiotti project seems to not speed up..

Additionally, we have successfully matched all of TISG’s backlog with the type of ship and its length (information not explicitly detailed in TISG’s reports). This will allow us to calculate its quarterly earnings for the next 2 years with a fair degree of accuracy and lay the foundation for updating subsequent ones. We will share this information soon.

Disclaimer: We hold shares in the company

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