Diversified Energy has acquired several upstream assets and associated infrastructure in East Texas from a private seller announced the company on Tuesday.

The news of Diversified Energy’s acquisition has helped increase its share price by 1.4% to 115p on Tuesday.

The acquisition builds on Diversified’s plans to enter the Central Region in 2021 and accelerates its efforts to replicate the company’s successful business model of high-margin, low-decline production close to its current assets.

Under the previously announced Strategic Participation Agreement, Oaktree Capital Management’s funds will invest a non-operated working interest in the purchase, and Oaktree will promote Diversified with a 5% stake in the acquisition.

Diversified will receive a 52.5% working interest in the transaction in exchange for providing 50% of the purchase price, or $50m, before typical purchase price modifications.

Diversified Energy Acquisition Trade-offs

Diversified Energy’s revolving credit line and cash on hand were used to cover the $50m cash consideration.

Based on the net Purchase Price and $35m in expected Adjusted EBITDA for the following twelve months before any synergies, which means this represents a 1.4x multiple and around 10% are accretive to the company’s Hedged Adjusted EBITDA in 2021.

With net Proved Developed Producing reserves of 18 MMBoe and PV10 of $102m as of the effective date and based on 19 April 2022 NYMEX strip prices, the Net Purchase Price approximates a >PV40 valuation at the effective date of 1 April 2022.

With an anticipated engineered NTM PDP decline rate of 7%, current output (100% natural gas) is 3.7 MBoepd from 691 gross (346 net) operational PDP wells.

High cash margins of around 60% reflect favourably realised hedged pricing and a cost structure that is competitive for Diversified Energy.

Diversified Energy’s Portfolio

Diversified’s Central Region footprint gains scale, which opens up more synergy potential.

This is Diversified’s fifth acquisition in the Central Region in the last twelve months, demonstrating the company’s competence in locating high-quality, reasonably-priced opportunities that fit its asset profile.

Geographic closeness to previously acquired assets from Tanos Energy Holdings III and Indigo Minerals in East Texas and Northwest Louisiana improves asset density within the operating zone and raises the opportunity for developing operating efficiencies.

The company’s Smarter Asset Management initiative will be implemented to improve well performance, minimise labour and vendor costs, return wells to production, optimise artificial lift systems, and reduce overheads.

Diversified has the option to retain experienced staff from the seller during a usual transition service term to compliment the seller’s continuity and consistency of operations and to enable the execution of Smarter Asset Management prospects.

In conjunction with the transaction, Stifel served as Diversified’s exclusive financial advisor.

“With a compelling purchase multiple of 1.4 times net cash flow, this acquisition represents another accretive, fully cash and debt-financed acquisition that further demonstrates our status as a capable consolidator of low-decline producing assets within the Central Region,” said Rusty Hutson Jr., Chief Executive Officer, Diversified Energy.

“Our enlarged regional footprint complements our portfolio of high-quality assets and provides additional scale from which we can derive operational synergies as we optimise asset performance and the associated costs.”

“We are pleased to once again partner with Oaktree to acquire assets with material upside potential available through Smarter Asset Management.”

“Having emerged as a significant operator in the Central Region with a proven track record of execution in Appalachia and a strong balance sheet, we are well positioned to capitalise on additional opportunities.”

Schroders said on Tuesday that its Board of Directors is announcing proposals for the enfranchisement of non-voting Ordinary Shares by simplifying its dual share structure.

The move by Schroder and its Board will provide all shareholders with the same voting rights because they share the same economic gains and dangers and it will also boost the shares’ liquidity.

Each Non-voting Share will be transformed into one Ordinary Share as part of the enfranchisement, and all re-designated shares will have the same rights as existing Ordinary Shares, including full voting rights.

Holders of Ordinary Shares will receive a bonus issue of three additional Ordinary Shares for every 17 Ordinary Shares held on a record date to be determined as compensation for the diminution of their voting rights under the proposed parameters of the enfranchisement.

The Board thinks that these terms are reasonable for both classes of shareholders and reflect the longer-term discount between the Non-voting and Ordinary Shares.

The proposals will be voted on separately by shareholders of both classes of shares. Further details of the plans, including resolutions on the enfranchisement, will be published in advance of a General Meeting, which will be conducted in due course, and will require 75% of votes cast by each class of shareholders to pass.

The Schroder family’s interests make up about 47.93% of the Ordinary Shares and 20.44% of the Non-voting Shares held by the Principal Shareholder Group (PSG).

Members of the PSG have stated that they intend to vote in favour of the proposals.

Holders of over 40% of the Non-voting Shares have indicated their willingness to support the proposals, along with other non-voting shareholders who have been contacted.

Following the enfranchisement, the PSG will own about 43.11% of the Ordinary Shares.

Michael Dobson, Chairman of Schroders, commented, “The Board believes it is right to enfranchise the Non-voting Shares and that these proposals are in the best interests of all shareholders.”

“In undertaking this important step for Schroders, we are pleased to have an indication from shareholders representing over 47% of the Ordinary Shares and over 40% of the Non-voting Shares that they intend to support the proposals.”

Schroders shares have rose marginally by 0.07% to 2,968p in early morning trade on Tuesday.

Mind Gym announced a trading update for its financial year ended 31 March 2022 on Monday where it said its core business has returned to pre-Covid levels, resulting in a strong performance in line with the board’s expectations.

The group also announced that the adjusted pretax profit for the year meets the board’s expectations.

For Mind Gym, FY22 has been a year of steady success and major investment. With the launch of its new digital coaching platform on January 22 and a solid pipeline of new POVs – ‘Leadership’ and ‘Wellbeing’ due in the coming months, the group is exiting the Covid crisis with a reinforced pitch to its clients in some important areas.

Despite Covid’s prolonged headwind, with Omicron creating significant delays in client decision-making and course enrollment in the second half and early in the new financial year, both the UK and the US delivered good growth compared to FY21.

The global provider of human capital and business improvement solutions, Mind Gym reported that revenue is estimated to be £47.9m, up 25% in constant currency from FY21 and 5% higher than pre-Covid levels.

The group’s digitally enabled revenues of £36.8m were up 25% from FY21 and 156% from FY20, when the majority of deliveries were still done in person and accounted for 77% of revenue in FY21 and 32% in FY20.

Mind Gym’s digital 1:1 coaching SaaS platform, Performa, was introduced in January 2022 and has sold over £500,000 in annualised revenue so far.

The product is based on Mind Gym’s exclusive Precision coaching methodology and gives clients a leadership development solution that can be coupled with other Mind Gym products.

Mind Gym bought the diagnostic IP of 10X Psychology in administration in March 2022 for £0.1 million in cash, boosting Mind Gym’s burgeoning digital strategy.

The acquisition of 10X’s diagnostic IP was the culmination of 7 years of development and around £10m in previous investment by 10X, which is expected to help Mind Gym’s digital strategy of providing highly personalised therapies to participants and insightful data and analysis to customers.

Following considerable investment in its new digital goods throughout the financial year, net cash was £10m at the end of March 2022, compared to £16.8m in 2021.

To facilitate further growth investment, a new undrawn debt facility has been established for Mind Gym. The group signed into a £10m debt facility with £6m RCF and £4m accordion throughout the year, which was undrawn as of March 31, 2022.

Octavius Black, CEO of Mind Gym, said, “We are encouraged with Mind Gym’s performance despite the Covid headwinds, with good revenue growth ahead of last year and pre-pandemic levels.”

“We are excited by the recent launch of Performa our digital 1:1 coaching SaaS service and delighted with the positive reception it has already received from new and existing clients.”

“We have a clear strategy for accelerating revenue growth based on market-leading IP, delighting clients and a significant digital transformation.”

Investors can use all the data they can get their hands on. Analyzing a company is a tough task, and to find an edge, you must search for hidden indicators that can offer context to financial data. In this regard, alternative datasets are making a mark on investor portfolios and helping them deploy capital in better ways.

On the surface, alternative data might seem like a viable option only for institutional investors. However, when combined with other elements of rich investor intelligence reports, even casual investors can uncover insights into companies that investors from bigger financial funds are less interested in.

Here are a few key ways to use alternative datasets to power your opportunity analysis process.

Investigate New Trends

Catching a company at the start of a new trend is a great way to realize massive portfolio growth. However, spotting trends is tough. Many trends seemingly burst onto the scene with little warning, leaving little time for small investors to capitalize on them.

However, with access to the right data signals, it’s possible to identify trends before it’s too late. Zoom is often cited as an example of a product that took the market by storm (and surprise) following the onset of the COVID-19 pandemic. However, web traffic data indicated that Zoom was consistently outperforming its competition even before the pandemic.

While the pandemic pushed Zoom’s growth to unprecedented heights, the ingredients for an exponential rise were already present. Alternative data intelligence can alert you to budding trends that web consumers are looking at. For instance, are they searching for a cluster of keywords and products that only a few companies offer? Conversely, are they highlighting increasing issues with a company’s product that can make it a potential short in your portfolio?

Most investors look at financial data to discover such opportunities. However, those datasets are often extremely outdated. What’s more, quarterly earnings are not independently audited and are thus less reliable. What’s more, earnings represent only one aspect of a company’s business success and often don’t correlate to changes in stock value.

In contrast, alternative data offers you a real-time view of a company’s health.

Discover Hidden Performance Indicators

Technological progress has meant that many small investors are quantitatively-driven. Put simply, quant modeling is more accessible these days. However, feeding these models with the right data is challenging. Feed them conventional data, and you’ll receive average results. If average ROI is what you’re after, you’re better off sticking to plain-vanilla ETFs instead of spending resources developing a model.

Data quality and context are the keys, and alternative datasets can offer you an edge. For instance, what if you could feed GPS data derived from mobile phone signals to decipher footfall to a retailer’s location? You could extend these datasets to analyze consumer demand at all of their locations.

Web scraping can also be a great way for quantitative investors to keep tabs on their portfolio companies and prospects. For instance, is social media sentiment trending against your company? Have users consistently adopted negative tones, and the company’s marketing has failed to address their concerns?

You can feed these seemingly unstructured datasets into your models to uncover hidden insights. Alternative data like this is best used to complement traditional analysis. For instance, if the company’s 10-K mentions increased customer demand for a certain product or service, you can correlate these claims with alternative datasets.

You can also track trends in the statements within the MD&A sections of annual reports using analytics. How well does management understand their business, and are they presenting an accurate picture to investors? Alternative data sheds a lot of light in this regard, and with a creative approach, any investor can leverage it.

Research Market Impact

Traditional financial data offers deep insights into how well a company is managed. However, in modern business landscapes, it tends to lag significantly. By the time you’ve analyzed the data, the company is dealing with a new trend that renders previous conclusions obsolete.

Web traffic data and related alternate sources of digital performance can shed a light on the market impact a company is having. For instance, you can discover the brand impact of a company on its market compared to its competitors.

Answers to questions such as What does traffic engagement on the company’s website look like? and What is the company’s social share of voice? offer important clues as to its investment potential.

Companies these days face threats from any number of sources. Changes in the sector’s economics and the rise of new competitors threaten a company’s profitability. Digital performance data can reveal troublesome trends well before the financial statements catch up. For example, are consumers complaining about excessive prices on social media?

Are terms such as “expensive,” “poor quality,” or “low value for money” dominating conversations surrounding the company’s product? These can be useful indicators that a company is going downhill, and management must take immediate action.

Alternative data thus provides context to management’s decisions in the short term. It also reveals trends that are likely to leave an impact in the long term.

Better Insights

Alternative data is largely unstructured. However, by augmenting traditional datasets with it, you can develop intelligent company analysis models. The more data you have as an investor, the better your analysis will be. After all, you never know where an edge might exist.

Alternative data helps you uncover hidden catalysts that can cause your portfolio returns to increase exponentially.

Global podcast company, Audioboom, announced a 125% rise in its 2021 revenue to $60m due to “continued growth” in the US podcast market on Monday.

Audioboom’s revenue rose by 125% to $60.3m from $26.8m in 2020 out of which 96% of group revenue was generated from the continued growth in the United States and its developing podcast market.

The company’s revenue growth in 2021 outpaced the predicted wider industry average growth by 108% and Audioboom had to increase expectations on its performance for 2021, 7 times.

On average, Audioboom’s global monthly downloads for Q4 rose by 39% to 113m compared to 2020’s Q4 with 81.7m, and global downloads broke a record with 115.7m downloads in October 2021.

The average global revenue per 1,000 downloads in the fourth quarter for Audioboom rose by 49% to $55.85 compared to $37.55 in Q4 2020, and the average brand advertiser count for Q4 was 396, a 32% increase from 301 in Q4 2020.

Audioboom’s revenue streams are bifurcated as direct revenue, marketplace, Audioboom Studios and Sonic Influencer Marketing. The gross margins differed for these segments by yielding 22%, 26%, 36% and 12% respectively.

The group’s adjusted EBITDA for 2021 was profitable and amounted to $3.1m compared to the loss of $1.8m in 2020 as the company recorded positive EBITDA in every month of 2021.

Audioboom’s annual net pre-tax profit was $1.7m compared to the loss of $3.3m in 2020, and total profit amounted to $7m compared to the loss of $3.2m, due to the recognition of a $5.3m of deferred tax asset.

Podcast company, Audioboom’s cash outflow from operating activities reduced by 76% to $800,000 from $3.3m in 2020.

The $4m loan facility with SPV Investments expired at the end of the period, and Audioboom has arranged a £1.5m overdraft with HSBC to deal with any working capital needs. SPV Investments’ $4 million content finance facility is set to expire in June 2022.

Audioboom Developments

Audioboom has continued its development of Audioboom Studios, its production arm, through the commercial success of Dark Air with Terry Carnation, as well as the extension of our production partnership with Formula 1.

The company has enhanced its creator network through new commercial partnerships with leading podcasts, including Redhanded, The Way I Heard It with Mike Rowe, Zane & Heath Unfiltered, Dark History, Hacks on Tap, and Spitballers.

Audioboom also launched its key advertising technology, including inventory creation tool, AdRip, and its global automated advertising marketplace, Showcase.

For the rest of 2022, the company says its “set to be another successful year for Audioboom with continued revenue expansion and growth in profitability.” 

Audioboom has noted record sales in Q1 with a 107% increase in revenue from Q1 2021 amounting to $19.7m and adjusted EBITDA of $900,000.

Stuart Last, CEO of Audioboom, commented, “I am delighted to report on a defining year for the business which saw top-line growth of 125%, our maiden EBITDA and net profit, and the transformation of shareholder value.”

“Our phenomenal performance has positioned us as the world’s leading pure-play podcast business and increased our market-share significantly. Our innovation led to the launch of new best-in-class advertising technology tools, the scaling of our platform and new levels of success for our creator partners and advertisers.”

“Our ambition is to build the world’s leading podcasting business, and I am delighted with the start we have made in 2022 and look forward to the future with confidence. I would like to thank our creators, clients, customers and partners, as well as our incredibly talented Audioboom team and our supportive shareholders as we look forward to another exciting and successful year.”

Audioboom shares have dropped 0.7% to 2,035 despite fantastic results in FY21 on Monday.