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Fundamentals

Size Analysis: The preceding quarter witnessed a notable decrease in terms of transacted US dollars, particularly when compared to the exceptional figures seen in 1Q2023. However, this decrease is counterbalanced by an upward trajectory in the number of transactions, a trend that has been evident for the past two years. It's noteworthy that despite fluctuations in transaction volume, the overall public market capitalization continues to exhibit growth. While the decreased number of reporting companies in the last quarter may be attributed to potential reporting delays, the resilience of the total market capitalization underscores an increased average market cap per company.

Public Market Dynamics: The Year-Over-Year returns have surpassed the SPY index for three consecutive quarters, until 2Q2023. Thereby reversing the trend observed in 2021. A financial analysis reveals a compelling landscape: the gross profit margin has experienced a gradual decline, as well as the operating expenses, while the net income per revenue has exhibited an increase.

Transaction Trends: While the current quarter has seen activity in IPO announcements, with three distinct instances identified. A significant portion of the transaction volume in the past quarter can be attributed to Private Placements and Public Offerings.

Dispersion Insights: The revenue composition skews towards international companies, which contribute a majority of the industry's earnings. Nonetheless, a dispersion is observed in terms of the number of tickers, contrasting between internationally focused entities and those centered in North America. Further analysis of transaction patterns reveals that while Mergers and Acquisitions predominantly involve international players, North American operations-centric companies exhibit a higher frequency of engagement in Private Placements and Public Offerings.

Methodology

We screened CapitalIQ using its industry classification. Transactions were filtered by announced date within the last 3 years. Companies were filtered by having a public company type. The main industry selected was "Industrials". CapitalIQ subsectors "Aerospace and Defense", "Air Freight and Logistics", and "Passenger Airlines" were used to screen the database. CapitalIQ sectors "Capital Goods" and "Transportation" were used as categories. Our Capital Goods' sectors were defined by keywords from the CapitalIQ market intelligent industry classification. Our Transportation's sectors were defined by their sub-sectors.

THIS REPORT IS NOT TO BE USED OR CONSIDERED UNDER ANY CIRCUMSTANCE BY ANYONE AS INVESTMENT ADVICE

This research report is for informational and discussion purposes only. Information presented here is not investment advice of any kind to any person and does not constitute a recommendation as to the purchase or sale of any interests or as to any other course of action. General, financial, and statistical information concerning the details of this report and related industry are from sources Spaulding Financial believes to be reliable.

Spaulding Financial has accurately reflected such information in this research report; however, Spaulding Financial makes no representation as to the sources’ accuracy or completeness and has accepted this information without further verification. Neither all nor any part of the content of this report may be conveyed to the public through advertising, public relations, news, sales, mail, direct transmittal, or other media without the prior written consent of Spaulding Financial. Spaulding Financial ’s research is as of the date reported herein.

Spaulding Financial has no affiliation with any of the companies comprising the industry used as a basis for research in this report, nor does Spaulding Financial hold any investments in the companies listed herein. The content of this report may be used, in part, as a basis for any work that Spaulding Financial performs for you in the future at the sole discretion of Spaulding Financial. All data is from Capital IQ database.

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