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Welcome to edition 58 of C-Suite Transitions, a weekly series on InsideArbitrage that tracks appointments and departures at publicly traded companies during the prior week. We highlight five appointments and departures each week by picking the largest companies from the full list of management changes.
Sudden Departures
Mobileye (MBLY) $35.48
Key Insights
I have used Tesla’s autopilot features for several years. Instead of allowing this emerging technology to completely take control, I view self driving technology as a copilot that is keeping watch while I am doing the same. It is kind of like defensive driving, where you are keeping an eye out from any erratic behavior from other drivers that could lead to an accident. As discussed in this Twitter thread, I am often worried about “edge cases” like the ladder I encountered on a freeway that the self driving technology might not be trained on or has not encountered before.
This summer, I had a chance to use Ford’s BlueCruise self driving technology in a Mustang Mach-E and liked it a lot. It felt marginally better than Tesla’s autopilot even though I can’t fully explain what I liked better because both systems pretty much did the same thing. BlueCruise in Ford vehicles is powered by Mobileye, a company that had in the past worked on Tesla’s self driving system before the two companies had a falling out. While Tesla has FSD, GM has Cruise and Google has Waymo, most other manufacturers including Ford, Volkswagen, Toyota, Geely, Nio and India’s Mahindra have partnered with Mobileye.
Founded in 1999 by Prof. Amnon Shashua and Ziv Aviram, and headquartered in Israel, Mobileye Global Inc. engages in the advancement and implementation of advanced driver assistance systems (ADAS) as well as technologies and solutions for autonomous driving worldwide.
CFO Transition
Anat Heller joined Mobileye in 2008 and was appointed as CFO in 2018. She has held various roles and witnessed the transformation of the company over the past 15 years. On June 26, 2023, Anat Heller abruptly announced her resignation, citing undisclosed personal reasons. Ms. Heller continues to serve as a strategic advisor to Mobileye’s finance department and to the company’s senior management.
Mobileye appointed Moran Shemesh Rojansky, the Vice President of Finance, as Acting CFO on the same day, and initiated an extensive search for a permanent replacement, considering both internal and external candidates.
On September 11, 2023, Mobileye Global announced that Moran Shemesh Rojansky had been appointed Chief Financial Officer, effective the same day. Ms. Shemesh Rojansky has served in various positions with Mobileye since 2016, previously as Vice President of Finance, Director of Finance, and Corporate Controller.
Ms. Shemesh Rojansky joined Mobileye a year before Intel acquired the company.
Ms. Shemesh Rojansky’s salary is paid in New Israeli Shekels (NIS) and works out to 70,000 per month. She was also granted RSUs totaling $600,000, with a three-year vesting period.
When she assumed the role of CFO, Mobileye committed to maintaining her base pay at NIS 70,000 and is considering granting her additional RSUs worth $900,000, pending approval from Mobileye’s Compensation Committee, also subject to a three-year vesting period. Her annual salary in USD works out to $218,400 (using a conversion of $0.26 USD per NIS).
Mobileye N.V. (MBLY) and Intel (INTC)
In 2017 Intel acquired Mobileye N.V. for $15.3 billion and later in 2021 announced its intent to take Mobileye public through an initial public offering. Mobileye Global raised $861 million in 2022 through an IPO, offering 41 million shares at $21 per share. Intel sold 35 million shares of Class A common stock of Mobileye, equivalent to approximately a $1.5 billion stake, in Mobileye Global on June 12, 2023 through a secondary offering. According to Bloomberg, following this sale, Intel retains an 88% stake in the company.
Insider Purchase
A month later, Intel’s CEO and Mobileye Director Pat Gelsinger purchased 2,650 shares of the company paying $37.88 for a total amount of $100,391.
You can check out all Mobileye insider transactions here.
Mobileye Partnerships
On May 9, 2023, Mobileye announced a strategic collaboration with Porsche, to provide Mobileye’s SuperVision premium advanced driver assistance systems in future Porsche production models. According to Mobileye, SuperVision allows cars to follow navigation routes, autonomously change lanes, and automatically overtake slower vehicles on multilane roads.
On July 31, 2023, Volkswagen Commercial Vehicles began testing a self-driving version of the ID Buzz electric vehicle with Mobileye Drive technology on two continents. In Munich, Germany, and Austin, Texas, Volkswagen will test the Mobileye Drive-equipped ID.
On August 25, 2023, Polestar, an electric vehicle company, and Mobileye announced that they are joining forces to introduce Mobileye Chauffeur, an autonomous technology into the Polestar 4.
On September 4, 2023, Mobileye and technology company Valeo announced a new partnership at the IAA Mobility 2023 festival in Munich, to deliver software-defined imaging radars for next-generation driver assist and automated driving features.
Mobileye had an early partnership with Tesla in 2016 for autonomous technology but later ended it due to safety concerns regarding Tesla’s Autopilot system.
Valuation
Mobileye, currently trading at $35.46, has seen a 25% increase in its stock price since last year. The company has a market capitalization of $28.57 billion and an enterprise value of $27.47 billion. The company has been growing revenue but net income was negative to the tune of $28 million last quarter. The forward EV/EBITDA ratio is 42.01.
Mobileye Second Quarter 2023 Results (Press Release)
Mobileye President and CEO Prof. Amnon Shashua said, “The business again performed well in Q2. Operating margin improved as compared to the first quarter of 2023 despite relatively consistent revenue and we’re positioned well for the increased revenue growth in the 2nd half of 2023 indicated by our guidance,”
Mobileye generated a net cash of $197 million from operating activities in the first half of 2023. As of July 1, 2023, the company has a strong balance sheet, holding $1.1 billion in cash and cash equivalents and maintains a debt-free status.
Conclusion
The Global Advanced Driver Assistance Systems (ADAS) Market, valued at $20.74 billion in 2020, is estimated to reach approximately $48.37 billion by 2028, with a compound annual growth rate (CAGR) of around 11.6% during the period 2021 to 2028, according to a research study by Zion Market Research.
Mobileye is well-positioned to excel in the changing automotive industry, driven by the increasing adoption of ADAS technology and autonomous vehicles. With governments mandating ADAS features and automakers delving into autonomous driving, Mobileye is poised for growth. We have some concerns about the company’s valuation but more importantly further selling pressure from Intel. It is entirely possible that Intel might distribute its stake in Mobileye to its shareholders much like Johnson & Johnson (JNJ) did with Kenvue (KVUE) through a split off transaction last month.
Appointments
1. Illinois Tool Works (ITW): $237.91
On September 6, 2023, Illinois Tool Works Board of Directors elected Christopher A. O’Herlihy as President and Chief Executive Officer effective January 1, 2024.
| MarketCap: $71.82B | Avg. Daily Volume (30 days): 818,958 | Revenue (TTM): $16.08B |
| Net Income Margin (TTM): 19.30% | ROE (TTM): 95.84% | Net Debt: $7.29B |
| P/E: 23.50 | Forward P/E: 22.62 | EV/EBIDTA (TTM): 18.04 |
| P/S (TTM): 4.54 | P/B (TTM): 23.22 | 52 Week Range: $177.28 – $264.19 |
2. Schneider National (SNDR): $27.96
On September 6, 2023, Schneider National, announced that Darrell Campbell has been appointed as Executive Vice President and Chief Financial Officer, effective September 30, 2023.
| MarketCap: $4.87B | Avg. Daily Volume (30 days): 457,830 | Revenue (TTM): $6.01B |
| Net Income Margin (TTM): 6.84% | ROE (TTM): 14.77% | Net Debt: N/A |
| P/E: 11.97 | Forward P/E: 11.98 | EV/EBIDTA (TTM): 5.65 |
| P/S (TTM): 0.82 | P/B (TTM): 1.65 | 52 Week Range: $20 – $31.64 |
3. Paychex (PAYX): $119.30
On September 5, 2023, the Board appointed Robert L. Schrader as Senior Vice President and Chief Financial Officer effective October 13, 2023. Mr. Schrader assumed the role of Vice President, Finance and Investor Relations in January 2023.
| MarketCap: $43.23B | Avg. Daily Volume (30 days): 1,388,523 | Revenue (TTM): $5.01B |
| Net Income Margin (TTM): 31.10% | ROE (TTM): 47.35% | Net Debt: $714M |
| P/E: 27.85 | Forward P/E: 25.58 | EV/EBIDTA (TTM): 19.24 |
| P/S (TTM): 8.67 | P/B (TTM): 12.38 | 52 Week Range: $101.77 – $128.77 |
4. Illumina (ILMN): $150.77
On September 5, 2023, Illumina, announced that the Board of Directors of the company had appointed Jacob Thaysen to serve as Chief Executive Officer on a permanent basis and as a member of the Board, in each case, effective as of September 25, 2023.
| MarketCap: $23.81B | Avg. Daily Volume (30 days): 1,336,295 | Revenue (TTM): $4.46B |
| Net Income Margin (TTM): -93.84% | ROE (TTM): -49.25% | Net Debt: $1.49B |
| P/E: -5.66 | Forward P/E: 60.98 | EV/EBIDTA (TTM): 100.41 |
| P/S (TTM): 5.31 | P/B (TTM): 3.63 | 52 Week Range: $149.46 – $248.87 |
5. Quaker Houghton (KWR): $166.19
On September 5, 2023, Quaker Chemical appointed Shane W. Hostetter as Chief Accounting Officer, in addition to his current position as Executive Vice President, and Chief Financial Officer effective October 2, 2023.
| MarketCap: $3.04B | Avg. Daily Volume (30 days): 67,832 | Revenue (TTM): $1.97B |
| Net Income Margin (TTM): 0.45% | ROE (TTM): 0.67% | Net Debt: $730.53M |
| P/E: 353.28 | Forward P/E: 19.61 | EV/EBIDTA (TTM): 13.42 |
| P/S (TTM): 1.53 | P/B (TTM): 2.27 | 52 Week Range: $127.80 – $215.49 |
1. Payoneer Global (PAYO): $6.11
On September 6, 2023, Payoneer Global announced that Keren Levy is expected to depart as President of the company and General Manager of Merchant Services on September 30, 2023. Ms. Levy will remain employed by a subsidiary of the company for a transition period through June 30, 2024.
| MarketCap: $2.27B | Avg. Daily Volume (30 days): 2,205,014 | Revenue (TTM): $741.22M |
| Net Income Margin (TTM): 2.28% | ROE (TTM): 2.89% | Net Cash: $553.39M |
| P/E: 133.52 | Forward P/E: N/A | EV/EBIDTA (TTM): 39.05 |
| P/S (TTM): 3.62 | P/B (TTM): 2.31 | 52 Week Range: $4.02 – $8.04 |
2. Paychex (PAYX): $119.30
On September 5, 2023, Efrain Rivera, Senior Vice President and Chief Financial Officer of Paychex notified the company of his intention to retire as Chief Financial Officer effective October 12, 2023, following which Mr. Rivera will continue to serve as a senior advisor to the company through December 31, 2023.
| MarketCap: $43.23B | Avg. Daily Volume (30 days): $101.77 – $128.77 | Revenue (TTM): $5.01B |
| Net Income Margin (TTM): 31.10% | ROE (TTM): 47.35% | Net Debt: $714M |
| P/E: 27.85 | Forward P/E: 25.58 | EV/EBIDTA (TTM): 19.24 |
| P/S (TTM): 8.67 | P/B (TTM): 12.38 | 52 Week Range: $101.77 – $128.77 |
3. Illumina (ILMN): $150.77
On September 5, 2023, Illumina, announced Thaysen succeeds Charles Dadswell, who has served as interim Chief Executive Officer in addition to his role as the company’s Senior Vice President and General Counsel since June 11, 2023 during the Company’s search for a permanent Chief Executive Officer.
| MarketCap: $23.81B | Avg. Daily Volume (30 days): 1,336,295 | Revenue (TTM): $4.46B |
| Net Income Margin (TTM): -93.84% | ROE (TTM): -49.25% | Net Debt: $1.49B |
| P/E: -5.66 | Forward P/E: 60.98 | EV/EBIDTA (TTM): 100.41 |
| P/S (TTM): 5.31 | P/B (TTM): 3.63 | 52 Week Range: $149.46 – $248.87 |
4. Trupanion (TRUP): $27.90
On September 2, 2023, Trupanion announced that Wei Li will cease serving as interim Chief Financial Officer and will serve in the role of Senior Vice President of Finance & Corporate Controller effective September 25, 2023.
| MarketCap: $1.13B | Avg. Daily Volume (30 days): 477,196 | Revenue (TTM): $1.01B |
| Net Income Margin (TTM): -6.03% | ROE (TTM): -20.11% | Net Debt: $132.04M |
| P/E: -18.52 | Forward P/E: N/A | EV/EBIDTA (TTM): -26.67 |
| P/S (TTM): 1.12 | P/B (TTM): 1.12 | 52 Week Range: $18.45 – $69.15 |
5. Quaker Houghton (KWR): $166.19
On September 5, 2023, David A. Will resigned from his positions as Vice President and Chief Accounting Officer of Quaker Chemical Company effective October 2, 2023.
| MarketCap: $3.04B | Avg. Daily Volume (30 days): 67,832 | Revenue (TTM): $1.97B |
| Net Income Margin (TTM): 0.45% | ROE (TTM): 0.67% | Net Debt: $730.53M |
| P/E: 353.28 | Forward P/E: 19.61 | EV/EBIDTA (TTM): 13.42 |
| P/S (TTM): 1.53 | P/B (TTM): 2.27 | 52 Week Range: $127.80 – $215.49 |
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