entherm Incorporated (THRM:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 15.9x Uniform P/E. At these levels, markets are pricing in bearish expectations for the firm, but given management’s confidence in their new strategy to divest non-core segments to focus on the real value drivers, long-term equity upside is warranted

Each week, Valens focuses on several companies that were analyzed in the prior week, where material distortions caused by as-reported GAAP accounting need to be corrected to understand a company’s economic fundamentals.

This week, we focus on Zillow Group, Inc. (ZG), VMWare, Inc. (VMW), Pfizer, Inc. (PFE)

Bausch Health Companies Inc. (BHC:USA)currently trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.0x Uniform P/E. At these levels, markets are pricing in bearish expectations for the firm, and while management may lack confidence in their ability to sustain current robust growth rates, long-term equity upside remains warranted should BHC simply maintain current profitability levels

This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.

Pessimistic market outlook for growth and ROA’, with favorable management alignment, strong strategic positioning and accelerating operational execution points to equity upside

Garmin Ltd (GRMN:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.0x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, which is unwarranted given management’s confidence in their segment mix, new products, and opportunities. As such, outperformance is likely justified

The signal and the noise

The title of Nate Silver’s 2012 best selling book about predictive models, The Signal and The Noise, is referencing identifying real signals from statistical data, versus identifying false noise and relationships, and the risk of conflating the two.

First Solar, Inc. (FSLR:USA)currently trades near recent averages relative to UAFRS-based (Uniform) Assets, with a 0.9x UAFRS-based P/B. At these levels, the market has muted expectations for the firm, but management is confident in their differentiated strategy, outlook for operating income and ITC extension

Highlighted Top Ideas

HCA – HCA Healthcare, Inc.
IEP – Icahn Enterprises L.P.
WRK – WestRock Company

Other Recent Analyses

CVS – CVS Health Corporation
RYI – Ryerson Holding Corporation

Cirrus Logic Inc. (CRUS:USA)trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 10.8x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, which may be unwarranted given management’s confidence in their ability to capitalize on increasing demand, overcoming challenges with their second biggest customer, and opportunities in the stereo market. As such, outperformance is likely justified

Each week the Valens Securities team highlights our most interesting insights from across our tools and our analysis, including individual company industry and macro insights

Top Highlight: Lennar Corporation

Other Highlights: HSY, KO, SBAC Other Recent Analyses: ABM, AMZN, BBY, BXP, ECB, GME, HON, INFO, IR, MGM, ROK, UVV, ZG

MasterCard Incorporated (MA:USA)currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 28.9x Uniform P/E, suggesting bullish expectations for the firm. However, management has concerns about merchant’s acceptance of QR code systems, their ability to maintain debit growth in India, and their partnership with N26 in Germany

Each week, Valens focuses on several companies that were analyzed in the prior week, where material distortions caused by as-reported GAAP accounting need to be corrected to understand a company’s economic fundamentals.

This week, we focus on American Public Education, Inc. (APEI), OSI Systems, Inc. (OSIS), CryoLife, Inc. (CRY)

MGM Resorts International (MGM:USA)currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 25.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management has concerns about Strip fundamentals, RevPAR, and demand in Vegas and Mandalay

Lennar Corporation (LEN:USA)currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with an 11.8x Uniform P/E, implying muted expectations for the firm. However, management is confident in their new orders growth, their stated objective to increase their returns, and in their position within the homebuilding industry

This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.

The market is worried about the legacy business, and is not capturing the strong momentum in their execution into a stickier higher value add business

Highlighted Top Ideas

DISH – DISH Network Corporation
JCP – J. C. Penney Company, Inc.
LEE – Lee Enterprises, Incorporated

Other Recent Analyses

UHS – Universal Health Services, Inc.
DOOR – Masonite International Corporation

Zillow Group, Inc. (ZG:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 37.1x Uniform P/E. However, even at these levels, the market is pricing in fairly bearish expectations for the firm. Although negative management sentiment suggests near-term upside may be limited, these overly-bearish expectations are likely to support longer-term outperformance should ZG simply maintain profitability at current levels

Each week the Valens Securities team highlights our most interesting insights from across our tools and our analysis, including individual company industry and macro insights

Top Highlight: Facebook, Inc.

Other Highlights: ABC, KBH, SEDG Other Recent Analyses: ALXN, BWA, CBS, CMCM, CVS, DISH, ESRX, GOOGL, HCA, IEP, K, KR, LEE, LXFT, PBH, POST, SBGI, SQ

Rockwell Automation, Inc. (ROK:USA)is currently trading near recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, while management is confident in their Connected Enterprise initiative and growth in their high-margin heavy industrials segment

The Hershey Company (HSY:USA)currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 20.8 Uniform P/E, implying somewhat bullish expectations for the firm. However, management is concerned about their SKU reduction and tax credit strategies, and about their ability to improve margins by reducing costs