This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.
WGO likely to drive strong returns, as current low market expectations do not recognize
age-wave, and company strategy factors, strong management alignment, and growing management confidence that are likely to justify upside
Zoetis Inc. (ZTS:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 26.8x Uniform P/E, implying bullish expectations for the firm. However, management appears concerned about their position in the animal pharmaceutical market, sales growth across key segments, and the potential of Abaxis
A RECESSION IS COMING … in 1.5-2 years if trends do not change before then
The yield curve has flattened dramatically in the past quarter. CDS and bond yields are trending negatively. China and Europe appear to have growth issues, and the Fed may be too hawkish. Cash levels relative to debt maturities are at levels not seen since 2007 and companies will have debt maturity headwalls in 2021 that could be a concern. A recession is coming! Run for the hills!
Highlighted Top Ideas
AVP – Avon Products, Inc.
DISH – DISH Network Corporation
OC – Owens Corning
Other Recent Analyses
AGN – Allergan plc
AER – AerCap Holdings N.V.
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: DENTSPLY SIRONA, Inc.
Other Highlights: K, LH, PAYX Other Recent Analyses: 5108:JPN, ADM, APD, AVB, BIIB, BLL, FDX, GWW, MCO, MTD, MU, NOC, NTES, TSLA, WBA
Square, Inc. (SQ:USA) is currently trading at historical highs relative to UAFRS-based (Uniform) Earnings, with a 76.5x Uniform P/E. At these levels, the market has bullish expectations for the firm, and management is confident in the quality and variety of their product line, their ability to gain clients from free trials, and their search for a replacement CFO
The TJX Companies, Inc. (TJX:USA)) currently trades at the higher end of historical averages relative to UAFRS-based (Uniform) Earnings, with a 21.9x Uniform P/E. At these levels, the market has stable expectations for the firm, and management is confident about same-store sales and traffic growth opportunities, and their ability to mitigate freight-driven cost pressures through lease renegotiation
NetEase, Inc. (NTES:USA) currently trades below averages relative to UAFRS-based (Uniform) Assets with a 5.5x Uniform P/B, implying bearish expectations for the firm. However, management is confident about new product innovation and global market dynamics
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 Shutterfly, Inc. (SFLY), RealPage, Inc. (RP), The J.M. Smucker Company (SJM)
DENTSPLY SIRONA Inc. (XRAY:USA) is currently trading below recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.2x Uniform P/E. At these levels, the market is expecting Uniform ROA to decline from 26% in 2017 to 16% through 2022, accompanied by 3% Uniform Asset growth going forward, but management is confident about margin improvement initiatives and driving growth
This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.
COF is set to cash in with accelerating fundamentals, strong management alignment, and a robust business strategy just as markets are overly pessimistic on the company
Highlighted Top Ideas
MDR – McDermott International, Inc.
TWTR – Twitter, Inc.
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: eBay Inc.
Other Highlights: HSY, NXPI, TGT Other Recent Analyses: BMRN, ETN, ICE, IFF, MAR, OMC, PETR4:BRA, SBAC
Kellogg Company (K:USA) is currently trading near recent lows relative to UAFRS-based (Uniform) Earnings, with a 20.0x Uniform P/E. However, even at these levels, the market has bullish expectations for the firm, while management appears concerned about emerging market operations, declining operating profit, and the sustainability of broad-based growth
Paychex, Inc. (PAYX:USA) currently trades near recent averages relative toUAFRS-based (Uniform) Earnings, with a 21.3x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management appears concerned about growth, their value proposition, and client retention
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 Twitter, Inc. (TWTR), Astronics Corporation (ATRO), Marriott International, Inc. (MAR)
NXP Semiconductors N.V. (NXPI:USA) currently trades well below corporates averages relative to UAFRS-based (Uniform) Earnings, with an 11.2x Uniform P/E, implying bearish expectations for the firm. However, management is confident about revenues, utilization, and their debt ratios
This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.
Tapestry has been changing their colors operationally, with opportunity for significant return and growth recovery, but the market has not recognized this, and the company appears undervalued
Highlighted Top Ideas
AMKR – Amkor Technology, Inc.
GM – General Motors Company
TMUS – T-Mobile US, Inc.
Other Recent Analyses
EXPE – Expedia Group, Inc.
GT – The Goodyear Tire & Rubber Company
eBay Inc. (EBAY:USA) is currently trading well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 10.2x Uniform P/E, implying bearish expectations for the firm. However, management is confident in their ability to drive earnings growth, marketing strategies, and German platforms
