ASGN Incorporated (ASGN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.8x Uniform P/E, implying bearish expectations for the firm. However, management is excited about the durability of their profit margin, and confident in their first quarter performance, billable day basis growth, and the strength of their end markets

AvalonBay Communities, Inc. (AVB:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 46.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management has concerns about their Southern Florida and Denver property developments, NAV growth, and retail tenant write-offs

The Sherwin-Williams Company (SHW:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 25.6x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about the strength of the housing and repainting markets, Performance Coatings Group growth, and their project pipeline

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. Vector Group Ltd. (VGR), Fair Isaac Corporation (FICO), Mellanox Technologies, Ltd. (MLNX)

Digital Realty Trust, Inc. (DLR:USA) currently trades at a historical high relative to UAFRS-based (Uniform) Earnings, with a 45.4x UAFRS-based P/E, implying bullish expectations for the firm. However, management has concerns about financing agreements, market conditions, and their international expansion

Summary Headlines – Inside This Month

• Investors may find pause in buying a market approaching all highs, but improving credit signals provides confidence in buying the Bull market. 
• Business credit has been flashing early warning signs for 2020 or 2021, providing a market overhang . Recent signals give reasons to think this overhang has been removed, potentially confirming an all clear sign for the next year and beyond
• Profits and profitability continue to rise to all time highs across US corporations (UAFRS adjusted, accurate calculations)

This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis. FSLR is starting to see light at the end of the Series 6 tunnel, but the market is not yet recognizing management’s execution, spelling material upside potential

Highlighted Top Ideas EXPE – Expedia Group, Inc., MTW – The Manitowoc Company, Inc., X – United States Steel Corporation

Square, Inc. (SQ:USA) is currently trading at historical highs relative to UAFRS-based (Uniform) Earnings, with a 72.3x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management has concerns about their mobile app sales strategy, revenue growth, and the utility of their mobile app and POS hardware

Each week, the Valens Research team highlights our most interesting insights from across our tools and our analysis, including individual company, industry, and macro insights. Top Highlight: General Motors Company DHI, LOW, UTX Other Recent Analyses: AMGN, BDX, BMY, CAH, CAT, CL, EA, EL, FFIV, INTC, MHK, RRC, TEVA, TWTR, XRAY

– CDS 166bps, Base Case iCDS 227bps

– Negative Case iCDS 280bps, 2024 6.500% Bond YTW of 6.299%, iYTW of 4.539%

– Ba2 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens

– Low Refinancing Need

C.H. Robinson Worldwide, Inc. (CHRW:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 15.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about their Global Forwarding segment, revenue and carrier growth, and the impact of tariffs on freight shipments

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. IQVIA Holdings Inc. (IQV), Medidata Solutions, Inc. (MDSO), WSP Global Inc. (WSP:CAN)

F5 Networks, Inc. (FFIV:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 12.7x Uniform P/E, implying bearish expectations for the firm. Moreover, management may be concerned about their service capabilities, NGINX integration, and 5G and API management growth opportunities

– No Traded CDS, Base Case iCDS 330bps

– Negative Case iCDS 795bps, 2026 9.000% Bond YTW of 9.296%, iYTW of 5.216%

– B2 Rating from Moody’s, IG3+ (equivalent to A1) Rating from Valens

– Low Refinancing Need

D.R. Horton, Inc. (DHI:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.3x Uniform P/E. At these levels, markets are pricing in bearish expectations for the firm, which may be unwarranted given management’s confidence in the progress of their projects, their ability to increase market share, and opportunities to monetize land

This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis. Management’s smart strategic decisions, low market expectations, and sustained confidence about the business builds the case for equity upside

– CDS 615bps, Base Case iCDS 270bps

– Negative Case iCDS 729bps, 2025 6.875% Bond YTW of 8.649%, iYTW of 4.659%

– B1 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens

– Moderate Refinancing Need

Highlighted Top Ideas AXL – American Axle & Manufacturing Holdings, Inc., GTT – GTT Communications, Inc. MCK – McKesson Corporation 

General Motors Company (GM:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 13.6x Uniform P/E, implying bearish expectations for the firm. However, management is confident in their Cadillac sales, cost management, and South American business turnarounds