In the middle of a retest is the hardest, and best, time to trust the (right) data
Tell me if you’ve heard this before:
“Any time the market falls 6%+ in 2 days, investors justifiably ask whether something has changed that should impact their investment thesis. This is when a consistent framework like the Market Phase Cycle is most valuable.”
Thermo Fisher Scientific Inc. (TMO:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 20.1x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management has concerns about revenue guidance, service line and pharma services growth, and their outlook for FY 2019
Gilead Sciences, Inc. (GILD:USA)trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 9.6x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and while management has concerns about their HIV portfolio, guidance, and pricing in Europe, a strong development pipeline and overall business strength support long-term outperformance and equity upside if GILD is able to maintain current profitability levels
Chesapeake Energy Corporation (CHK:USA)currently trades at historical lows relative to UAFRS-based (Uniform) Assets, with a 0.2x Uniform P/B, implying bearish expectations for the firm. However, management is confident about their WildHorse asset acquisition, their focus on expanding margins, and their transportation portfolio
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 TripAdvisor, Inc. (TRIP), G-III Apparel Group, Ltd. (GIII), LogMeIn, Inc. (LOGM)
This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.
Cirrus appears to be making the right calls with strong management alignment, favorable fundamentals, smart strategic decisions, and growing management optimism, pointing to equity upside
The Chemours Company (CC:USA)currently trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with an 8.8x Uniform P/E, implying bearish expectations for the firm, and management may have concerns about margin expansion of Fluoroproducts, Opteon, and their Mining Solutions facility
Highlighted Top Ideas
CCI – Crown Castle International Corp.
DAL – Delta Air Lines, Inc.
NAV – Navistar International Corporation
Other Recent Analyses
ESV – Ensco plc
R – Ryder System, Inc.
Corporations inherently need some level of cash to operate their
business, without which they would have liquidity issues and
customers and suppliers would be hesitant to build long-term
relationships with them…
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: Garmin, Ltd.
Other Highlights: FB, PANW, SCS Other Recent Analyses: ABM, ABT, AMZN, ASML:NLD, CASY, CTXS, DG:FRA, GIII, IRBT, LMT, NOVN:CHE, PM, SIE:DEU, SLB, SYY, VEC:GBR
Alphabet, Inc (GOOGL:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.7x Uniform P/E, implying fairly bearish expectations for the firm. While management may have concerns about the Pixel, foreign exchange volatility, and Verily, the firm’s leadership position in its space and lack of management concern about competitive or expense pressures suggest longer-term upside remains warranted
FactSet Research Systems Inc. (FDS:USA)trades above historical averages relative to UAFRS-based (Uniform) Earnings, with a 23.2x Uniform P/E, implying somewhat optimistic expectations for the firm. However, management has concerns about their share repurchasing and dividend strategy, ability to meet revenue guidance, and grow their professional services business
Schlumberger Limited (SLB:USA)currently trades at historical lows relative to UAFRS-based (Uniform) Assets, with a 2.3x Uniform P/B. However, even at these levels, the market has bullish expectations for the firm, while management has concerns about their global market share, their sales across multiple segments, and margin compression
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 Wyndham Destinations (WYND), Array BioPharma, Inc. (ARRY), EPAM Systems, Inc. (EPAM)
This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.
The market is concerned about rapid profitability and growth declines, while management continues to see strong execution, spelling upside potential
Garmin Ltd (GRMN:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.3x 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 Fenix watch series margin and growth potential, and in their ability to expand their wearables business. As such, outperformance is likely justified
Highlighted Top Ideas
AKS – AK Steel Holding Corporation
DLX – Deluxe Corporation
FCX – Freeport-McMoRan Inc.
Other Recent Analyses
LEE – Lee Enterprises, Incorporated
MTOR – Meritor, Inc.
AMD – Advanced Micro Devices, Inc.
Palo Alto Networks, Inc. (PANW:USA)currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 30.0x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management has concerns about their ability to counter cyber-criminals, Application Framework and Logging Service margins, and their ability to succeed as a product company in the industry
Facebook, Inc. (FB:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 15.0x Uniform P/E. At these levels, markets are pricing in extremely bearish expectations for the firm, which appears unwarranted, given management’s confidence in their improved advertising efficiency, growing user engagement rates, and monthly active users
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: NXP Semiconductors N.V.
Other Highlights: AAPL, INFO, PAYX Other Recent Analyses: 5108:JPN, APD, AZO, BHP:AUS, CXO, EA, ECL, FIS, FIVE, HM B:CHE, IBM, KFY, PAYX, PM, ROST, VFC, WU
