Tapestry, Inc. (TPR:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 13.6x Uniform P/E, implying expectations for profitability to fall to historically low levels, which, even despite management’s concerns in the near-term about integration of Kate Spade and headwinds in China, appears unwarranted given improving analyst expectations and recent tactical M&A activity

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 Laboratory Corporation of America Holdings (LH), AECOM (ACM), Commvault Systems, Inc. (CVLT)

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

Highlighted Top Ideas

GME – GameStop Corp.
LEN – Lennar Corporation
MGM – MGM Resorts International

Other Recent Analyses

AXL – American Axle & Manufacturing Holdings, Inc.
WYND – Wyndham Destinations, 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: The Estee Lauder Companies Inc.

Other Highlights: AMT, D, MCD Other Recent Analyses: AMGN, AN, ATVI, CSX, CTSH, HUM, MGM, MPC, MRK, MSFT, NSC, PSX, UNP, UTX, VOW3:DEU, X

The Coca-Cola Company (KO:USA) is currently trading above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 23.5x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about their recent acquisitions and investments, scaling new brands, and the challenging currency environment

Caterpillar Inc. (CAT:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.6x Uniform P/E. However, even at these levels, the market has bullish expectations for the firm, while management may have concerns about their profitability and growth levels, RI and E&T margin volatility, and their order rates and backlog

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 Medtronic plc (MDT), Broadcom Inc. (AVGO), Insperity, Inc. (NSP)

McDonald’s Corporation (MCD:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 28.4x Uniform P/E, implying bullish expectations for the firm. Moreover, management is confident about average check, transformation in their U.S. system, and shareholder returns

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

THRM appears to be heating up with market share and market opportunity growth, and ROA’ recovery, while the market may be misunderstanding their risk from the auto cycle, pointing to potential equity upside

American Tower Corporation (AMT:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 34.2x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about the balance of their portfolio, volatility in India, and their ability to remain within leverage targets

Highlighted Top Ideas

JCP – J. C. Penney Company, Inc.
KBH – KB Home
RYI – Ryerson Holding Corporation

Other Recent Analyses

BBY – Best Buy Co., Inc.
HCA – HCA Healthcare, 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: Zynga Inc.

Other Highlights: BHC, PINC, THRM Other Recent Analyses: ABBV, BMY, CAT, CHTR, DHI, DIS, GM, GNTX, KBH, MA, MO, MYL, PLNT, V, VALE3:BRA

Volkswagen Aktiengesellschaft (VOW3:DEU) currently trades near historical averages relative to UAFRS-based (Uniform) Assets, with a 1.1x Uniform P/B. At these levels, the market has muted expectations for the firm, and management may have concerns about maintaining strong performance, meeting guidance targets, and international segment performance

Activision Blizzard, Inc. (ATVI:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 14.3x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their advertising performance, partner network issues, and their ability to sustain elevated in-game revenue levels

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 Workday, Inc. (WDAY), ACI Worldwide, Inc. (ACIW), Prestige Consumer Healthcare Inc. (PBH)

Mylan N.V. (MYL:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 10.2x Uniform P/E. At these levels, the market is pricing in expectations for the firm to see profitability fall to near historically low levels, but management’s confidence in their ability to improve their product mix, capture market share, and lower costs suggest this is overly bearish. As such, longer-term outperformance is likely warranted

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

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

Gentherm Incorporated (THRM:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 15.3x Uniform P/E, implying bearish expectations for the firm. However, given management’s confidence about their margin expansion and focused growth initiatives, longer-term outperformance remains warranted