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The Latest from
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October 22, 2020
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. Company Specific Highlights & Insights...
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October 22, 2020
salesforce.com, inc. (CRM:USA) currently trades above recent historical averages relative to UAFRS-based (Uniform) earnings, with a 50.6x Uniform P/E. At these levels, the market has bullish expectations for the firm, and management is confident about Work.com, Salesforce Anywhere, and their investments...
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October 22, 2020
- Growth and Sentiment Signal We’re at the High End of a Range Bound Market. Profitability is likely to recover quickly from the recession, and key indicators point to reason for optimism for longer-term growth. However, management sentiment indicators are shifting more negatively around growth, which could hold down valuations in the near-term. Fundamentals should bounce back rapidly, but growing management pessimism about growth may disappoint investors in Q3
- The coronavirus pandemic has pushed the world into a short-term recession, but thanks to credit fundamentals, it’s likely not to be a protracted deep recession or long recovery. Favorable bank, corporate, and consumer credit fundamentals heading into this disruption still point to optimism for a strong recovery
- Sentiment indicators are again excessively bullish. The recent rally has pushed investors to exuberant levels, they are not focused on near-term risks. Valuations are expensive, and continued earnings growth is needed to justify them. Valuations and sentiment likely cap near-term upside, though any drop due to valuations, growth, and sentiment signals is capped by a lack of credit overhangs...
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October 21, 2020
Highlighted Top Ideas: ADNT – Adient plc, LB – L Brands, Inc., TDG – TransDigm Group Incorporated...
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October 21, 2020
CDS 1,108bps, Base Case iCDS 204bps
Negative Case iCDS 557bps, 2025 12.000% Bond YTW of 8.578%
iYTW of 2.358%, Caa1 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens
High Refinancing Need...
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October 21, 2020
EPR Properties (EPR:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 21.3x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about their ability to improve rent collections, their ability to collect cash and deferral payments, and the new Master Lease structure...
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October 20, 2020
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: MAT – Mattel, Inc. Other Highlights: AVB, CXO, UDR...
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October 20, 2020
Omega Healthcare Investors, Inc. (OHI:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 21.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about cash and liquidity levels, occupancy rates, and their investment portfolio...
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October 19, 2020
UDR, Inc. (UDR:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 86.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about their next-generation operating platform, state regulations, and short-term rentals...
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October 15, 2020
CDS 352bps, Base Case iCDS 215bps
Negative Case iCDS 269bps, 2025 8.000% Bond YTW of 4.393%
iYTW of 2.493%, B+ Rating from S&P, XO- (equivalent to BB+) Rating from Valens
High Refinancing Need...
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