- Managements Showed Growth Bullishness in October, And the Vaccine Helps. Last month we highlighted the potential we’d be in a range bound market if growth signals couldn’t inflect more positively. Even before the election, management teams started to show more confidence in their outlook, and with the vaccine providing visibility, investment plans may resume sooner, helping drive earnings growth and stock market appreciation. Fundamentals should bounce back rapidly
- 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 may cap near-term upside, though any drop due to valuations and sentiment signals is capped by a lack of credit overhangs and a potential acceleration in growth...
The Latest from
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November 19, 2020
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November 19, 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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November 19, 2020
Oak Street Health, Inc. (OSH:USA) currently trades at a premium relative to UAFRS-based (Uniform) assets, with a 68.8x Uniform P/B. At these levels, the market has bullish expectations for the firm...
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November 18, 2020
Workday, Inc. (WDAY:USA) currently trades near recent highs relative to
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UAFRS-based (Uniform) assets, with an 11.6x Uniform P/B. At these levels, the market is pricing in bullish expectations for the firm... -
November 18, 2020
Highlighted Top Ideas: GME – GameStop Corp., LEN – Lennar Corporation, RAD – Rite Aid Corporation...
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November 17, 2020
NIKE, Inc. (NKE:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 36.7x Uniform P/E. At these levels, the market has bullish expectations for the firm...
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November 17, 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: NFLX – Netflix, Inc. Other Highlights: INTU, JBL, ZTS...
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November 16, 2020
Jabil Inc. (JBL:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 15.4x Uniform P/E. At these levels...
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November 13, 2020
Lam Research Corporation (LRCX:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 15.9x Uniform P/E, implying bearish expectations for the firm. Although management appears concerned about CSBG growth, China demand, and DRAM customer spend, market expectations are overly bearish, suggesting longer-term upside remains warranted...
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November 13, 2020
No traded CDS, Base Case iCDS 215bps, Negative Case iCDS 1,100bps, 2023 10.000% Bond YTW of 9.979%, iYTW of 2.389%, B3 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens, Moderate Refinancing Need...
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November 12, 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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November 12, 2020
Intuit Inc. (EXPE:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 42.4x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about their QuickBooks Cash account, operating margins, and new customer growth...
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