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Valens Research

Valens Credit Weekly Insights - 2018 12 19

Valens Credit Research Team highlighted ideas for AN, CVI, and YRCW. They have also provided recent analyses for RIG, CSTM and X, while JCP topped the quantitative outlier report for the week.
Underlyings
Advanced Micro Devices Inc.

Advanced Micro Devices is a semiconductor company. The company primarily provides x86 microprocessors, as standalone devices or as incorporated into an accelerated processing unit, chipsets, graphics processing units (GPUs), data center and personnel GPUs, and development services; server and embedded processors, semi-custom System-on-Chip products, development services and technology for game consoles. The company also licenses portions of its intellectual property portfolio. The company's segments are: Computing and Graphics, which consists of desktop, notebooks, commercial, and chipsets products; and Enterprise, Embedded and Semi-Custom, which includes server processors, and embedded P\processors products.

AK Steel Holding Corporation

AK Steel Holding is a producer of flat-rolled carbon, stainless and electrical steels products primarily for the automotive, infrastructure and manufacturing, and distributors and converters markets through its wholly-owned subsidiary, AK Steel Corporation. The company's other subsidiaries also provide customer solutions with carbon and stainless steel tubing products, solutions, tool design, hot- and cold-stamped steel components and assemblies. The company sells its carbon steel products mainly to customers in North America, and it sells its electrical and stainless steel products primarily in North America and Europe. The company also produces metallurgical coal through its AK Coal Resources, Inc. subsidiary.

AutoNation Inc.

AutoNation, through its subsidiaries, is an automotive retailer. The company provides a range of automotive products and services, including new vehicles, used vehicles, parts and service, which includes automotive repair and maintenance services as well as wholesale parts and collision businesses, and automotive finance and insurance products, which include vehicle service and other protection products, and the arranging of financing for vehicle purchases through third-party finance sources. The company owns and operates new vehicle franchises from stores located in the United States, in main metropolitan markets in the Sunbelt region. The company has three segments: Domestic, Import, and Premium Luxury.

Beazer Homes USA Inc.

Beazer Homes USA is engaged as a homebuilder. The company's homebuilding operations consist of the design, sale, and construction of single-family and multi-family homes. The company purchases land or obtains an option to purchase land, which, in either case, requires certain site improvements prior to home construction. When available in certain markets, the company also buys finished lots that are ready for home construction. The company has investments with land developers, other homebuilders and financial partners to acquire land positions, to manage its risk profile and to utilize its capital base. The company also acts as the general contractor for the construction of its new home communities.

Community Health Systems Inc.

Community Health Systems is a holding company. Through its subsidiaries, the company operates general acute care hospitals and outpatient facilities. The company provides healthcare services through the hospitals that it owns and operates and affiliated businesses in non-urban and selected urban markets. Services provided through the company's hospitals and affiliated businesses include general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. The company also provides additional outpatient services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers.

Constellium SE Class A

Constellium N.V. designs and manufactures a range of innovative specialty rolled and extruded aluminum products, serving primarily the aerospace, packaging and automotive end-markets. Co. has a strategic footprint of manufacturing facilities located in the United States, Europe and China. Co.'s product portfolio commands higher margins as compared to less differentiated, more commoditized fabricated aluminum products, such as common alloy coils, paintstock, foilstock and soft alloys for construction and distribution. Co. organizes its business around three operating segments: Aerospace & Transportation, Packaging & Automotive Rolled Products, and Automotive Structures & Industry.

CVR Energy Inc.

CVR Energy is a holding company. The company is engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in CVR Refining, LP (CVR Refining) and CVR Partners, LP (CVR Partners). CVR Refining is an independent petroleum refiner and marketer of transportation fuels. CVR Partners produces and markets nitrogen fertilizers in the form of urea ammonium nitrate and ammonia. The company's segments include: Petroleum, which includes refineries located in Coffeyville, KS and Wynnewood, OK and supporting logistics assets in the region; and Nitrogen Fertilizer, which includes nitrogen fertilizer manufacturing facilities located in Coffeyville, KS and East Dubuque, IL.

Denbury Resources Inc.

Denbury Resources is an independent oil and natural gas company. The company's operations are focused in two main operating areas: the Gulf Coast and Rocky Mountain regions. The company's properties with proved and producing reserves in the Gulf Coast region are situated in Mississippi, Texas, Louisiana and Alabama, and in the Rocky Mountain region are situated in Montana, North Dakota and Wyoming.

Freeport-McMoRan Inc.

Freeport-McMoRan is a holding company. Through its subsidiaries, the company is a mining company. The company operates assets with proven and probable reserves of copper, gold and molybdenum, and the company is a publicly traded copper producer. The company's portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits; and mining operations in North America and South America, including the Morenci minerals district in Arizona and the Cerro Verde operation in Peru. The company has organized its mining operations into four primary divisions: North America copper mines, South America mining, Indonesia mining and Molybdenum mines.

Lee Enterprises Incorporated

Lee Enterprises is a provider of local news and information, and a platform for advertising, in the markets it serves. The company's products provide print and digital editions, and its content and advertising is available through its websites and mobile apps. The company provides marketing services, mainly through its digital marketing agency, Amplified Agency, and through one of its subsidiaries, TownNews, the company provides web hosting and content management services for its media operations and other content producers. The company's also provides commercial printing, distribution of third party publications and management services to other local media operations.

Lennar Corporation Class A

Lennar is a homebuilder in the United States, an originator of residential and commercial mortgage loans, a provider of title insurance and closing services and a developer of multifamily rental properties. The company's homebuilding operations include the construction and sale of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through unconsolidated entities in which it has investments. The company operates under the Lennar brand name. The company creates and participates in joint ventures that acquire and develop land for its homebuilding operations, for sale to third parties or for use in the ventures' own homebuilding operations.

Manitowoc Company Inc.

Manitowoc is a provider of engineered lifting solutions. The company designs, manufactures and distributes a line of crawler-mounted lattice-boom cranes, which it sells under the Manitowoc brand name. The company also designs and manufactures top-slewing and self-erecting tower cranes, which it sells under the Potain brand name. The company designs and manufactures mobile telescopic cranes, which it sells under the Grove, Shuttlelift and National Crane brand names. The company provides crane product parts and services and crane rebuilding, remanufacturing and training services, which are delivered under the Manitowoc Crane Care brand name. The company's segments are: Americas, Europe and Africa, and Middle East and Asia Pacific.

McClatchy Company Class A

The McClatchy is a provider of independent local journalism as well as selected national news coverage through its Washington D.C. based bureau. The company is engaged in providing content, either editorial or through advertising. The company's media companies and its digital media agency, excelerate?, distribute content, including video products, through its owned and operated websites and mobile applications, third-party search and ad exchanges, social media platforms, electronic editions of its daily newspapers (e-editions) as well as its printed daily newspapers. The company also prints selected niche publications and community newspapers, as well as provides other print and digital direct marketing services.

Meritor Inc.

Meritor is a global supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, military, bus and coach, construction, and other industrial OEMs and certain aftermarkets. The company's segments are: Commercial Truck, which supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems; and Aftermarket, Industrial and Trailer, which supplies axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers.

Navistar International Corporation

Navistar International is a holding company. Through its subsidiaries, the company is a manufacturer of International? brand commercial trucks, proprietary diesel engines, and IC Bus? (IC) brand school and commercial buses. The company's segments include: Truck, which manufactures and distributes trucks and buses along with production of proprietary engines; Parts, which provides proprietary products to support the International commercial truck, IC Bus, proprietary engine lines, and export parts business; and Global Operations, which consists of the operations of its subsidiary, International Industria Automotiva da America do Sul Ltda that manufactures and distributes mid-range diesel engines.

Old COPPER Company. Inc.

J. C. Penney Company is a holding company whose principal operating subsidiary is J. C. Penney Corporation, Inc. The company's business consists of selling merchandise and services to consumers through its department stores and its website at jcpenney.com. The company's department stores and website serve the same type of customers, its website provides the same mix of merchandise as its store assortment along with other extended categories that are not provided in store, and its department stores accept returns from sales made in stores and via its website. The company sells family apparel and footwear, accessories, jewelry, beauty products through Sephora inside JCPenney, and home furnishings.

Parker Drilling Co.

Ryder System Inc.

Ryder System is engaged in transportation and supply chain management solutions. The company's segments include: Fleet Management Solutions, which provides full service leasing and leasing with maintenance options, commercial rental, contract or transactional maintenance services, and fleet support services such as vehicle administration and fuel service; Supply Chain Solutions, which provides logistics management services, including distribution management, transportation management and other services; and Dedicated Transportation Solutions, which combines equipment, maintenance, drivers, administrative services and additional services to provide a dedicated transportation solution.

Transocean Ltd.

Unisys Corporation

Unisys is an information technology company. The company's Services segment provides cloud and infrastructure services, application services and business process outsourcing services. In cloud and infrastructure services, the company assists clients to apply cloud and as-a-service delivery models. In application services, the company develops and manages applications for select industries and provides data analytics. In business process outsourcing services, the company assumes management of processes and functions for clients in target industries. The company's Technology segment designs and develops software and provides hardware and other related products including Unisys ClearPath Forward? and Unisys Stealth?.

United States Steel Corporation

United States Steel is a steel producer of flat-rolled and tubular products with production operations in the United States and Europe. The company is also engaged in railroad services and real estate operations. The company's segments are: North American Flat-Rolled, which produces slabs, strip mill plates, sheets and tin mill products; U. S. Steel Europe, which produces and sells slabs, strip mill plate, sheet, tin mill products and spiral welded pipe, as well as heating radiators and refractory ceramic materials; and Tubular Products, which produces and sells electric resistance welded steel casing and tubing (known as oil country tubular goods), and standard and line pipe and mechanical tubing.

Valaris PLC Class A

Ensco is an offshore contract drilling company engaged in providing offshore contract drilling services to the international oil and gas industry. As of Dec 31 2017, Co. owned and operated an offshore drilling rig fleet of 62 rigs. Co.'s rig fleet includes 12 drillships, 11 semisubmersible rigs, four moored semisubmersible rigs and 38 jackup rigs, including rigs under construction. Co.'s business consists of three operating segments: floaters, which includes its drillships and semisubmersible rigs; jackups; and other, which consists of management services on rigs owned by third-parties. Co.'s two reportable segments, floaters and jackups, provide one service, contract drilling.

Yellow Corporation

YRC Worldwide is a holding company. Through its operating subsidiaries, the company provides its customers a range of transportation services. The company's reporting segments include: YRC Freight, which provides a range of services for the transportation of industrial, commercial and retail goods in national, regional and international markets, primarily through the operation of owned or leased equipment in its North American ground distribution network; and Regional Transportation, in which its service portfolio includes regional delivery, guaranteed and expedited delivery, interregional delivery, cross-border delivery, and hollandregional.com, newpenn.com, and reddawayregional.com.

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  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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Many years later, our business model remains because little has changed on Wall Street.

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