Valens Equity Insights and Inflections - 2022 01 18
Holley (HLLY) has a dominant and expanding market position in the growing performance automotive aftermarket. Uniform Accounting highlights that the market is pricing in historically low growth and significantly weaker pricing power, signaling the potential forequity upside as the company continues executing.
Holley is currently the dominant player within a $4 billion subset of the growing $35 billion
performance automotive aftermarket. The company is using its trusted reputation and an
intelligent acquisition strategy to become the number one player in an additional $5 billion
slice of the market, a trend the market seems to be missing. Holley has the potential to
continue growing and maintain significant pricing power in this fairly inelastic market,
suggesting it should be able to outperform the market's bearish expectations.
HLLY's management is closely aligned to focus on high quality growth, a critical factor for
driving equity upside.
Management confidence in the Q3 earnings call about meeting sales guidance despite
significant near-term headwinds suggest management is positioned to execute above
market expectations.
MRNA Q3 2021 Embedded Expectations Analysis – Market expectations are for Uniform ROA to fade, and management may be concerned about guidance, COVID vaccine, and non-COVID portfolio
VRSK Q3 2021 Embedded Expectations Analysis – Market expectations are for Uniform ROA to improve, and management is confident about analytics, ACTINEO, and product development
TTD Q3 2021 Embedded Expectations Analysis – Market expectations are for Uniform ROA to reach a new peak, but management may have concerns about Unified ID, growth, and advertising efficiency
HLLY, MRNA, TTD, VRSK, AKAM, HOLX, LDOS, PM, QRTE.A
Akamai Technologies provides solutions for securing, delivering and optimizing content and business applications over the Internet. The company provides online solutions for the security, delivery and acceleration of websites and applications. The company's solutions include: cloud security solutions; enterprise security solutions; web and mobile performance solutions; media delivery solutions; carrier solutions; and services and support solutions, which provides an array of service and support offerings that are designed to assist its customers with integrating, configuring, optimizing and managing its main offerings.
Hologic is a developer, manufacturer and supplier of diagnostics products, medical imaging systems, surgical products and light-based aesthetic and medical treatment systems. The company's segments are: Diagnostics, which provides diagnostic products which are used to aid in the diagnosis of human diseases; Breast Health, which provides solutions for breast cancer care for radiology, pathology and surgery; Medical Aesthetics, which provides aesthetic treatment systems, including SculpSure, PicoSure and MonaLisa Touch; GYN Surgical, which includes NovaSure Endometrial Ablation System to treat abnormal uterine bleeding; and Skeletal Health, which includes the Horizon DXA, a dual energy x-ray system.
Leidos Holdings is a holding company. Through its subsidiaries, the company is engaged in a science, engineering and information technology that provides services and solutions in the defense, intelligence, civil and health markets. The company's defense solutions segment deploys solutions in the areas of intelligence surveillance and reconnaissance, enterprise information technology, integrated systems, cybersecurity and global services. The company's civil segment integrates and protects physical, digital and data domains. The company's health segment delivers solutions to federal and commercial customers that are responsible for the health and well-being of people including service members and veterans.
Moderna is creating a new generation of medicines based on messenger RNA to improve the lives of patients. The company uses its platform to identify and develop new mRNA medicines. When the company identifies a combination of platform technologies or programs across mRNA technologies, delivery technologies, and manufacturing processes that can enable shared product features across multiple potential mRNA medicines, it groups those programs as a modality. The company has created six modalities including prohylactic vaccines; cancer vaccines; intratumoral immuno-oncology; localized regenerative therapeuctics; systemic secreted therapeutics; and systemic intracellular therapeutics.
Philip Morris International is a holding company. Through its subsidiaries, the company is a tobacco company engaged in the manufacture and sale of cigarettes, smoke-free products and associated electronic devices and accessories, and other nicotine-containing products in markets outside the United States. The company's portfolio comprises international and local brands including Marlboro, which is complemented in the premium-price category by Parliament. The company's other international cigarette brands are Bond Street, Chesterfield, L&M, Lark and Philip Morris. The company also owns various local cigarette brands, such as Dji Sam Soe, Sampoerna A and Sampoerna U in Indonesia, and Fortune and Jackpot in the Philippines.
Qurate Retail owns interests in subsidiaries and other companies which are primarily engaged in the video and online commerce industries. The company's principal businesses and assets include its consolidated subsidiaries: QVC, Inc., which curates and sells a variety of consumer products; HSN, Inc., which operates an e-commerce website, a mobile application, social pages and Shop By Remote technology; Cornerstone Brands, Inc., which consists of a portfolio of aspirational home and apparel brands; and Zulily, LLC, which is an online retailer providing merchandise including women's, children's and men's apparel and other products such as home, accessories and beauty products.
The Trade Desk is a technology company for buyers of advertising. Through the company's self-service, cloud-based platform, ad buyers can create, manage, and optimize data-driven digital advertising campaigns across ad formats, including display, video, audio, native and social, on a multitude of devices, such as computers, mobile devices, and connected TV. The company's platform's integrations with data, inventory, and publisher partners provides ad buyers reach and decisioning capabilities, and its enterprise application programming interfaces enable its customers to develop on top of the platform.
Verisk Analytics is a data analytics provider serving customers in insurance, energy and specialized markets, and financial services. The company has three segments: Insurance, which provides underwriting and ratings and claims insurance data for the United States property and casualty insurance industry; Energy and Specialized Markets, which provides research and consulting data analytics for the global energy, chemicals, and metals and mining industries; and Financial Services, which provides benchmarking, decisioning algorithms, business intelligence, and customized analytic services to financial institutions, payment networks and processors, alternative lenders, regulators and merchants.
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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.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
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- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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