Matador Resources is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with a focus on oil and natural gas shale and other unconventional plays. The company's operations are focused on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Also, the company conducts midstream operations, through its midstream joint venture, San Mateo Midstream, LLC together with San Mateo Midstream II, LLC.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Credit markets are grossly overstating MTDR's credit risk with a YTW of 5.873%, relative to an Intrinsic YTW of 2.683% and an Intrinsic CDS of 190bps. Meanwhile, Moody's is materially overstating the firm's fundamental credit risk, with its B2 credit rating seven notches lower than Valens' IG4+ (Baa1) credit rating. Incentives Dictate Behavior™ analysis highlights mostly favorable signals for credit holders. Management's compensation framework should drive them to focus on all three value drivers: asset efficiency, margin expansion, and revenue growth, which should lead to Uniform ROA improve...
Cognex Corporation (CGNX:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 42.8x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about the sustainability of revenue growth, gross margins improvement in logistics, and the potential of VisionPro Deep Learning 2.0. Specifically, management may be overstating their technology leadership position in the logistics end market, the potential of a major new logistics customer, and the advantages of their VisionPro Deep Learning 2.0 s...
Verisk Analytics, Inc. (VRSK:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 37.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, and management is confident about revenue growth, the Lens platform, and customer relationship development through a breadth of solutions. Specifically, management is confident organic revenue grew in the second quarter, the breadth of their family of solutions develops customer relationships, and they will utilize the Lens platform to expand customer sets and applications.
Leidos Holdings, Inc. (LDOS:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 16.2x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about margins, program delays, and wage inflation. Specifically, management may lack confidence in their ability to sustain adjusted EBITDA margin expansion, Defense Solutions segment organic revenue growth, and Health segment growth. In addition, they may be concerned about wage inflation and the terms of their new $380 million borrowing. Mo...
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