ZIP - Valens Credit Report - 2024 06 24
Cash bond markets are slightly overstating credit risk with a YTW of 6.137% relative to an Intrinsic YTW of 5.506%, while CDS markets are accurately stating credit risk with a CDS of 82bps relative to an Intrinsic CDS of 77bps. Meanwhile, Moody's is overstating AMKR's fundamental credit risk, with its Ba3 credit rating four notcheslower than Valens' IG4+ (Baa2) rating.
Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, as a positive, management members have low change-in-control compensation relative to their average compensation, indicating they are unlikely to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.
Earnings Call Forensics™ of AMKR's Q1 2024 (04/29/2024) call highlights that management is confident when saying they are tripling their 2.5D technology capacity coming on stream by the end of the second quarter.
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:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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.
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