reports
- Valens Research
WDC - Valens Credit Report - 2024 05 07
Cash bond markets are overstating credit risk with a YTW of 6.821% relative to an Intrinsic YTW of 5.461% and a CDS of 183bps relative to an Intrinsic CDS of 80bps. Furthermore, Moody's is overstating WDC's fundamental credit risk with its Baa3 credit rating two notches below Valens' IG4+ (Baa1) credit rating. Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As a positive, management members have low change-in-control compensation relative to their annual compe...
- Valens Research
MU - Valens Credit Report - 2024 04 29
Cash bond markets are slightly overstating credit risk with a YTW of 5.423% relative to an Intrinsic YTW of 4.903% and a CDS of 72bps relative to an Intrinsic CDS of 28bps. Meanwhile, Moody's is overstating MU's fundamental credit risk with its Baa3 credit rating, two notches below Valens' IG4+ (Baa1) credit rating. Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As positives, management members are material owners of MU equity relative to their annual compens...
- Valens Research
CIEN - Valens Credit Report - 2024 05 06
Credit markets are slightly overstating CIEN's credit risk with a YTW of 6.602% relative to an Intrinsic YTW of 5.862% and an Intrinsic CDS of 115bps. Furthermore, Moody's is overstating the company's fundamental credit risk, with its speculative Ba1 credit rating three notches lower than Valens' IG4+ (Baa1) credit rating. Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. As a positive, management has low change-in-control compensation relative to thei...
- Valens Research
HOLX - Valens Credit Report - 2024 05 06
Credit markets are slightly overstating HOLX's credit risk with a YTW of 6.029% relative to an Intrinsic YTW of 5.409% and an Intrinsic CDS of 77bps. Furthermore, Moody's is overstating the company's fundamental credit risk, with its speculative Ba1 credit rating three notches lower than Valens' IG4+ (Baa1) credit rating. Incentives Dictate Behavior™ analysis highlights positive signals for credit holders.HOLX's compensation framework incentivizes management to improve all three value drivers:...
- Valens Research
TDG - Valens Credit Report - 2024 04 26
Credit markets are overstating credit risk, with a cash bond YTW of 6.901% relative to an Intrinsic YTW of 6.001% and an Intrinsic CDS of 134bps. Furthermore, Moody's is materially overstating TDG's fundamental credit risk with its highly speculative B1 credit rating five notches below Valens' IG4 (Baa2) credit rating. Incentives Dictate Behavior™ analysis highlights mostly negative signals for creditors. That said, most anagement members have low change-in-control compensation relative to thei...
- Valens Research
PBF - Valens Credit Report - 2024 04 22
Credit markets are overstating credit risk with a YTW of 6.853% relative to an Intrinsic YTW of 6.083% and an Intrinsic CDS of 139bps. Meanwhile, credit markets are materially overstating the firm's fundamental credit risk, with its Ba3 credit rating five notches lower than Valens' IG4+ (Baa1) credit rating. Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As a positive, management members are material owners of PBF equity relative to their annual compensation,...
- Valens Research
NRG - Valens Credit Report - 2024 04 02
Credit markets are overstating NRG's credit risk with a YTW of 5.936 % relative to an Intrinsic YTW of 4.559% and a CDS of 145bps relative to an Intrinsic CDS of 35bps. Furthermore, Moody's is overstating the firm's fundamental credit risk, with its Ba1 credit rating two notches lower than Valens' IG4 (Baa2) credit rating. Incentives Dictate Behavior™ analysis highlights mostly positive signals for credit holders. NRG's metrics should generally drive management to improve all three value driver...
- Valens Research
SYNA - Valens Credit Report - 2024 04 12
- Credit markets are slightly overstating SYNA's credit risk with a YTW of 6.570% relative to an Intrinsic YTW of 6.020% and an Intrinsic CDS of 159bps. Furthermore, Moody's is overstating SYNA's fundamental credit risk with its speculative Ba2 credit rating four notches below Valens' IG4+ (Baa1) credit rating. Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. Although most management members are not material owners of SYNA equity relative to their annual compen...
- Valens Research
TWI - Valens Credit Report - 2024 03 28
Credit markets are materially overstating TWI's credit risk with a YTW of 7.338% relative to an Intrinsic YTW of 5.198% and an Intrinsic CDS of 99bps. Furthermore, Moody's is materially overstating TWI's fundamental credit risk with its highly speculative B1 credit rating five notches below Valens' IG4 (Baa2) credit rating. Incentives Dictate Behavior™ analysis highlights positive signals for creditors. TWI's metrics should generally drive management to focus on margins and turns, which could ...
- Valens Research
- Valens Research
Valens Equity Weekly Insights - 2024 04 30
Hyatt Hotels Corporation (H) is positioned to survive and thrive post-pandemic, and it's starting to show signs that it is executing on its long-term transformational goals. Uniform Accounting confirms that the market is not pricing in the full force of this transformation, suggesting equity upside continues to be warranted. Before the pandemic, Hyatt began transforming its business model to focus on a franchise model, similar to what hotel giants Hilton and Marriott have already done. The pand...
- Valens Research
- Valens Research
Valens Equity Weekly Insights - 2024 04 23
Micron Technology (MU) is a leader in the memory-storage segment of the chip market. Its stock took a major hit as DRAM prices collapsed in 2022. However, Uniform Accounting helps us see that the market is overreacting to the down part of the cycle, and it's understating Micron's strong position. Micron is one of three players to have consolidated the memory chip market between 1995 and 2014. While it used to struggle with profitability, especially through the down part of cycles, since 2014, ...
- Valens Research
- Valens Research
Valens Equity Weekly Insights - 2024 04 16
Antero Resources (AR) has a low-cost, unhedged inventory of high quality natural gas. Uniform Accounting highlights what the company's returns could look like during a strong natural gas cycle, something that the market is not pricing in. That makes Antero a compelling buy. When natural gas prices have been above breakeven, Antero's Uniform ROA has historically gotten above 10%, as high as 22%. The company is set to get back to those levels in the current market, as it has the capacity to extra...
- Valens Research
- Valens Research
Valens Equity Weekly Insights - 2024 04 09
Constellation Brands (STZ) has transformed its profitability profile through its massive expansion in the beer market and move to premiumization over the last seven years. Uniform Accounting highlights that the market is pricing in a reversal of recent profitability expansion and below-average growth, but management is confident about executing on their strategy and is aligned to continue to do so, signaling the potential for equity upside as the company continues executing. Constellation has...
- Valens Research
- Valens Research
QRTE - Valens Credit Report - 2024 04 02
Credit markets are materially overstating QRTE.A's credit risk with a YTW of 8.391% relative to an Intrinsic YTW of 6.771% and an Intrinsic CDS of 137bps. Furthermore, S&P is materially overstating QRTE.A's fundamental credit risk with its CCC+ credit rating six notches below Valens' XO- (equivalent to BB+) credit rating. Incentives Dictate Behavior™ analysis highlights mostly positive signals for credit holders. Specifically, QRTE.A's metrics should generally drive management to focus on all t...
- Valens Research
NRG - Valens Credit Report - 2024 04 02
Credit markets are overstating NRG's credit risk with a YTW of 5.936 % relative to an Intrinsic YTW of 4.559% and a CDS of 145bps relative to an Intrinsic CDS of 35bps. Furthermore, Moody's is overstating the firm's fundamental credit risk, with its Ba1 credit rating two notches lower than Valens' IG4 (Baa2) credit rating. Incentives Dictate Behavior™ analysis highlights mostly positive signals for credit holders. NRG's metrics should generally drive management to improve all three value driver...
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