Report by Valens Research

Valens conducts deep fundamental work to identify investment themes that could underperform the broader market, and leverages proprietary tools including an adjusted accounting database, Embedded Expectations Analysis, and Earnings Call Forensics, among others, to identify which names are at risk for material downside. Over the past year, their Thematic Short Idea List has declined by 18%, while the broader market has only declined by c.6%, showcasing how owning these names in a long portfolio could lead to significantly poorer results. Recent shorts include Snap (-81% since inception), Six Flags (-42%), and Cognex (-41%).