10Q / 10K text analysis
By utilising AI, NLP, data analytics and qualitative analyst oversight, 280First can glean material and actionable insights on companies which will be missed by most institutional investors. Recent highlights include: 1) Lockheed Martin - changing expectations for future aircraft delivery; LMT’s 2023 10K no longer references its previously expected 156 per year delivery rate. 2) Adobe - brighter capital resources outlook. Acquisitions planned? 3) Alphabet - higher expectations for operating margin trend. 4) Comcast - concerns on multichannel video provider agreements. 5) Mondelez - losing shelf space due to disputes. Delay / unable to raise prices. 6) Sysco - dialling back growth expectations.
Edition: 179
- 09 February, 2024
Communications
DTC subscriber growth has stalled in the face of price increases, marketing cuts and future content reductions, while the company’s cost allocation accounting means streaming losses in FY22 ($3.4bn) were understated relative to the accounting policies of Warner Bros Discovery / Comcast to the tune of $2.5bn, giving an indication of the challenges. Despite assuming a DIS / Hulu merger, Arete expects DTC to generate one-third less EBITDA long-term than they previously modelled and have lowered their TP from $94 to $65 (25% downside).
Edition: 165
- 21 July, 2023
Communications
The shares have faced pressure as investors have been focused on slowing broadband net additions, which were strong during Covid as demand was pulled forward. However, at current levels, investors are acquiring a top-notch cable business at a heavily discounted valuation and are receiving an extra ~$25 a share in additional value, representing the company’s NBCU and Sky businesses, for free. CMCSA has recently reached its targeted leverage levels (net debt/EBITDA) of ~2.3x and Jonathan Boyar expects returns to shareholders to continue to be robust (2022 saw a record amount of capital returned to shareholders; dividend increased for 15 straight years). 100%+ upside.
Edition: 161
- 26 May, 2023
Technology
Priced for perfection despite signs of growth waning - overly bullish management forecasts to leave investors disappointed. CALX has benefitted from an increase in broadband service providers adopting its software solutions during a time when people were staying at home, but those trends are now changing. Comcast and Altice USA have both recently reported a decline in broadband subscribers and Hamed Khorsand believes CALX’s customer concentration towards smaller providers makes it prone to even greater volatility with orders. 12-month TP $13 (75% downside).
Edition: 120
- 01 October, 2021