EVENTS:   Best Equity Short Ideas Conference Call 12 - Zach Shannon/Corto Capital Advisors & Craig Huber/Huber Research Partners & Thomas Beevers /Forensic Alpha & Ed Steele/Iron Blue Financials & Bill Campbell/Paragon Intel - 12 Nov 25   Will AI Deflate the World? Macro Lessons from Three Industrial Revolutions and China - Manoj Pradhan/Talking Heads Macro - 13 Nov 25     ROADSHOWS: Forest Products Sector Equity and Commodity Research With Expertise in Distressed Debt - Kevin Mason /ERA Research   •   London   12 - 14 Nov 25       Buyside to Buyside Forum and Expert Calls across TMT, Consumer, Healthcare and Fintech - Andrew Peters /Revelare Partners   •   London   17 - 19 Nov 25       Fundamental US Healthcare Short Ideas - Dr Elliot Favus /Favus Institutional Research   •   London   17 - 19 Nov 25      

Fortnightly Publication Highlighting Latest Insights From IRF Providers

Company Research

Keurig Dr Pepper (KDP)

Consumer Staples

Paragon Intel

Tim Cofer will extend his proven track record of growing corporations organically by capturing market trends and creating economies of scale as well as driving profits inorganically through M&A. Paragon Intel interviewed former colleagues who worked with Cofer for more than 30 years combined. Sources gave him the highest rank for his strategic acumen and fitness as a CEO. However, this praise is somewhat offset by the beliefs of some that he lacks transparency and can be arrogant. Paragon likes the appointment. They believe Cofer’s ability to create a very cohesive and forward-looking strategy makes him well suited to lead KDP.

Edition: 177

- 12 January, 2024

Higher rates and the FASB may be about to break up the supply chain finance party

Behind the Numbers

BTN have been warning investors about companies enjoying an unsustainable tailwind to cash flow growth by accelerating their use of short-term financing vehicles. However, rising rates are about to end the SCF party. They highlight Keurig Dr Pepper, JM Smucker and Procter & Gamble who have utilised SCF arrangements to a material degree and offer a simple framework for assessing the impact on their earnings and cash flows. They also discuss the implications of the FASB announcement this summer that it will be requiring enhanced disclosure regarding these programs (new rules go into effect in 2023).

Edition: 146

- 14 October, 2022

Earnings Quality Matters

Behind the Numbers

Increasingly aggressive accounting practices means it is only a matter of time before these companies face a day of reckoning:

Keurig Dr Pepper (KDP) - touts its debt reduction efforts, but a closer look reveals the company is simply moving debt to unorthodox short-term financing instruments.
Iron Mountain (IRM) - many integral cash costs are ignored by the company’s REIT metrics and are set to rise when the impact of Covid wanes. If these costs are subtracted from AFFO, IRM is not covering the dividend.
IBM (IBM) - large, never-ending charges and non-operational benefits have significantly eroded the quality of reported profit growth.

Edition: 119

- 17 September, 2021