Summary

Antya Investments short thesis on Ceridian centres on management making use of every exception accorded to it in deferring costs from the current period while accelerating revenue recognition and emphasing non-GAAP measures under the guise of improved disclosures. In addition to making suboptimal acquisitions. Two Rivers short thesis on Builder Firstsource is built on any easing of the raw material shortage will rob BLDR of the ability to maintain elevated prices, hurting sales and margins and the continuation of the shortages means higher priced inventory will into BLDR will bring margins down. Finally, a housing downturn is beginning which will see both sales and earnings will fall. Gradient Analytics short thesis on Lamb Weston Holdings centres on earnings quality. To the extent that prepaid expenses and other current assets (OCA) are composed of capitalized operating expenses, outsized growth in the account can serve as harbinger of operating-margin compression as these deferred costs are inevitably recognized on the income statement. They estimate that the combination of higher prepaid expenses and lower accrued expenses may have combined to boost LW’s operating income by nearly 10% over the most recent TTM period. The Analyst thematic presentation was on Nordic “Stonks”, fertile ground for shorts. They believe there is an unravelling retail bubble due to high household savings rates, a very strong housing market, a tech-enabled and mobile, educated population, highly concentrated in urban areas, and a recently buoyant stock market. The IPO market has been very active, dominated by roll-ups where it is easy to play accounting games. Global Equity Research to follow TT Equity Research short on Boohoo as the 2022 annual report again underlines that Boohoo is managed for the wealth creation of its founders and executives. Accounting is a mess, lacks disclosure and increasingly adjusted to support management remuneration targets. Without cash generation and with debt rapidly mounting, they believe Boohoo shares are worthless paper.

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