GradientAnalytics

Gradient Analytics is a leading independent equity research firm with expertise in financial analysis, forensic accounting, and executive behavior.

[GradientAnalytics @EarningsQuality]

Investors await bullish catalysts as inflation, interest rates, and money supply growth show signs of topping https://t.co/dWYTfemwh3 via @sabrientsystems

[GradientAnalytics @EarningsQuality]

Non-payment of rent impacted Omega Healthcare Investors’ $OHI, resulting in a reduction in collateral supporting non-paying operators. A substantial 14.5% of contractual rents and interest are now involved in restructuring discussions as a result of nonpayment. #earningquality

[GradientAnalytics @EarningsQuality]

We believe there is high risk of dilution at Ellington Financial $EFC. In Q1, the weighted average number of shares +31% YOY, part of long-term trend (5yr CAGR +13%). Even as NII expanded, massive losses from originators that EFC invested in drove earnings down. #earningsquality

[GradientAnalytics @EarningsQuality]

Convergence of negative events depresses sentiment and valuations but provides new buying opportunity https://t.co/ofI1FLXzhk via @sabrientsystems

[GradientAnalytics @EarningsQuality]

$MCD announced it was selling its Russian locations to a local buyer. $MCD expects to take a $1.2-1.4 billion charge to net investment in the market and FX translation losses in shareholders’ equity which amounts to 12.8% of TTM operating profit. #unclevanya #earningsquality

[GradientAnalytics @EarningsQuality]

Shifting gears: 7 tips for professional success for new grads and young professionals https://t.co/BIUhwDu7rP via @sabrientsystems @ScottMartindale

[Daniel S. Loeb @DanielSLoeb1]

Freedom isn't free. Neither is stock based comp.

[GradientAnalytics @EarningsQuality]

$ARRY a solar tracking manufacturer gave notice it would terminate CEO's employment 4/5/22, filed its 10K on 4/6/22 with a material weakness related to revenue recognition and offered restatements which reduced Q1-3 sales by $7.4M and net income $5.8M

[GradientAnalytics @EarningsQuality]

Just this morning, $PLAY announced the $835M acquisition of Main Event, following the close CEO Morris will take over the combined co. $PLAY Interim CEO Sheehan will return to his role as CoB. Sheehan expects Morris to have a "whole lot of FUN in the process" #executiveturnover

[GradientAnalytics @EarningsQuality]

Shareholder activism at Dave & Buster's $PLAY from Hill Path (10% owner) and KKR Credit (7%). There has also been excessive C-suite turnover as the company has churned through 4 CFOs and 3 CEOs in the last 5 years, concurrent with softening demand. #earningsquality #execturnover

[GradientAnalytics @EarningsQuality]

Merck & Co.’s $MRK Q4 earnings benefitted from an unusually low effective tax rate of 4.3%. Further, it appears that recovery drove YOY growth rather than sustainable demand. Last year CEO Kenneth Frazier retired and CFO Robert Davis took over. #earningsquality #ETR

[GradientAnalytics @EarningsQuality]

Despite uncertainties from war, oil, inflation, and interest rates, have stocks put in a bottom? https://t.co/OgRHz2T1iY via @sabrientsystems

[GradientAnalytics @EarningsQuality]

Two Harbors Investment $TWO relabeled “core earnings” to “earnings available for distribution” based on feedback from the SEC. $TWO also reduced its Agency RMBS/TBA position as spread tightening from Federal Reserve purchases made the investment less attractive. #earningsquality

[GradientAnalytics @EarningsQuality]

Stimulus fueled demand evaporated & $RCII faced higher delinquency and loss rates. The Acima seg. skip/stolen losses were 11.8% of revenue +10.8% YOY on a pro-forma basis, and Rent-a-Center skip/stolen losses were 4% of sales up from 2.6% last year. #earningsquality #shrinkage

[GradientAnalytics @EarningsQuality]

After outperforming TTM non-GAAP EPS 10% (as of Q3), Rent-A-Center $RCII missed Q4 earnings by a staggering 33%. Looking forward, the company has a rocky road ahead. 2022 sales guidance came in 14% lower than analysts expected, and EPS guidance was 33% lower than anticipated.

[GradientAnalytics @EarningsQuality]

Companies may adjust earnings for COVID-19 related charges if they are not expected to recur once the pandemic subsides and are clearly separable from normal operations. In this case, the SEC contended the latter. #earningsquality #nonrecurring

[GradientAnalytics @EarningsQuality]

The SEC asked Ladder Capital $LADR to revise its calculation of distributable earnings. During H1 2020, $LADR excluded $16.9M in COVID expenses, a whopping 37% of distributable earnings. The company now describes COVID impacts through a footnote rather than explicit adjustments.

[Scott Martindale @ScottMartindale]

Latest post on Sabrient blog is by Ian Striplin, analyst at Gradient Analytics, forensic accounting research primarily for short idea generation. He gives his thoughts on SEC's proposed short selling rule... https://t.co/LMQlUA4oXW

[GradientAnalytics @EarningsQuality]

Today, Gradient published a new Snapshot report with a negative outlook on an $8B aerospace co. We believe the company's post-pandemic recovery may take longer relative to its industry. We believe that our view is backed up by several earnings quality concerns. #earningsquality

[GradientAnalytics @EarningsQuality]

Today, Gradient announced its latest short thesis on a $2.2 billion IT and cybersecurity firm. We believe that a confluence of fundamental and accounting headwinds may hamper future growth and profitability. #earningsquality #sustainableearnings