The Latest from

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  January 17, 2024

  Acquisition bias undermines megatrends for this company

  

  The U.S. industrial sector is currently experiencing a notable shift, characterized by key megatrends such as the rise of industrial automation, increased investments in robust supply chain systems, and a growing preference for onshoring.

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  January 10, 2024

  There is a rating mismatch for this SaaS company

  

  Over the past decade, the SaaS industry has enjoyed robust growth, with companies in this sector often commanding high valuation multiples. Yet, recent macroeconomic headwinds have led to a significant downturn.

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  January 3, 2024

  This fintech company deserves a second look

  

  In the financial technology sector, companies that focus on small businesses and consumers often face a mix of risks and opportunities. These markets can change quickly, making them unpredictable, which leads credit rating agencies to be cautious about these companies.

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  December 27, 2023

  Rating agencies think this pool equipment maker is doomed in a recession

  

  The economic tides are turning fast. Back in 2021, we were experiencing economic euphoria. We saw that the pandemic didn't really slow the economy down, and people got used to remote working.

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  December 13, 2023

  Offshore expertise keeps this company solid in a volatile market

  

  The oil and gas exploration and production industry, particularly in the realm of offshore drilling, is an area that often draws close examination from rating agencies.

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  December 6, 2023

  Credit agencies don’t understand the potential of the supply chain supercycle

  

  For a while, we have been talking about how the supply chain supercycle will affect the U.S. economy and companies’ ability to benefit from it. Companies are investing back in their businesses to strengthen their supply chain, optimize operations, and renew their old properties and equipment.

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  November 22, 2023

  5G sparks revolution for this key player

  

  The U.S. is currently witnessing a significant surge in 5G investments, a trend that's reshaping the telecommunications industry.

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  November 15, 2023

  Stable demand isn’t enough to keep this toolmaker safe

  

  Rating agencies often view industry leaders with a favorable lens, attributing their established market presence to potential financial stability and resilience.

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  November 8, 2023

  It’s crunch time for this major beverage company

  

  The U.S. is increasing infrastructure spending to address the aging and deteriorating condition of its roads, bridges, public transportation, and other critical infrastructure. Many of these structures were built decades ago and are now in need of repair or replacement to ensure safety and efficiency.

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  November 1, 2023

  A safer credit rating is a fair game for this business model

  

  The cyclical nature of the oil & gas sector is often a subject of scrutiny by rating agencies. The fluctuating global demand and supply, geopolitical issues, and regulatory changes often lead to significant price volatility in this sector.

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  October 25, 2023

  Not all homebuilders are facing a cliff edge, this company is the proof

  

  The real estate market is facing challenges due to high mortgage rates. With rates now above 7%, this resembles peak levels since March 2002. As a result, the homebuilding sector is getting hit hard.

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  October 11, 2023

  This headhunter defies the looming recession

  

  The U.S. economy is facing the looming threat of a recession, which could have a significant impact on the job market.

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  October 4, 2023

  This company’s M&A success counters rating agencies’ assessments

  

  Cyclicality occurs when a sector’s business is closely tied to the macro environment. Commodity-exposed sectors such as oil and gas are generally cyclical as their prices are determined by supply and demand.

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  September 20, 2023

  The macro outlook shouldn’t be the only factor for rating agencies

  

  Many people thought rising rates and looming recession would end the positive trend in the housing sector.

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  September 13, 2023

  For this media company, AI is a friend, not a foe

  

  Artificial intelligence ("AI") was one of the stock market's biggest influences this year. In light of this, the future of a company is becoming increasingly tied to its ability to leverage AI.

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  August 30, 2023

  Don’t judge a payments company by its sector

  

  Rising inflation and interest rates are squeezing consumer spending and small businesses, impacting industries heavily dependent on them, like the payments sector. Rating agencies worry about consumer market volatility and exhibit bias against payment companies due to their substantial exposure to this instability. Priority Technology (PRTH), a fintech firm offering payment and data processing services, is an example of a payment company affected by this bias. In today's FA Alpha Daily, we'll examine PRTH's credit risk profile using Uniform Accounting and evaluate rating agencies' fairness in assessing the company.

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  August 23, 2023

  Rating agencies are wary of coal, but it may not be dying as fast

  

  Coal is a dying industry. It’s just dying at a much slower pace than most people think. Global coal demand peaked in 2013 and then steadily fell through 2020. Most people thought it would never recover as the world started transitioning to cleaner energy sources like natural gas, solar, and wind.

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  August 2, 2023

  Amid the pandemic-induced surge in home products and pet adoption, this company proves the rating agencies wrong

  

  The COVID-19 pandemic unleashed unprecedented shifts in consumer behavior and spending patterns. As people were confined to their homes, the demand for home products soared to historic highs. As individuals sought companionship and emotional support amidst isolation, pet ownership became a popular solution. This significant surge in pet adoption brought renewed attention to the pet care industry.

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  July 19, 2023

  Diamonds are a lender’s best friend

  

  Highly collateralized companies are attractive to lenders because their assets provide a buffer to cover loan amounts in the event of a default. Signet Group, the largest diamond retailer in the world, is a highly collateralized company given its portfolio of diamonds. However, rating agencies are concerned that the looming recession and falling demand for diamonds will put retailers in a more precarious position. In today's FA Alpha Daily, we'll use Uniform Accounting to assess Signet's credit risk profile to see whether rating agencies' concerns are justified.

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  July 5, 2023

  Oil and gas companies continue to be the point of concern for rating agencies

  

  Oil and gas businesses have a reputation as a boom or bust industry.

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