The Latest from

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  June 28, 2023

  Rating agencies are mistaken about this dying business

  

  The print media industry is in decline, as more and more people are getting their news online. This has led rating agencies to downgrade the credit ratings of traditional media companies, such as News Corporation (NWSA). However, NWSA is heavily invested in digital assets, and its true risk may not be as high as the rating agencies suggest. In today's FA Alpha Daily, let's look at News Corporation using Uniform Accounting to compare the company's profitability to its obligations and get a better sense of its true financial health.

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  June 21, 2023

  This commoditized business confused the minds of rating agencies

  

  For the last few weeks, we have been talking about how rating agencies disfavor commoditized businesses due to their cyclical nature. The cyclical nature of the semiconductor industry has caused rating agencies to be highly concerned, despite the sector’s impressive performance year to date.

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  June 14, 2023

  A PE firm helped this retailer get on its feet. The credit market isn’t impressed

  

  PE firms and BDCs are often the subjects of criticism due to perceived benefits from tax loopholes.

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  June 7, 2023

  Rating agencies have their sights set on this health care company’s massive 2027 headwall

  

  Many healthcare supply businesses rode the wave of success in recent years, thanks to the impact of the pandemic.

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  May 31, 2023

  This chemical company is the next victim of rating agencies

  

  For the last few weeks, we have been mentioning how rating agencies are biased toward commodity-based businesses and do not analyze these businesses individually. Another example of this is LSB Industries (LXU). The company is a diversified chemicals manufacturer.

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  May 24, 2023

  This oil & gas company deserves more credit for its flexibility

  

  When it comes to assessing the creditworthiness of oil & gas companies and other commodity-based cyclical businesses, there's a general perception of higher risk.

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  May 17, 2023

  This commodity company is much safer than rating agencies suggest

  

  Commodity enterprises are considered high risk as they are tied to cyclical commodity prices. Nonetheless, capitalizing on favorable cycles and catalysts can be advantageous. Such is the case for Alcoa Corporation (AA), a commodity-based aluminum smelting business. Despite benefitting from significant tailwinds, rating agencies continue to overlook its business. In today’s FA Alpha Daily, we will analyze Alcoa’s profitability in relation to its debt obligations using Uniform Accounting to determine its true credit risk.

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  May 10, 2023

  Going public helped this massive food company survive

  

  Consumer staples companies are often considered to be among the most stable companies globally. They provide everyday goods that consumers need, such as food, beverages, household products, and personal care items. To add, they’re some of the largest conglomerates on earth.

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  April 19, 2023

  As-reported metrics miscalculate the credit risk for this e-commerce powerhouse

  

  It's amazing how history repeats itself. In the early 2000s, the rating agencies couldn't make sense of Amazon (AMZN) when it issued debt. Due to the distortions in as-reported accounting that hid the true profitability of the company, rating agencies rated Amazon like it was going to go bankrupt in 2 years…

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  April 5, 2023

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

  

  The "At-Home Revolution" has caused a shift in housing preferences, with people moving to suburban areas for more spacious homes due to remote work, online education, and shopping. Hayward Holdings (HAYW), a company that sells all kinds of parts for pool improvement and maintenance has benefitted from this revolution. However, credit rating agencies are concerned about bankruptcy risk due to a potential recession. In today's FA Alpha Daily, we will look at Hayward Holdings using the Uniform Accounting framework to assess its true credit risk based on its debt obligations and its profitability.

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  March 29, 2023

  Credit markets seem to misunderstand the underlying risk for this company

  

  When a company conducts a spin-off on one part of its business, the aim is usually to increase profitability or efficiency. This complicates things for investors since this action could significantly affect the company’s future for better or worse, and there are always risks involved in these major transactions.

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  March 15, 2023

  This expected transaction could change the fate of Italy’s largest telecom operat

  

  Some companies are taking on massive debt and have difficulties when the maturities come.

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  March 8, 2023

  This utility company is much riskier than rating agencies think

  

  As opposed to how it's widely known, utility companies do not make money by actually selling and distributing electricity or gas to their customers. They make money by investing in infrastructure or assets, like pipes and wires, that provide public utility services to customers.

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  March 1, 2023

  Credit markets overlook the efforts of this coal miner

  

  One of the industries that was significantly affected by the pandemic was coal mining. Due to restrictions, lockdowns, and declining demand, profitability dipped in 2020.

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  February 22, 2023

  This market consolidator has a much safer credit risk than rating agencies think

  

  Acquisition is the name of the game when a company wants to cement its market dominance. Companies usually take on debt to finance their acquisitions, which is why most of them are considered as high credit risk companies. Although, if an acquisition can increase productivity and growth then this action should not always be considered as a high risk. In today's FA Alpha, we will evaluate Vista Outdoor, a company that has an aggressive acquisition strategy, using uniform accounting to see if the rating agencies are right about the company's high-credit risk and high chance of bankruptcy.

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  February 15, 2023

  This company has many tailwinds behind it but rating agencies fail to recognize them

  

  The world is inevitably transitioning into becoming a cashless, paperless society due to the digitization of money and developing payment systems. As we move into this transformation, we don’t only need banks or card networks like Visa (V) and Mastercard (MA). We also need payment processors that connect merchants, merchant banks, card networks, and consumers to make card payments possible.

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  February 8, 2023

  Credit markets think this energy company will go bankrupt in the next few years

  

  While most of the sectors record massive losses all around the world, the energy sector had an impressive performance.

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  February 1, 2023

  Rating agencies account for too much credit risk for this company

  

  The biotechnology and pharmaceutical sectors have different dynamics relative to other industries. People's perception of these industries changed when they realized that the innovation coming from biotech and pharma is critical to our lives. In today's FA Alpha, let's examine under the Credit Cash Flow Prime™ how ICON Public Limited Company's innovation can drive higher profit to meet its obligations.

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  January 25, 2023

  This specialty retailer is much safer than rating agencies think

  

  The pandemic and the At-Home Revolution changed our lives in many aspects, including our work, education, relationships, and consumption. We turned to online shopping as going to malls was impossible. We were stuck in our homes, which made us spend more money at home.

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  January 18, 2023

  Rating agencies fail to recognize the tailwinds this tech company is about the get

  

  The last year has been tough for many companies but technology firms were one of the most affected ones.

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