Would you like to entertain yourself with a story about one of the greatest schemes in the history and, maybe, learn a few plays? This story is about three brave autistic brothers, who almost cornered the entire commodity and how one (not so brave, but shrewd) bank did it without anyone noticing. As in any good fable – there’s a moral and a strategy that you could draw from it. The year is 1971. Nixon temporarily abolishes gold standard. And every temporary government program is never reversed, as you know. Trading price of gold went sky high: from 270s to 800s in two years or so. Enter Hunt brothers, sons of H. L. Hunt, oil tycoon, one of, if not the, richest man in the world at that time. Hunt family was, what one might describe as, right-wing libertarian and anti-globalist. They believed that Keynesian economics and the US shift to the left in the 60s will lead to the debasement of the US dollar and monetary collapse. Thus, return to the gold or silver standard was the way, as they thought. Allegedly, Hunts also had a feud with Rothschild family and other financial speculators, and were resentful towards the US government for doing nothing to protect their oil assets in Libya, confiscated by Gaddafi. So they started their move against America, alpha-silver bug style. In 1973 Hunts began buying all the silver they could. And, instead of just speculating futures contracts, they actually took delivery. Initial price was $1.5/oz. Silver was shipped to Switzerland in secretive and costly operations and stored in vaults (brothers feared confiscations – remember, private citizens were still prohibited from owning gold in the US). The following events are quite vivid and include the efforts to create a cartel similar to OPEC, talks with Iran and Saudi monarchs, pump and dump publicity and large scale purchases of miners. But we will spare the details, except one: Hunts even tried to corner the soy market at the same time. Reminds you how WSB slv gang quickly switched to corn gang. But the soy scheme didn't fly and they focused on silver only. Their efforts pumped the price to almost $50/oz by early 1980. At some point Hunts controlled around 230 million oz of silver and the majority of what was traded. Hunt brothers laughing at your pump&dump effort Of course, when you are such a smart ass, you become a target. Chicago exchange officials became very concerned citizens by 1979. They started issuing numerous regulations limiting the amount of market share one can accumulate in one hands. As all American concerned citizens, they had financial incentive to do so: Hunts managed to prove that Chicago exchange board members had short positions against silver. Finally, CFTC (Commodity Futures Trading Commission) issued a ruling that basically forced Hunts to liquidate part of their portfolio by February 1980. This sent silver prices down dramatically and brothers started to get margin calls which they could not cover. And so their story ended with bankruptcies and heavy fines for the family. Shortly after, Reagan and Volcker raised interest rates and silver price never recovered to $50/oz ever since. We skip to the year 2008. Global financial crisis is in full swing. Bear Stearns is royally fucked, as due to all bears. Before the music was over, they mastered paper speculation of futures contracts like no one else. Bear Stearns accumulated world biggest naked short position on silver. What could go wrong? Stonks go up, silver goes down. Until it reversed and silver skyrocketed from $11 to $21. This became one of the margin calls to screw Bear Stearns. JP Morgan is asked by the FED and co. to buy out BS and to save the entire market. Since BS's shorts are now deeply down - JPM gets the whole bank with pennies on a dollar. But the problem is that JPM themselves have massive naked short position on silver. Combined with BS it will exceed anything permitted by the CFTC. Since Obama administration was in a rush, they push CFTC to grant JPM basically a carte blanche to accumulate any position over the limit for a period of time. Period of time comes due and turns out that JPM not only didn’t trim the shorts significantly – they even bought more shorts at some point. Even with all the fines, it went very much their way, because in 2009 silver dropped. So they pocketed hundreds of millions of dollars. But come 2011 and silver spiked again, dramatically. JPM, now bleeding cash on shorts, could close short positions, like any of us would do, right? Nope, fuckyall says JPM and starts hedging short futures positions with… physical silver. 'But wouldn’t that be even more control over the commodity?' - you might ask. See, nothing in the rules of CFTC says you can’t do that, because to help cronies speculate with paper futures contracts, made of thin air, CFTC basically started treating physical silver and futures as two different instruments (it’s, actually, even more complicated than that: google difference between physical, eligible, registered and so on). In the next 9 years JPM becomes the world biggest holder of both short contracts and physical silver. The later they 'loaned' to SLV trust, of which they are custodian. This way upkeep of physical silver, which otherwise would be a liability for hedging, becomes an asset, because we, retards, who own SLV pay the maintenance. People are often confused here, because SLV is issued by Black Rock, not JPM. Well, there is a difference between being an operator of a financial instrument and being a custodian providing backing. Now, to confuse you even more – JPM is one of the major holders of Black Rock itself with 1.6% or sth like that. By estimates of Theodore Butler, JPM acquired 900 million oz of physical silver since 2011. That’s 4 times more than what Hunts owned. Just shows you, that banks can get a pass with something that even the richest individuals can not. And you have to give it to JPM - their play was very clever. Instead of risking it all on a margin call, they make money on every turn. As of 2020, JPM still holds both shitton of physical silver and short COMEX contracts. You can call this the most epic straddle of all time. With such mass they can swing prices in any directions and profit from this on any given day. Latest example you’ve seen on the August 11th. Why am I bothering your poor gambling soul with this wall of text, you might ask? Market makers manipulate the market as they please, what’s new about that? Well, here we come to the conclusions and a strategy. How can a small retard replicate what the big boys are doing? Conclusions:
There will not be a linear up or down with silver and the swings might be dramatic. The reason being not only the sentiment of investors, but the ease of manipulation that is eligible to big players.
If we believe that speculation will throw the price of silver in all directions – it is unwise to go only long or short on silver, especially on a short term;
What shall we do? a) Only long expiration dates and calls; no weekly expiration, not even monthly. Ideally – at least half year options; b) Go long on certain silver stocks. Maybe I’ll do a write up on good silver stocks to buy; c) Sell covered calls on long positions; d) Buy 1-3 month puts on your long positions as a hedge; Now, day trade with those positions: on red days sell your puts and buy back covered calls. On green days – reload puts and sell calls. Repeat until lambo. P. S.: I gathered these facts from the open sources, since these events were of interest to me. Some facts are intentionally oversimplified, google for more details, there are good reads. And feel free to correct me if you know contradictory facts. P. P. S.: JPM, plz don’t whack me.
What if I told you OPERATION 10 BAGS is actually OPERATION 20 BAGS - Courtesy of Albertsons (ACI)
Edit 1: I wouldn't rush to get in immediately with how poor SPY/QQQ look at open. Waiting until later in the day when they've maybe bottomed out is likely a better move Edit 2: Broader market looks to have stabilized. Congrats if you bought the dip. But now is time to get balls deep - I'm in the process of tripling my position u/trumpdiego 's post from a few days ago on ACI inspired me to do some research of my own, and it seems operation 10 bags may actually be a 20 bagger Post for reference:https://new.reddit.com/wallstreetbets/comments/huq9eq/operation\10_bags_brought_to_you_by_albertsons/) TL;DR: ACI is a leader in multiple sub-sectors that the market has been pumping lately. Their stock hasn’t increased as much as competitors in the last month, and it is cheaper than all of them on a P/E basis. Grocery prices have been rising faster than ever before. ACI is driving customers to their stores at a rate higher than anyone else in the industry. Online grocery sales were likely close to a record $19B in Q2. ACI’s online grocery sales were up +243% in April, and close to +220% this last quarter. Both of those last two facts suggest over $36B in quarterly revenue, compared to a street consensus of ~$23B. TL;DR for the TL;DR: Albertons Companies (ACI) 8/21 $20C’s are going to the moon when they report earnings before market open on Monday 7/27, but potentially sooner if any other online grocers report what you’re about to read below. And I'll show you exactly why referencing the data that the big bois use to evaluate investments. Primer for the type of autist who likes to know what he’s YOLOing options on: ACI is a food and drug retailer that offers grocery products, general merchandise, health and beauty care products, pharmacy, and fuel in the United States, with local presence and national scale. They also own Safeway, Tom Thumb , Acme, Shaw’s, Star Market, United Supermarkets, Vons, Jewel-Osco, Randalls, Market Street, Pavilions, Carrs, and Haggen as well as meal kit company Plated based in New York City. Additionally, ACI is the #1 or #2 grocer by market share in 68% of the 121 MSAs (Metropolitan Statistical Area) they operate in. And here’s the good part: ACI is a leader in the online grocery shopping/delivery marketplace. They offer home delivery services in ~65% of their 2,200 stores, and have partnerships with Instacart, Uber Eats, and Grubhub to facilitate 1-2 hour delivery in 90% of their locations. Guess whose stock is up 75% this quarter? Grubhub. Think the market likes food delivery? Besides online grocery shopping, what else is surging due to COVID-19? Meal kits. And guess what, ACI is one of the only grocers with a meal kit offering. Demand is surging so much that Blue Apron (APRN) decided to go public on June 24th, and is already up 22.47% since then. Think the market likes meal kits? Now back to your regularly scheduled programming: Before I get into the industry and ACI specific numbers that make me TSLA levels of bullish on ACI – let me tell you what the market thinks. Q: “Why do I care what the market thinks? I’m smarter than it!” – Probably most of you. A: “Because it doesn’t matter how right you are if the market doesn’t agree, especially when YOLOing short term options. Market Trends: Over the last 30 days, ACI shares are up a meager 3.43%, currently trading at a 7.3x P/E multiple of consensus 2020 earnings. Check out what the most comparable companies to ACI have done over the last 30 days, and associated 2020 expected earnings P/E they are trading at: Grocery Outlet (GO): +11.30% (39.7x) Kroger (KR): +9.16% (11.9x) Sprouts Farmers Market (SFM): +15.71% (15.1x) So what does that tell you? The market loves grocery stores right now in corona times (no shit), and ACI is relatively the cheapest stock out of all of them. The performance of Grubhub (+75% in Q2), Blue Apron (+22.47% since 6/24/20 IPO), and literally every single online retailer tell you the market’s opinion on online shopping, food delivery, and meal kits as well. If ACI were to trade at KR’s 11.9x P/E, that would make the stock worth $26.15, +63% from close today. Wonder what that means for option tendies… Oh what’s that? You’re asking why ACI could start trading on par with KR at a 11.9x P/E? Great question! Let me get into why this sexy boi will print: Starting from a macro perspective, CPI: Food at Home (NSA) is the consumer price metric that tracks inflation in food prices as grocery stores and related establishments. After deflating -.16% in 2018 and inflating just .03% in 2019, CPI: Food at Home (NSA) is +4.74% thus far in 2020. Why is this? Food prices are historically correlated with Disposable Personal Income, which also increased at its highest rate ever through Q2’2020. So as long as big daddy Powell has the money printer going brrrrrr, Albertsons will be making more and more money on each sale. Now, this food price inflation does benefit every grocer. However, let’s take a look at the ID Sales (which is the grocer equivalent of same-store-sales) trends recently for ACI and its main competitors that I was able to find data on:
So through at least April, ACI has been in a class of their own when it comes to generating repeated traffic at their locations. Courtesy of the fine people at Morgan Stanley, we also know ID Sales were +16% in June (so you can deduce they were in the +17% to +20% range in May), and still up “double-digit percentage” thus far in July. So far we’re established that ACI is selling their products for the most they ever have, and generating more traffic at identical stores than all their competitors. This data is affirmed by JP Morgan’s foot traffic index which shows ACI taking customer from Kroger. But wait – here’s the sexy part: Time to forecast ACI’s online sales this quarter using published industry data: According to new research released 7/6/20 by Brick Meets Click and Mercatus, U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May. Let’s do some quick maths and deduce that online grocery sales were $6.61B in May. Now let’s be super conservative and say May was a 20% increase over April (realistically I would guess closer to +5-10%), and that gives us $5.51B in online grocery sales in April. This means we likely had ~$19B in online grocery sales in Q2. As ACI represented 1.60% of the online grocery marketplace in 2019, that would imply $304M in online revenue this past quarter. This is very conservative though, as even after assuming a 20% drop in April relative to May, we also assumed their market share stayed at 1.60%. Remember those nice people at JPM who’s foot traffic tracker told us that ACI was stealing customers from KR? Well they also estimate ACI’s 1.60% market share in online groceries to reach 2.50%-2.80% in 2025, with a CAGR (cumulative average growth rate) of ~9% in market share per year. That means their 1.60% market share is likely 1.744% now. Take 1.744% of $19B, and:
!!!!That means $331.36M of online sales!!!!
Remember this number Now that we have an estimate for ACI’s online sales based on the broader industry trends, lets come up with an estimate using only company data: On their last earnings call, management noted that online sales had grown 83% in 2018, 39% in 2019, +278% in the first 12-weeks of 2020, and +243% in April (Remember this number too!). Can you hear your Robinhood account balance going brrrrr? If not, the oven is about to get turned up faster Jerome can print a milli: Math time! · ACI did ~$265.4M in online sales in 2018. Source: https://www.digitalcommerce360.com/2019/11/04/albertsons-embraces-omnichannel-retail/#:~:text=Albertsons%20does%20not%20break%20out,%2461%20billion%20in%20total%20revenue. · That means they did ~370M in online sales in 2019. · ACI had $62.455B in 2019 revenue. · Which means 0.59% of their sales were online. · Working backwards off their Q2’19 revenue of $18.738B, we arrive at $111M in online revenue. · Let’s be conservative and assume some sequential decline from their April online sales growth (the second number you should have remembered) and put Q2 online sales at +220%.
!!!!That means $355M in online sales!!!!
Remember that first number I told you to keep in mind? $331.36M. Considering entirely different data sets were used to find each number, it may not be so crazy to think it could be a pretty accurate forecast of the online sales when they report earnings. But since you’re so smart I know you’re on the edge of your seat wondering what that would mean for their total revenue Let’s take the average of both forecasts, and use $343.18M as our forecast for online revenue. Given online sales were 0.59% of 2019 revenue, it would imply $58.166B in revenue this quarter, compared to the $22.78B street consensus estimate. Admittedly, online sales staying at .59% is unrealistic due to how many consumers would shop online instead of in the store. Here’s some more math to deduce the new percentage: · In 2018, 0.44% of their sales were online · When online sales rose 39% in 2019, the proportion went up to 0.59% · So a 39% increase in online sales led to a 0.15% greater contribution of online sales to total revenue · Therefore a 220% increase would mean a 0.345% increase in proportion of online sales, putting them at .935% of total sales
!!!!!That gives us $36.704B in revenue for this past quarter vs a consensus of just under $22.78B. A beat by over 60%!!!!!
If you’re one of the rare autists to realize that revenue is only one half of the earnings equation, and your costs are the equally as important second half: Let’s go back to our friends at JPM, in a recent research note, after mentioning the foot traffic ACI was taking from KR, they also noted that ACI has superior gross margins to KR, as their stores are strategically located further from aggressively low priced competitors such as Aldi and WalMart. Additionally, they praised ACI’s recent cost savings initiatives that have been underway for some time now, and believe they would lead to some of the best margins in the industry. So you’re telling me ACI is going to make way more money than anyone expects this quarter, while also having lower costs? That must mean call options are crazy expensive, right?? Wrong. The aforementioned option is trading at just $0.50. That means after earnings when the stock rips to $30, they could be worth $11, does a 2,100% return sound good to you too? And for you especially literate autists, the IV is only 91.61%.
ACI 8/21 $20C
Let’s ride this fucker to the moon
Happy to respond to any questions/comments on sources for some of the data I presented or anything else your autistic brain comes up with regarding ACI
Long Thesis - Progyny - 100% upside - High-growth, profitable company is the only differentiated provider in a large, growing, and underserved market. PGNY’s high-touch, seamless offering helps them stand out against large insurance carriers.
Link to my research report on PGNY Summary High-growth, profitable company is the only differentiated provider in a large, growing, and underserved market. PGNY’s high-touch, seamless offering helps them stand out against large insurance carriers. Covid-19 has shown the importance of benefits for employees and will continue to be the key differentiator for those thinking of changing jobs. According to RMANJ (Reproductive Medicine Associates of New Jersey), 68% of people would switch jobs for fertility benefits. For employers, Progyny reduces costs by including the latest cutting-edge technology in one packaged price, thereby lowering the risk of multiples and increasing the likelihood of pregnancy, keeping employees happy with an integrated, data-driven, concierge service partnering with a selective group of fertility doctors. Upside potential is 2x current price in the next 18 months. Overview Progyny Inc. (Nasdaq: PGNY), “PGNY” or the “Company”, based in New York, NY, is the leading independent fertility and family building benefits manager. Progyny serves as a value-add benefits manager sold to employers who want to improve their benefits coverage and retain and attract the best employees. Progyny offers a comprehensive solution and is truly disrupting the fertility industry. There is no standard fertility cycle, but the below is a good approximation of possible workflows: https://preview.redd.it/7aip8pna9zi51.png?width=941&format=png&auto=webp&s=7ef868a67eae10534bac254ab58fb3d4295aef37
Patient is referred to fertility center for evaluation for Assisted Reproductive Technology (“ART”) procedures, including in-vitro fertilization (“IVF “) and intrauterine insemination (“IUI”). Both can be aided by pharmaceuticals that stimulate egg production in the female patient. IVF involves the fertilization of the egg and sperm in the lab, while IUI is direct injection of the sperm sample into the uterus. Often, IUI is done first as it is less expensive. As success rates of IVF have increased, IUI utilization will likely fall.
Sperm washing is the separation of the sperm from the semen sample for embryo creation, and it enhances the freezing capacity of the sperm. Typically, a wash solution is added to the sample and then a centrifuge is used to undergo separation. This is done in both IUI and IVF.
Some OB/GYN platforms are pursuing vertical integration and offering fertility services directly. The OB would need to be credentialed at the lab / procedure center.
Specialty pharmacy arranges delivery of temperature sensitive Rx. Drug regimens include ovarian stimulation to increase the number of eggs or hormone manipulation to better time fertility cycles, among others.
Oocyte retrieval / aspiration is done under deep-sedation anesthesia in a procedure room, typically in the attached IVF lab. Transfer cycle implantation is done using ultrasound guidance without anesthesia. (Anecdotally, we have been told that only REIs can perform an egg retrieval. We have not been able to validate this).
Many clinics house frozen embryos on-site, while some clinics contract with 3rd parties to manage the process. During an IVF cycle, embryos are created from all available eggs. Single-embryo transfer (“SET”) is becoming the norm, which means that multiple embryos are then cryopreserved to use in the future. A fertility preservation cycle ends here with a female storing eggs for long-term usage (e.g. a woman in her young 20s deciding to freeze her eggs for starting a family later).
Common nomenclature refers to an IVF cycle or an IVF cycle with Intracytoplasmic sperm injection (“ICSI”). From a technical perspective, ICSI and IVF are different forms of embryo fertilization within an ART cycle.
ART clinics are frequently offering ancillary services such as embryo / egg adoption or surrogacy services. More frequently, there are independent companies that help with the adoption process and finding surrogates.
ART procedures are broken into two different types of cycles: a banking cycle is the process by which eggs are gathered, embryos are created and then transferred to cryopreservation. A transfer cycle is typically the transfer of a thawed embryo to the female for potential pregnancy. If a pregnancy does not occur, another transfer cycle ensues. Many REIs are moving towards a banking cycle, freezing all embryos, then transfer cycles until embryos are exhausted or a birth occurs. If a birth occurs with the first embryo, patients can keep their embryos for future pregnancy attempts, donate the embryos to a donation center, or request the destruction of the embryos.
The Company started as Auxogen Biosciences, an egg-freezing provider before changing business models to focus on providing a full-range of fertility benefits. In 2016, they launched with their first 5 employer clients and 110,000 members. As of June 30, 2020, the Company provided benefits to 134 employers and ~2.2 million members, year over year growth of 63%. 134 employers is less than 2% of the total addressable market of “approximately 8,000 self-insured employers in the United States (excluding quasi-governmental entities, such as universities and school systems, and labor unions) who have a minimum of 1,000 employees and represent approximately 69 million potential covered lives in total. Our current member base of 2.1 million represents only 3% of our total market opportunity.” The utilization rate for all Progyny members was less than 1% in 2019, offering significant leverageable upside as the topic of fertility becomes less taboo.
Fertility has historically been a process fraught one-sided knowledge, even more so than the typical physician procedure. Despite the increased availability of information on the internet, women who undergo fertility treatments have often described the experience as “byzantine” and “chaotic”. Outdated treatment models without the latest technology (or the latest tech offered as expensive a la carte options) continue to be the norm at traditional insurance providers as well as clinics that do not accept insurance. Progyny’s differentiated approach, including a high-touch concierge level of service for patients and data-driven decision making at the clinical level, has led to an NPS of 72 for fertility benefits and 80 for the integrated, optional pharmacy benefit. Typically, fertility benefits offered by large insurance carriers are add-ons to existing coverage subject to a lifetime maximum while simultaneously requiring physicians to try IUI 3 – 6 times before authorizing IVF. The success rate of IUI, also known as artificial insemination, is typically less than 10%, even when performed with medication. As mentioned in Progyny’s IPO “A patient with mandated fertility step therapy protocol may be required to undergo three to six cycles of IUI, which has an average success rate range of 5% to 15%, takes place over three to six months and can cost up to $4,000 per cycle (or an aggregate of approximately $12,000 to $24,000), according to FertilityIQ. Multiple rounds of mandated IUI is likely to exhaust the patient's lifetime dollar maximum fertility benefits and waste valuable time before more effective IVF treatment can be begun.” Success Rates for IVF IVF success rates vary greatly by age but were 49% on average for women younger than 35. The graph below shows success rates by all clinics by age group for those that did at least 10 cycles in the specific age group. As an example, for those in the ages 35 – 37, out of 456 available clinics, 425 performed at least 10 cycles with a median success rate of 39.7%. https://preview.redd.it/d2l5dtw89zi51.png?width=4990&format=png&auto=webp&s=5ff2ab9948b94419558a27ac861d4e498dce6713 Progyny’s Smart Cycle is the proprietary method the company has chosen as a “currency” for fertility benefits. As opposed to a traditional fee-for-service model with step-up methods, employers may choose to provide between 2 and unlimited Smart Cycles to employees. This enables employees to choose the provider’s best method. Included in the Smart Cycle, and another indicator of the Company’s forward-thinking methodology, are treatment options that deliver better outcomes (PGS, ICSI, multiple embryo freezing with future implantations). https://preview.redd.it/np577a389zi51.png?width=734&format=png&auto=webp&s=c061a2b24c8515890ba204479b4677893dabf755 As detailed in the chart above, a patient could undergo an IVF cycle that freezes all embryos (3/4 of a Smart Cycle), then transfer 5 frozen embryos (1/4 cycle each; each transfer would occur at peak ovulation, which would take at least 5 months) and use only 2 Smart Cycles. Alternatively, if the patient froze all embryos and got pregnant on the first embryo transfer, they would only use one cycle. Before advances in vitrification (freezing), patients could not be sure that an embryo created in the lab and frozen for later use would be viable, so using only one embryo at a time seemed wasteful. Now, as freezing technology has advanced, undergoing one pharmaceutical regime, one oocyte collection procedure, creating as many embryos as possible, and then transferring one embryo back into the uterus while freezing the rest provides the highest ROI. If the first transferred embryo fails to implant or otherwise does not lead to a baby, the patient can simply thaw the next embryo and try implantation again next month. Included in each Smart Cycle is pre-implantation genetic sequencing (“PGS”) on all available embryos and intracytoplasmic sperm injection (“ICSI”). PGS uses next-generation sequencing technology to determine the viability and sex of the embryo while ICSI is a process whereby a sperm is directly inserted into the egg to start fertilization, rather than allowing the sperm to penetrate the egg naturally. ICSI has a slightly higher rate of successful fertilization (as opposed to simply leaving the egg and sperm in the petri dish). Because Progyny’s experience is denominated in cycles of care, not simply dollars, patients and doctors can focus on what procedures offer the best return. 30% of the Company’s existing network of doctors do not accept insurance of any kind, other than Progyny, which speaks to the value that is provided to doctors and employers. For patients not looking to get pregnant, Progyny offers egg freezing as well. Progyny started as an egg-freezing manager, which allows a woman to preserve her fertility and manage her biological clock. As mentioned previously, pregnancy outcomes vary significantly and align closely with the age of the egg. Egg freezing is designed to allow a woman to save her younger eggs until she is ready to start a family. From an employer’s perspective, keeping younger women in the work force for longer is a cost savings. Vitrification technology has improved significantly since “Freeze your eggs, Free Your Career” was the headline on Bloomberg Businesweek in 2014, but we still don’t yet know the pregnancy rates for women who froze their eggs 5 years ago, but early results are promising and on par with IVF rates for women of similar ages now. From a female perspective, the egg freezing process is not an easy one. The patient is still required to inject themselves with stimulation drugs and the egg retrieval process is the same as in the IVF process (under sedation). The same number of days out of work are required. Using the SmartCycle benefit above as an example, the egg freezing process would require ½ of a Smart Cycle. The annual payment required to the clinic is typically included in the benefits package but may require out-of-pocket expenses covered by the employee. Contrary to popular belief, IVF pregnancies do not have a higher rate of multiples (twins, triplets, etc.), rather in order to reduce out of pocket costs, REIs have transferred multiple embryos to the patient, in the hopes of achieving a pregnancy. If you have struggled for years to get pregnant, and the doctor is suggesting that transferring 3 embryos at once is your best chance at success, you are unlikely to complain, nor are you likely to selectively eliminate an implanted embryo because you now have twins. There are several factors that are making it more likely / acceptable to transfer one embryo at a time, enabling Progyny’s success. https://preview.redd.it/48vk9gc69zi51.png?width=953&format=png&auto=webp&s=2c75a2771a1dd9a079074331b317451f076725ca From the Company: “According to a study published in the American Journal of Obstetrics & Gynecology that analyzed the total costs of care over 400,000 deliveries between 2005 and 2010, as adjusted for inflation, the maternity and perinatal healthcare costs attributable to a set of twins are approximately $150,000 on average, more than four times the comparable costs attributable to singleton births of approximately $35,000, and often exceed this average. In the case of triplets, the costs escalate significantly and average $560,000, sometimes extending upwards of $1.0 million.” “Progyny's selective network of high-quality fertility specialists consistently demonstrate a strong adherence to best practices with a substantially higher single embryo transfer rate. As a result, our members experience significantly fewer pregnancies with multiples (e.g., twins or triplets). Multiples are associated with a higher probability of adverse medical conditions for the mother and babies, and as a byproduct, significantly escalate the costs for employers. Our IVF multiples rate is 3.6% compared to the national average of 16.1%. A lower multiples rate is the primary means to achieving lower high-risk maternity and NICU expenses for our clients.” An educated and supported patient leads to better outcomes. Each patient gets a patient care advocate who interacts with a patient, on average, 15x during their usage of fertility benefits - before treatment, during treatment and post-pregnancy. The Company provides phone-based clinical education and support seven days a week and the Company’s proprietary “UnPack It” call allows patients to speak to a licensed pharmacy clinician who describes the medications included in the package (which contains an average of 20 items per cycle), provides instruction on proper medication administration, and ensures that cycles start on time. The Company’s single medication authorization and delivery led to no missed or delayed cycles in 2018. Previous conference calls have made note of the fact that the Company would like to purchase their own specialty pharmacy and own every aspect of that interaction, which should provide a lift to gross margins. This would allow PGNY to manage both the medication and the treatment, leading to decreased cost of fertility drugs. Under larger carrier programs, carriers manage access to treatment, but PBM manages access to medications, which can lead to a delay in cycle commencement. Progyny Rx can only be added to the Progyny fertility benefits solution (not offered without subscription to base fertility benefits) and offers patients a potentially lower cost fertility drug benefit, while streamlining what is often a frustrating part of the consumer experience. The Progyny Rx solution reduces dispensing and delivery times and eliminates the possibility that a cycle does not start on time due to a specialty pharmacy not delivering medication. Progyny bills employers for fertility medication as it is dispensed in accordance with the individual Smart Cycle contract. Progyny Rx was introduced in 2018 and represented only 5% of total revenue in 2018. By June 30, 2020, Progyny Rx represented 28% of total revenue and increased 15% y/y. The growth rate should slow and move more in line with the fertility benefits solution as the existing customer base adds it to their package. Progyny Rx can save employers 5% on spend for typical carrier fertility benefits or 21% of the drug spend. Prior authorization is not required, and the pre-screened network of specialty pharmacies can deliver within 48 hours. Additionally, PGNY has 1-year contracts, as opposed to 3 – 5 years like standard PBMs, but with guaranteed minimums, allowing them to purchase at discounts and pass part of the savings on to employers – another reason the attachment rate is so high. Large, Underpenetrated Addressable Market Total cycle counts are increasing (below, in 000s), including both freezing cycles and intended-pregnancy cycles. Acceleration in cycle volume is likely driven by a declining birth rate as women wait later in life to start a family, resulting in reduced fertility, as well as the number of non-traditional (LGBT and single parents). Conservatively, we believe cycles can double in the next 8 years, a 7% CAGR. https://preview.redd.it/y6y7jb559zi51.png?width=943&format=png&auto=webp&s=6cc5cdde7c6583d8e943d2675ad3b6ae85f818de Progyny believes its addressable market is the $6.7B spent on infertility treatments in 2017, but these numbers could easily understate the available market and potential patients as over 50% of people in the US who are diagnosed as infertile do not seek treatment. Additionally, according to the Company, 35% of its covered universe did not previously have fertility benefits in place previously, meaning there is a growing population of people who are now considering their fertility options. According to Willis Towers, Watson, ~ 55% of employers offered fertility benefits in 2018. A quick review of CDC stats and FertilityIQ shows a significant disparity in outcomes and emotions for those who are seeking treatment. While technology in the embryo lab is improving rapidly and success rates between clinics should be converging, there continue to be significant outliers. Clinics that follow what are now generally accepted procedures (follicle stimulating hormones, a 5-day incubation period and PGS to determine embryo viability) have seen success rates of at least 40%. There continue to be several providers that offer a mini-IVF cycle or natural IVF cycle. Designed to appeal to cost conscious cash payors, the on average $5,000 costs, is simply IVF without prescription drugs or any add-ons such as PGS. However, the success rates are on par with IUI and there is an abundance of patients over 40 using the service, where the success rates are already low. Additionally, success stories at these clinics frequently align with what is perceived as the worst parts of the process: One clinic offering a natural cycle IVF has a rating at FertilityIQ of ~8.0 with 60% of people strongly recommending it. This clinic performed 2,000 cycles in 2018 (the most recently available data from the CDC), making it one of the top 10 most active fertility center in the US. Their success rate for women under 35 was 23%, as opposed to the national average of 50% for all clinics. For women over 43, the average success rate for the most active 40 clinics in this demographic was 5.0% this clinics success rate was 0.4%. The lower success rate is likely due to the lack of pre-cycle drugs and PGS, but the success rate and the average rating is hard to understand. Part of this could be to the customer service provided by the clinic, or the perceived benefit of having to go into the office less often for check-ups when not doing a medication driven cycle. . Reviews from other clinics with high average customer ratings, but low success rates include: - “start of a journey that consisted of multiple IUI’s with numerous medications, but they were not successful.” - After an IVF retrieval, the couple had two viable embryos, both were transferred the next month” - “The couple started with a series of IUI treatments, three in total that were not successful.” - “After a fresh transfer of two embryos, again another unsuccessful cycle”. - “He suggested transferring 2 due to higher implantation rates, but there is increased rate of twins “ Valuation https://preview.redd.it/tqcykjm39zi51.png?width=6358&format=png&auto=webp&s=b63fd53c054ac5cbacaf9ccc734c7e73f0ea3c32 Progyny’s comps have typically been other high-growth companies that went public in the last two years: 1Life Healthcare (ONEM), Accolade (ACCD), Health Catalyst (HCAT), Health Equity (HQY), Livongo (LVGO), Phreesia (PHR), as well as Teladoc (TDOC). Despite revenue growth that outpaces these companies, PGNY’s revenue multiple of 4.4x 2021E revenue is a 40% discount to the peer group median. PNGY’s lower gross margin is likely limiting the multiple. However, Progyny is the one of the few profitable companies in this group and the only one with realistic EBTIDA margins. SG&A leverage is the most likely driver of increased EBITDA and can be achieved by utilizing data to improve clinical outcomes in the future, but primarily by increased productive of the sales reps, including larger employer wins and larger employee utilization. Perhaps the best direct comp is Bright Horizons (BFAM). BFAM offers childcare as a healthcare benefit where employees can use pre-tax dollars to pay for childcare. BFAM offers both onsite childcare centers built to the employer’s specification (owned by the employer and operated by BFAM), as well as shared-site locations that are open to the public and back-up sitter services. Currently, PGNY is trading at 4.4x 2021E Revenue, in-line with BFAM’s 4.3x multiple. I would argue that PGNY should trade significantly higher given the asset-lite business model and higher ROIC. Recent Results Post Covid-19, fertility treatments came back faster than anticipated, combined with disciplined operations, PGNY drove revenue and EBITDA above 2Q2020 consensus estimates. Utilization is still below historical levels, but management’s visibility led to excellent FY21 revenue estimates (consensus is around $555M, a y/y increase of 62%. 2Q2020 revenue increased 15% to $64.6M, and EBITDA increased 18% to $6.5M, primarily driven by SBC as the 15% revenue was not enough to leverage the additional G&A people hired in the last 18 months. The end of the quarter as fertility docs opened their offices back up for remote visits saw better operating margin. Despite the shutdown in fertility clinics during COVID-19, Progyny was able to successfully add several clients. “The significant majority of the clinics in our network chose to adhere to ASRMs guidelines, and our volume of fertility treatments and dispensing of the related medications declined significantly over the latter part of the quarter. . . Through the end of March and into the first half of April, we saw significant reductions in the utilization of the benefit by our members down to as low as 15%, when compared to the early part of Q1 were 15% of what we consider to be normal levels. In April, the New York Department of Health declared that fertility is an essential health service and stated that clinics have the authority to treat their patients and perform procedures during the pandemic. Then on April 24, ASRM updated its guidelines which were reaffirmed on May 11, advising that practices could reopen for all procedures so long as it could be done in a measured way that is safe for patients and staff.” Revenue increased by $33.8 million, 72% in 1Q2020. This increase is primarily due to a $19.0 million, or 47% increase, in revenue from fertility benefits. Additionally, the Company experienced a $14.8 million or 216% increase in revenue from specialty pharmacy. Revenue growth was due to the increase in the number of clients and covered lives. Progyny Rx revenue growth outpaced the fertility benefits revenue since Progyny Rx went live with only a select number of clients on January 1, 2018 and has continued to add both new and existing fertility benefit solution clients since its initial launch. Competition The only true competition is the large insurance companies, but, as mentioned previously, they are not delivering care the same way. WINFertility is the largest manager of fertility insurance benefits on behalf of Anthem, Aetna and Cigna and are not directly involved in the delivery of care. Carrot is a Silicon Valley startup that recently raised $24M in a Series B with several brand name customers (StitchFix, Slack) where they focus on negotiating discounts at fertility clinics for their customers, who then use after-tax dollars from their employers. Risks to Thesis Though there is risk a large carrier may switch to a model similar to Progyny’s, I believe it is unlikely given the established relationships with REIs at the clinic level, the difficulty of managing a more selective network of providers, and the lack of interest shown previously in eliminating the IUI. It is more likely a carrier would acquire Progyny first.
The current turmoil in Belarus and its impact to Belarusian-Russian bilateral relations: A few points of consideration
Aleksandr Lukashenko was purportedly re-elected in Belarus's most recent elections. The current turmoil resulted. As is fairly common in certain Eastern European elections, the 80% margin by which he claimed victory gives rise to obvious doubts as to legitimacy. Mass protests and demonstrations resulted. Lukashenko has 'won' past elections by similar margins, at least 85-90%+. Lukashenko has arrested most of his political opponents, and jailed or exiled others. Journalists which report on the extent of his corruption (of which there is no shortage) tend to find themselves in prison. His title as Europe's so called 'last dictator' is well deserved. The Global Response to Lukashenko's Purported Re-Election The global response to Lukashenko's purported re-election has been largely as would be anticipated. Western countries -- and specifically the United States, through Mike Pompeo -- have expressed their reservations. The results are self evidently suspect. Despite this, Russia and China both endorsed the results and both countries have officially signaled their endorsement of the results. Notably, Russia historically has been Belarus's strongest and closest ally, the animosity between Putin and Lukashenko in the recent years notwithstanding. Uncertainty from Russia Despite the official endorsement from Putin, uncertainty remains as to the future of Russian and Belarusian bilateral relations. Several prominent Russians, including those inside Putin's inner circle, have signaled that the Lukashenko's backing from Moscow is not guaranteed. Several developments this year contextualize the current status quo. First, negotiations for discounted oil broke down in totality earlier in February 2020. Russia not only suspended deliveries to Belarus, but offered future sales at "market rates" on a purely commercial basis. Second, the oil negotiations broke down after Putin's proposal to merge the two countries was flatly rejected. Natural gas sales were still discounted somewhat, but the lack of a market rate discount for oil sales to Belarus was a significant blow to the integrity of their relationship. The basic idea here is that when global oil prices were high, Russia could with very little significant loss discount its sales to Belarus to gain favor and geopolitical influence. When oil prices bottomed out -- as they have in recent years -- the costs of that deal to Russia rose, so Russia sought to re-negotiate. In the past, Lukashenko made few concessions (and in fact used the potential of closer ties with the West to extract that concession from Russia, consistent with his historical maneuvering of the animosity between Russia and NATO to his distinct advantage). At the very least, Russia wanted closer economic (and by implication, political) integration; potentially, integration to the level of merging the two countries once Lukashenko left office. Lukashenko predictably rebuked any such proposal. Shrinking Russian Sphere of Influence From the outside looking in, it may not make sense why Russia would even want to integrate with Belarus. All doubt however is resolved in consideration of how the other near and distant dominoes seem to be lining up -- each of them to fall outside the Russian sphere of influence. Consider Kazakhstan, for example. Nazarbayev (Kazakh president) has made deliberate efforts to broaden its economic and cultural reach outside the sphere of Russian influence, even to the point that he changed the Kazakh alphabet from Cyrillic to Latin in 2017. The idea was to draw a line in the sand relative to the scope and extent of Russian influence in Central Asia in general and Kazakhstan in particular. The fact that Russia hemorrhaged allied states following the USSR's collapse is a matter of historical record. Thirteen Warsaw Pact countries have joined NATO. So, when Georgia endeavored to join the EU in 2007, Putin invaded Abkhazia and South Ossetia -- both of which remain allegedly "disputed" territories to this day. A highly deceptive analysis concluded Georgia was to blame; but the whole reason Russia invaded in the first place was because Georgia was actively seeking NATO membership -- of course, to prevent exactly such an invasion. In reality, Russia invaded a sovereign country for the purpose of preventing it from joining NATO. Putin's response shows that in Russia's analysis, Georgia is better as a fragmented state than a NATO ally or EU member. A similar pattern played out in Ukraine. As I have discussed before, when Ukraine sought closer economic and political integration with Western Europe and the United States, that was met with Russian meddling in Ukraine's domestic politics, even to the point of installing Yanukovych as Russia's puppet Ukrainian president. Thereafter, in the face of maidan, Putin invaded eastern Ukraine and seized Crimea. In the example of Ukraine as in Georgia, the outcome shows that Russia would prefer that Ukraine be a failed or fragmented state than a NATO ally or EU member. Recall that the goal here was for Putin to create an economic alliance in at least Eastern Europe and Central Asia to rival the EU, and ideally as an insurance policy against further sanctions. The first step in that process would be developing individualized economic integration projects among each of the former Soviet bloc states. Instead, Putin lost Kazakhstan, Georgia, and Ukraine in the span of less than a decade. Ukraine was the first such integration project -- and that resulted in then-president of Ukraine, Viktor Yanukovych's absconding Ukraine for Russia in disgrace. So is Belarus next? Perhaps. It's a question worth asking; especially considering what "being next" could mean. In a first set of possible worlds, Lukashenko is out because of his own decisions, or because he is forced out (potentially by the protesters, Russia or both). In 2018-2019, when Russian-Belarusian bilateral relations were at their worst, it's conceivable that Putin might have tried something like he achieved in Ukraine -- but highly unlikely. It isn't obvious that Putin would be unwilling invade, given in particular the fact that he invaded Georgia and Ukraine under somewhat similar circumstances and that at this moment Lukashenko is very weak. Lukashenko has never faced mass protests/demonstrations of this caliber before. Putin has, and he survived them, but the public's dissatisfaction with Lukashenko's "leadership" is amplified by the uncertainty surrounding the coronavirus, the consequential economic fallout attributable to the world's response to the coronavirus, and an increasingly ravenous lion to the east in its once-closer ally Russia. This combination of factors certainly suggests that if Moscow sees the opportunity to try to replace Lukashenko with someone more reliable to the Kremlin, that is exactly what the Kremlin would try to accomplish. In that situation, Moscow would be re-running the same play-book it ran to get Yanukovych elected as president of Ukraine. Even if such a far-fetched plan were to work -- and it almost certainly would not, in the short term or the long term -- who would take Lukashenko's place? There is no one that would not leave Moscow worse off than they would be with Lukashenko. While it's obvious why he's not ideal, given the recent history of strife between the two countries, there is no world where Russia's interests are -- at this time -- served by trying to replace Lukashenko with a Kremlin puppet. In the second set of possible worlds, Lukashenko remains and has to quell or pacify the Belarusian political unrest while maintaining ground against increasing Russian pressure. To accomplish this, Lukashenko could do something like seek a trade deal with the EU, as both Georgia and Ukraine did. But that would almost certainly would involve some kind of military response from Russia, just like Georgia and then Ukraine. While there's an argument to be made that Lukashenko's historically closer relationship with Russia (however complicated) insulates him from the kind of retaliation Putin visited upon Georgia and Ukraine, he would still be playing with fire. The Russian response to that kind of a bargaining chip from Russia would likely not come in the form of unwillingness to discount oil; it would come in the same form as was witnessed in Eastern Ukraine. To be clear, neither Putin nor Lukashenko benefit in that case. The remaining option is most likely: Lukashenko "cracks down" on the protests, and then everything goes back to normal. Why Belarus is Different from Ukraine & Georgia As I wrote before, Belarus is not Ukraine. Maidan in Ukraine was in direct response to Ukrainian government's preventing Ukraine from joining the EU. The Ukrainian government opted for a counter-agreement with Russia instead. In response, Ukrainians took to the streets and sought Yanukovych's resignation. He subsequently fled to Russia. There were other abuses that precipitated the demonstrations, like Yanukovych arresting his pro-democracy political opponents and arresting journalists who were reporting on the extent of his corruption, but the threshold moment was when Yanukovych tried to rebuke the democratic will of the Ukrainian people (shirk the EU in favor of the Kremlin). So, for Ukraine, the goal was a clear and decisive move towards the EU and the United States (and NATO, by implication). This was in response to decades of Kremlin meddling in Ukrainian domestic political affairs. Maidan there was Ukraine setting forth a future for itself that did not include Putin. Belarus also isn't Georgia. The purported underlying ethnic conflict behind the Russian invasion of Georgia was little more than an illusory pretext; Saakashvili's primary aim for Georgia was to become a NATO member and there was clear support for that in the Bush Administration because of the implications that would have to world oil markets. Specifically, despite the fact that Georgia has no reserves of its own, a pipeline across Georgia would substantially decrease Western dependence on Middle Eastern oil. Bush even outlined a pathway for both Ukraine and Georgia to join NATO. This was intolerable to Putin, and so he invaded as a result. Belarus and its present situation is almost wholly incongruous. Belarus is now and has always been a far more authoritarian regime than Ukraine ever was, even at its worst. Unlike Ukraine and Georgia, Belarus never made the initial step towards actual democracy that ultimately laid the foundation the Ukrainian maidan or the Georgian efforts to draw closer to the West. Belarus also does not have ambitions of closer ties with the West, and the EU and Untied States in particular -- which Ukraine has sought for some time. Lukashenko only ever used that as a bargaining chip to extract concessions from Moscow -- a fact of which Putin is invariably aware. The riots taking place now in Belarus are not oriented towards any goal in particular, either. It's arbitrary rage. Even if they were oriented towards democratic reform, and it is not clear that they are, Belarus has no intention of divesting itself from the Russian sphere of influence -- however high the costs of maintaining that relationship may be. Compromise / Cooperation best serve both Belarus's & Russia's Interests If both Belarus and Russia act rationally, they will cooperate and compromise. Russia will have little choice but to accept the fact that Belarus is not merging with Russia any time soon. The costs of Russia's invading would be inexorably high. There is no one in Belarusian politics that can replace Lukashenko that would be both able to preserve Belarus as a state and that would in the same instance be able to more effectively advance Moscow's interests. Likewise, it is in Russia's interest that these riots and protests throughout Belarus come to and end -- as quickly and expeditiously as possible. Political unrest in one totalitarian country has a tendency to spread to another; as Putin has experienced time and again, dating back to his time in Dresden through the present. Further, this all comes at a time when Russian public confidence in Putin is at an all time low -- and the potential for another Moscow maidan (and perhaps one that might actually be successful) is at an all time high. Given that, the more pertinent question in the final analysis might even be, if Lukashenko falls, is Putin next? Their fates are tied together, whether they like it or not.
I did research into Peleton's growth and what their revenues might look like from their subscription model. DD inside.
I present you with the latest and greatest of meme stonks, Peloton (PTON). It is my OPINION (*not financial advice) that PTON will be destroying their next earnings report and will continue it's strong guidance. For those unfamiliar with Peloton, they manufacture stationary bikes and have created an at-home fitness subscription that locks users into their ecosystem. Old Wall is still unsure how to price the company as historically any sort of manufacturing company receives extremely low valuations, especially in the fitness industry as margins are low... BUT low and BEHOLD, Peloton is not just your typical manufacturing/fitness company, they currently have over 850k subscribers locked into monthly payments. Last quarter (Q3) Peloton already demonstrated extremely high growth due to Covid and the lockdowns. It was also their first time posting a EBITDA profit, which can be attributed to the 1 month of Pandemic sales they logged in the quarter. Check out this chart that demonstrates the revenue growth of their most recent earnings YoY to the same quarter last year. Here are points from their Q3 earnings call for Q4 guidance and fiscal year 2020 outlook: 1. Post $55-$65 million Adjusted EBITDA, 11.8% Adjusted EBITDA Margin in Q4 (upcoming September Earnings Call is their Q4). 2. Q4 $500 million to $520 million total revenue, 128% growth at midpoint. 3. FY 2020: $1.72 billion to $1.74 billion total revenue, 89% growth at midpoint. 4. 1.04 million to 1.05 million ending Connected Fitness Subscribers, growth of 104% at midpoint. I'm going to go over a few metrics and notes from my research and my opinion on why I think even after guiding up such huge growth they are still sand-bagging estimates. Not only can they blowout the quarter, but continue strong guidance and raise estimates BIGLY. I'll try to order the data in a way that will make sense, you guys can trust me I just learnt stonks this week. Let's start with last quarter's results. As noted by the co-founder and CEO, their strongest quarters are Q1 (Christmas for you autists) and Q2 (the quarter that follows Q1), with Q1 generally being the stronger of the two. Last quarter's results crushed their Christmas and holiday quarter as YoY they grew at 64%. They also guided up next quarter to 128% growth YoY, which is pretty damn remarkable... But this is old news, the stock has already gone up 100% since last quarter, where are we going to find the edge? Let's dive deeper. Revenues from selling their core product, the spin bikes, will be capped due to supply chain restrictions. They've also currently stopped delivering treadmills to focus on the bikes which are in such high demand. For this reason, I think their revenue estimates on the bikes will be somewhat in-line with guidance. During last quarter's conference call they noted that almost every order for bikes in the following quarter won't be posted until the quarter after next. Why? Shipping times in June/July had wait times of 8-11 weeks. They are completely fucking sold out of bikes, and can't produce these things fast enough. Check out the traffic trends for the website, which has yet to show a decline, and also the Google trend for Peloton keyword. The CEO has also stated that they are currently selling each bike at cost, meaning they don't make any money per bike sold (but that includes operating/marketing costs). Although he did mention as the company continue to grow with economies of scale, they will be able to reduce the costs of the bikes. TLDR; right now the bikes are sold at break-even. What we will be looking at more in-depth will be future revenues from their subscription model. But first, here are a few noteworthy bits of information I pulled from their last conference call. "Over the past several weeks, we have worked closely with our manufacturing partners to accelerate the supply of goods and, as a result, we are incurring higher costs in order to expedite shipments. We do not expect to materially improve order-to-delivery windows before the end of Q4." TLDR; They are spending more money to keep up with all the shipments required from such high demand, BUT demand is so high they don't expect to improve on delivery times until the end of Q4. This is good. "For Q4, we expect a Subscription Contribution Margin of 63.0% to 64.0%" TLDR; Their subscription contribution margin is really FKn high for a "hardware" company. "But predominantly for the US and UK, we are turning off the majority of our media spend, which I think we've said in the past is has been roughly call it half of our cost structure in sales and marketing." TLDR; Remember that they are turning off half of their sales and marketing expenditure. I will get to this later on and see how much they are saving. "You could envision John (the CEO) had talked about the innovation pipeline of new products, you can envision substantial marketing going behind that in future quarters. Again, we're not going to announce anything, but we feel good about that." TLDR; They have more products in the pipe-line. Rumors are a less expensive bike and/or rowing machine. It's all part of getting users into the "ecosystem" and paying that monthly subscription. "We have a strong balance sheet with over $1.4 billion of cash and cash equivalents and additional liquidity in the form of an uncapped $250 million credit facility, providing significant resources to take care of our employees and members during this time, while allowing us to continue to make investments in our platform to drive growth going forward." TLDR; They have large amounts of cash and can use it to penetrate international markets, which they are slowly starting to do. Like u/sharkbat3 said in his DD, think NFLX pre-international spike and how it affected their numbers. Onto some more meaningful numbers, lets look at the last 3 quarters of subscription growth.
Q1 - 67m, 37.7 gross. Q2 - 77m, 44.7m gross. Q3 - 98.2m (!), 56.8m gross. Now consider this, last conference call they noted: "Supply chain team was able to DOUBLE from march, "more than double" the output, but at an increase of costs." Wait time for a bike back in May was 12 weeks. In July it was 8-10 weeks... And it is currently still at 6-8 weeks to receive a bike. Lets say they are shipping bikes out at double the rate, it really doesn't matter since they don't make a profit on the bikes. However, more bikes manufactured and sold will 1) Jack up revenues 2) Increase users locked into subscription model. If this Q and next Q continue to be massive, as it's shaping up to be. It wouldn't be crazy to think subscription revenues continue the rate of growth from last quarter (considering last quarter only got 1 month of Pandemic sales). In which case: Q4 Estimate - $98.2m * 1.27 (27% growth last Q) = $124m, $75m gross (60% gross on average). Q1 Estimate - $124m * 1.27 = $157m, $95m gross. With those metrics in mind they will be earning approx. $600m ARR of which $400m will be gross profit. Again, this is recurring revenue for a "manufacturing" company. Next, let's talk about guidance and profitability. Remember from above I told you to keep in mind when they said they cut all media spend which correlates to about half "sales & marketing expense". Here's a look at the S & M expenses from last 3 quarters. Their sales and marketing expense is pretty consistent with about 30% of revenue. Last two quarters S & M expenses were $160m, and $150m respectively. We can now estimate they will be cutting about $75m from media spend. Last Q their EBITDA profit was about $20m, their profitability will jump huge from consistently high demand of bikes (with no end in sight), increase in subscriptions, and now the pullback in advertising expense. I wouldn't be surprised if they posted a net profit of $100-150 million this quarter (just a Swaggy estimate, pun intended). Looking into their FY 2020 guidance, they guided $1.72 billion to $1.74 billion total revenue. Their last Q was just $524 million, and guidance for next Q is conservative at $500 million to $520 million. From the displayed high demand, it would be reasonable to estimate they could do another $500m next Q and $600m+ for their holiday quarter. That would put them at TTM revenues of 2.1b+. $400m more than their 'estimate' for the FY 2020. Lastly, let's talk about their current valuation. They are sitting at market cap of only $18 billion. For a company about to be doing $2.1b TTM revenues which could be as soon as next year with $500-600m of that being ARR (annual recurring revenue) at 60% gross. It's for you to decide if you think they deserve to be trading at that multiple. The CEO was on the "How I built this podcast" a month ago: Here's the URL and a few times I logged with important info, you can watch his body language in the video and see how excited he is about how well the company is doing. I can’t link the YouTube here, but if you want to watch it search “How I built this Peloton” and it will come up. 3-7 mins: -Talks about the surge in pandemic demand 7-8 mins: -Talks about how the company has found a 'wind in their sails' (watch body language) 23-28 minutes in: -Talks potential of new product and how the Peloton users will be excited to enter the ecosystem. Also talks about the understanding of selling Peloton to investors as anything but a hardware company.
AREIT announces Q1 and Q2 dividends, stock bounces (Tuesday, August 18)
Happy Tuesday, Barkada --
The PSE closed down 9 points to 6069 ▼0.13%.
Shout-out and thank-you to shining_metapod, yellowprintsz, joewelle_03, underratedmercenary, and pheasantph for the positive feedback and appreciation! Tip-of-the-hat to syf3r for pointing would-be subscribers to the "Join our Barkada here" link (I guess I need to make it more obvious?), and to pawnstar26 for helping other barkadans find the MB email that may have fallen into GMail's "Promotions" tab (if you aren't receiving the email consistently, check there!).
Fast Food ▼1.85% MiddleClass ▼1.27% 2020 IPOs ▼0.77%
Main stories covered:
Fruitas pivoting to delivery and “community stores” to minimize losses
Q2 results:The company [FRUIT 1.18 unch] made a net loss of P27m in Q2/20, down 163% from the P41m profit that it made in Q1/19. The kiosk-store operator blamed the results on COVID and the movement restrictions that followed, as the company (traditionally) relied on foot traffic and food court traffic to prop up sales. Obviously, COVID threw a mjolnir-like wrench into those plans, and the results show it.
The pivot:FRUIT’s owner, Lester Yu, seemed to be the first of the quick-service food industry leaders to anticipate the carnage to come. Just before the lockdown, Yu caused FRUIT to acquire “CocoDelivery”, a food delivery service company, to support Yu’s plans to quickly expand FRUIT’s online and delivery service. Delivery is a main platform of FRUIT’s pandemic gameplan: “We also continue to pivot our business model to derive more contribution from delivery and community stores.” Using JFC and McDo as guideposts, the industry should expect to derive 60-70% of COVID and post-COVID sales from delivery and other “off-site” channels.
COVID tactics: *The company was also proactive in streamlining the menu to push consumers towards products that FRUIT could produce most cost-efficiently, which actually helped FRUIT to increase its profit margin to 60% (up from 58% pre-COVID). While sales were down more than 50%, FRUIT was making more money from whatever sales it was managing to get. *
BARKADA BOTTOM-LINEFRUIT reveals the COVID playbook for fast food and quick service restaurants alike: build-up in-house delivery capability, reconfigure physical assets for delivery/take-out, and trim menu options to eliminate unprofitable/less profitable options. If the company continues to judiciously open stores (when profitable) and invest in online delivery channels, it may go forward in this crisis with a leg up on its competitors. Even large incumbents like McDo and Jollibee are having to undertake the build-out of in-house delivery systems to protect profit margins from the opportunistic 3rd party platforms like Food Panda and GrabFood which can charge a commission of up to 18-20% per order. If FRUIT is able to expand its delivery capabilities while increasing its profitability, that should go a long way to protecting shareholder value through the COVID crisis and beyond.
Phoenix Petroleum [PNX 11.34 unch] profit ▼97% y/y… Q2/20 profit of P13m, down 97% from Q2/19 profit of P489m. PNX’s fuel trading business profit fell by over 60%, but its “Depot & Logistics” segment grew 2x, possibly due to the demand for fuel storage during the exceptional drop in price during the Saudi Arabia / Russia price war. The company did note a 53% drop in cash and cash equivalents caused by “settlement of matured debts, lower sales and collections” resulting from COVID and the ECQ.
MB:PNX needs the economy to consume for it to grow. It needs planes flying passengers and cargo, boats ferrying people and goods, trucks moving goods from warehouses to points of sale, and cars taking people to school, work, and on trips all around the country. While guarded recovery is expected for some of these segments as the economy is opened, investors need to be wary; the PH isn’t reopening the economy from a point of strength. We’re reopening the economy because the government can’t afford to support taxpayers any longer. The workers and people are not suddenly eager to travel and to consume. Work-from-home will continue to eat into PNX’s retail gas profits, perhaps for years. Air traffic isn’t expected to return to pre-COVID levels until 2024. One look at Chelsea’s [C 3.33 ▲1.22%] or 2GO’s [2GO 8.50 ▼3.30%] financial results tells you everything you need to know about the state of the domestic shipping industry. Profits are going to be hard to come by. Q2 isn’t just a blip.
Liberty Flour Mills [LFM 43.00 unch] profit ▲297% y/y… Q2/20 profit of P30m, up 297% from Q2/19 profit of P8m. The flour-producer has been one of the bright spots during the COVID crisis, as the lockdown and the income- and food-insecurity that followed pushed more and more people to grey-market food commerce and home-cooked meals. Raw materials and basic staples have been in high demand since March, with consumer favorites like Gardenia Bakeries saying that they’ve been running production lines 24/7 for the past 5 months. All of that is great news for flour millers.
MB:Who didn’t experiment with baking their own bread in the early days of the lockdown, when the severity of the disease wasn’t well-understood, and the resiliency of our supply chains had yet to be tested? What family didn’t have nightmares of receiving food-aid from their barangay captain? I personally spent many of those early days stocking up on supplies and ingredients like flour to ensure that I had a source of calories and a variety of food options should things get really nasty. LFM’s Q2 numbers show that I wasn’t alone… and the longer this crisis goes on, the more people may be forced to convert spending from fast food establishments to home cooking in order to conserve dwindling discretionary income.
So, Xurpas [X 0.58 ▲1.75%] appears to be circling the drain… while X cut its Q2 losses in half, from P48m in Q2/19 to just P24m last quarter, the company appears to be in dire straits after it sold away its profit-puppy, Yondu, to Globe [GLO 2118.00 ▼0.84%] back in 2019. Without Yondu, X has seen its H1 income decrease 90% y/y. X reported that the pandemic and lockdown has caused clients to delay or outright cancel corporate projects with the company, but that it still considers the pandemic to be an opportunity to make money assisting companies moving online, or as X calls it, going through “their digital transformation.”
MB:The company notes in the MDA section that it recorded a “capital deficiency” of P7.69m as of June 30, 2020, explaining that as of the end of 2019 it had only P25.89m in total equity, and that the deficiency occurred after incurring “total comprehensive loss” of P33.59m. That’s not good. Apparently, X’s founders pumped P150m of loans into the company earlier in the year to keep it afloat, and that only P50m of that is still available for use. At this rate, that gives X almost exactly two quarters of runway, before….
AREIT [AREIT 25.95 ▲7.68%] stock recovers as company announces September dividend and massive debt sale… the baby REIT, a subsidiary of Ayala Land [ALI 33.10 ▼0.60%], announced yesterday that it is declaring Q1 and Q2 dividends of P0.28/share and P0.31/share respectively, for a total of P0.59/share. The dividend will be payable on September 15, 2020, to any shareholders on record as of September 2, 2020. AREIT also disclosed a plan to set regular quarterly dividend payments before the end of each quarter (March 31, June 30, September 30, and December 31), and, more interestingly, the filing for a 3-year shelf registration of up to P15bn in debt securities for acquisitions and “liquidity” to ensure dividend payments. Oh yeah, and the SEC is investigating brokers like COL Financial that failed to secure the necessary permits to allow clients to trade AREIT. Most have been unable to make any AREIT trades since the IPO.
MB:This is the first indication of AREIT’s intention to grow its holdings beyond the planned purchase of the Teleperformance Cebu property (from ALI) that was mentioned in the IPO prospectus. AREIT also appears to be taking its role as a healthy dividend player very seriously, borrowing money at very low rates to help keep the income flowing. Investors will want to keep an eye on this, however, as burning the walls to keep the house warm will only be appreciated for so long before investors will want to see the company grow its property bank to expand the dividend.
MB is posted to /PHinvest every Monday and Wednesday, but my newsletter goes out daily. To stay in the loop for daily email delivery, please join the barkada by signing up for the newsletter, or follow me on Twitter.
McDo PH: no full recovery before 2022, fast food forever changed (Tuesday, Aug 11)
Happy Tuesday, Barkada --
The PSE closed up 85 points to 5931 ▲1.45%.
Thank you to microrama, LemonDoping, and xtiankahoy for the words of support and encouragement, and to Michael for his email question about my non-inclusion of the Consunji clan into the MB Family Showdown. I didn't exclude that family on purpose, they just don't really figure prominently in my investing "life", so I haven't had reason to deep dive into their holdings yet. Though, I will fix that this weekend! Also, shout outs to PabloCesar2189, hadalaboforlyf, and dimaandal for wishing me and my baby well. She's not so "new" anymore, but still it's incredible how a baby can entirely re-write all the household bylaws and customs overnight. She's the best, but because she was born at Makati Med on the night of Koko Pimentel's Great Big COVID Adventure, it's been a white-knuckled, wild ride of self-isolation, quarantine, and Viber pedia checkups. I'm thankful, though, because both mother and daughter are happy and healthy and that's been my only goal.
MiddleClass ▼1.30% Power Gen. ▼0.67% Cement ▼0.63%
Main stories covered:
Sobering deep dive into the takeaways from a Mcdonald's PH investor conference call
The background: I was given the chance to see a document put together by a global private equity powerhouse (to remain unnamed!), about the key takeaways from an investor conference call its analysts attended with McDonald's Philippines Managing Director Margot Torres. McDonalds Philippines is owned by Golden Arches Development Corp (GADC), which is in turn owned by Andrew Tan’s Alliance Global Group [AGI 5.80 ▲4.50%]. The following are a summary of the key takeaways (by those analysts) from that call. Keep in mind that everything here is simply from a document that I was provided; I have not independently confirmed the details (I wasn't invited to attend the call, haha), and what was said may have been incorrectly noted by the firm's analysts or I may have incorrectly interpreted their interpretations. Provided that's understood, let's get going!
#1 - Recovery is slow and might take until 2022: The main reasons for the slow recovery are (1) the continued curfew, (2) consumer uncertainty, and (3) the overall hassle of COVID precautions that people must take when leaving the home, getting on transpo, or entering a mall/facility. Interestingly, GADC said that delivery can’t make up the loss in in-store dining because it’s just less affordable: the P49 delivery fee and higher prices mix poorly with the job losses and income insecurity that GADC’s customers are feeling as a result of COVID. GADC thinks that we won’t see 2019 levels of activity until sometime in 2022; it doesn’t think it will break even until H1/2021, and it might not make a profit until H2/2021.
#2 - The dominance of off-site dining will “stick”: GADC thinks that off-site dining (delivery, drive-through, and take-out) will account for 70-80% of all sales… even after COVID is dead and gone. GADC believes that it will take material amounts of time and money to re-fit stores to maximize drive-through (and moto-through) sales. But, 70-80% off-site is a huge change from the “in-store dining first” model that GADC (and JFC) have operated under since… forever, and that’s why it’s shocking to hear GADC say that it might permanently slow store expansion under the assumption that off-site dining will be the “key driver” of topline sales in the future.
#3 - 3rd party aggregators are driving off-site growth: The 3rd party aggregators are all the delivery apps that pickup the food and deliver it to the end customer, like Food Panda and GrabFood, and according to GADC, these aggregators are driving the growth in the off-site sales channel. Unfortunately for GADC, the commissions charged by the aggregators has been climbing; it’s currently at 18%, and might be even higher next year at 20%. GADC thinks that building a robust in-house delivery infra will help GADC gain/keep bargaining power over aggregators to suppress commissions, and (bonus!) as delivery volumes increase, so does the profitability of its in-house delivery program (aggregators are more profitable in low volume situations -- perhaps “barely” profitable is a better descriptor). GADC thinks that delivery profitability can be higher than dine-in, as the “ticket size” (order size) is 3x larger for delivery. JFC doesn’t benefit from the same multiplier, as its orders tend to be smaller.
#4 - Competition has gone up as barriers have come down: GADC has noted that competition for stomachs has increased dramatically thanks to the 3rd party aggregators. The aggregators allow restaurants with no delivery infra to compete head-to-head with GADC and JFC, while customers who have lost their jobs or have experienced income insecurity have shifted purchasing patterns to favor hawker food and home-cooked food. GADC looks into the future and sees H2 having still more job losses with smaller and smaller remittances coming from overseas.
BARKADA BOTTOM-LINE: GADC’s outlook was based on the assumption that a viable vaccine would not be found in 2021, and/or there would be a second, material “wave” of infections that cause widespread disruption. Jollibee’s [JFC 137.50 ▲2.46%] outlook is, from far away, largely the same, though it’s clear GADC is more conservative and JFC more optimistic in its medical and societal assumptions for 2021. This conference call shows that GADC is contemplating immediate and (probably?) permanent changes to its business plan that has served the McDonald’s brand very well over the past half-century. Maybe the argument could be made that society was heading in that direction anyway, since aggregators are not new and didn’t come into play only after COVID arrived, but it’s without a doubt now that COVID has sped up this change to an insane degree. For GADC and JFC, the change from “70% of sales in-store” to “70% of sales off-site” was overnight. Both GADC and JFC will have to fight tooth and nail for profitability, and anyone reading this will already know where the battle will be: delivery, and the aggregators’ fee. GADC (and JFC) will be doing everything in their power to chip away at that fee, or to grow around it from the top (by emphasizing take-out or drive-through over delivery), or from the bottom, by building their own delivery systems. There are also a ton of open questions that touch other companies on the PSE, such as Philippine Seven [SEVN 125.00 ▲2.46%] and MerryMart [MM 2.90 ▲1.75%]. A big part of the convenience-store expansion was founded on the growth in customers using c-stores for grab-and-go meals and quick dine-in meals; how will these quick-meal profit centers change as foot traffic remains elusive, or as 3rd party aggregators grow cheaper as competition for food delivery grows more fierce?
Robinsons Land [RLC 14.20 ▲2.90%] profit ▼76% y/y… Gokongwei’s real estate development arm posted a paltry P520m profit in Q2, which was 76% less than the P2.2bn it earned in Q2/19. So while H1 profit might be down 8%, drilling down, we see that Q2 profit completely cratered by a considerably greater margin. RLC gave the usual reasons for the difference (COVID, lockdown), and trumpeted the ability for each of its division to be profit-positive despite the terrible circumstances.
MB:Even that H1 number is kind of iffy, since (if you’ll remember) RLC’s numbers were propped up in Q1 by an accounting change; without that accounting move, RLC’s H1 profit would have been down an incredible 51% as compared to just 8%.
Asia United Bank [AUB 45.05 ▼3.43%] profit ▼24% y/y… the bank made P1.1bn in Q2/20, down 24% from the P1.5bn it made in Q2/19. AUB blamed the discrepancy on COVID, specifically, on the “715% increase in provision for credit and impairment losses as the bank factored in the effect of the pandemic.” The bank experienced great income growth from its trading desk, improving 94% y/y.
MB:Read alone, the AUB statement is cold and reassuring in a distant sort of way, insofar as all of the terrible consequences of the COVID pandemic are distilled into “non-performing loan provisions” that still manage to shock us given their size. However, if you read AUB’s statement (or any bank’s Q2 for that matter) in conjunction with the GADC deep dive above, you can start to see why AUB has anticipated a 715% jump in loan default losses, and you can start to see how, for the banks, the crisis only just starting to reach their financial statements. If COVID is thought of as a tsunami of economic destruction, the banks are only just noticing the rush of water around their feet right now. I don’t mean to be dramatic, and I’m not calling that our banks will drown in a torrent of NPL losses, but just as COVID has leading indicators (new cases) and trailing indicators (deaths), so too does our economy have leading indicators (capex spending) and trailing indicators (non-performing loans). We’ve already seen all the big houses chop capex: that started in Q1. Now we’re starting to see the businesses and people go bankrupt as the economic disruption turns into economic destruction.
MB is posted to /PHinvest every Monday and Wednesday, but my newsletter goes out daily. To stay in the loop for daily email delivery, please join the barkada by signing up for the newsletter, or follow me on Twitter.
Can anyone explain Zerodha's physical delivery settlement bs?
I have recently decided to start options trading. I know that SEBI changed the rules from cash-settled to physically-settled last year. But what I don't know is how this is done. And Zerodha's explanation just complicates it further
Will i need to give/take delivery if I square-off before expiry? How much before should I square-off
How do I give delivery of a stock if I don't have them in my DEMAT in the first place?
The margin for hedged positions is significantly lesser, but Zerodha says it'll double margin 2 days prior to expiry. What if I don't have that much in my account?
It also says "All give delivery positions will require you to have the shares equal to the lot size in your demat account during the expiry week." What does this mean?
Gearing Up For Future Market Trends and Preparing A Stress-Free Portfolio
I've been studying the market across multiple sectors in the past two months. My primary focus is in the EV/Gas/Mining/Tech sector. This post might be more fitting for investing but I hope this can help someone on this forum as well. First off, it's only suitable for me to preface this with a quick discussion on Tesla. I'd like to point out that Tesla's earnings report was largely good on the cashflow side, delivery + guidance numbers + margins. It's was pleasantly surprised by the cashflow since Tesla is developing gigafactories in Berlin, Shanghai, and Austin which should have tied up some of their cash, but it looks like these liabilities were deferred as debt. In terms of the carbon credits, I think this was a very strategic move to qualify for the SP500 inclusion and I previously thought it would take 2-3 months for companies to become inducted as per usual, but a lot of fund managers and analysts predict a much quick inclusion should it be approved. My price target for Tesla pre-earnings was $1350 as a I worried much of the quarter's catalysts are well baked into its current valuation, but am considering buying today's and potentially tomorrow's dip should there be one. On that note, I'd like to discuss the importance of being patient with the current market. I think options are great and a lot of fun, but it can hurt tremendously if you're too actively trading and without a proper set of hedging strategies to dampen the risk. That being said, lets first discuss my first pick: Nickel mining. Nickel is an incredibly important source of energy and a vital component for lithium-ion batteries. They are low in cost, but high in energy density and largely efficient. As I'm sure many of you are aware, Elon did mention Nickel's value in the ER conference call and this was preceded by many analysts having expressed interest in the Nickel mining market. Figure 1: Nickel demand has been growing substantially since 2016 and currently, the metrics to evaluate this demand is based on BEV/PHEV/Hybrid consumer data. The projections indicate nearly exponential demand curve moving into 2025 potentially as a result of automaker's shifting heavily into BEV-only cars. Currently, the market for precious metals are inflated obviously as a result of the rise of digital currency printing. The only issue with this is that people are speculating hyper-inflation in the forthcoming years should a vaccine fail to realize, and until some clarity is established in the coming months, I believe gold, silver, palladium, etc are all speculative metals that hold some intrinsic value. Nickel, however, is different. It is an emerging market in the precious metals category and has long been considered less valuable than its counterparts. It's only with the rise of the BEV market that people began to realize the potential and demand for Nickel. Currently, there are no environmentally sustainable ways to mine nickel as most of these metals are discovered in the form of lateritic ores, which is a combination of metals. The only way to extract pure grade nickel in this process is via large earth moving equipment + metallurgy process which has a carbon footprint. If mining companies successfully extract Nickel via more efficient means and in greater quantities, these companies will thrive in the BEV market. That being said, this is what you guys came for: VALE, BHP, LIT, XME in that order. VALE is the largest mining for Nickels at this moment with a low market cap. BHP is a sizeable mining corporation with the means to increase their Nickel extraction beyond that of VALE should they commit this route. LIT is the ETF for lithium batteries industry. XME is an ETF for mining companies of which many deal with Nickel extraction. Buy shares, go long, and stop stressing every 6:30am in the morning. Life is for living. Also, cost average down on Tesla should it drop or rise. It's an attractive point still despite its high valuation. Long any energy companies associated with Tesla (i.e Sunrun, Vivint, etc. - but wait for consolidation or cost average down if you have the capital).
After seeing a lot of baseless speculation thrown around re: lofty price targets, I figured I'd take a crack at a DD with some real numbers, now that we have 2 Qs of FY20 earnings from the companies that actually have products in the market. EV losses got you down? Exact your revenge with the mighty potato! (And veggie straws, pretzels, and cheesy poofs and shit). I give you Utz, the largest privately-held snack food company in the US. For all you nerdy types, here's the P&L update from August 2020 and merger presentation where most of the figures used are from. Summary (CCH) Last Close: $13.69 (nice) CCH Market Cap: $770 million Shares Outstanding (CCH): 44 million (Remaining Shares are with the founders) Institutional Holdings: 34.2 million shares (77.77%*...whoa) This is the highest inst. holding % I've seen for any SPAC, which is a big + *The Top 10 of 96 institutional holders have ~50% of the 44 million shares Options? Merger Date: By end of Q3 Annualized Dividend: $0.20 Utz Implied Market Cap (CCH is 50% of Utz): $1.55 billion Meme Power (High)Utz is 100-years old, and the #4 snack food company in the country, with Pepsi, Campbell's, Kellogg's and General Mill's rounding out the top 5. Warren Buffett tried to buy a portion in 2015 with no luck. Most people, and most importantly boomers, don't even know this shit's going live. What do you think will happen when they see that sexy ass ticker scroll by on the bottom of their screen as they eat their chips/pretzels/cheesy poofs? They'll wanna get a piece of the action of course! People love tickers that match up with company names. Don't believe me? AAPL, AMD, TSLA, JNJ, QCOM, JD, MCD...are you seeing a pattern yet? Okay not saying that this stock will become one of those, but they are some of the most well known stocks because they have easy tickers. Remember what happened to FREE? FY20 EBITDA target: $124 million EBITDA achieved in Q1/2: $63.3 million (51% to target) YoY Growth Target: 15% Q1 YoY Growth: 39% (!!!) Q2 " ": 15% Assuming only a 10% growth in the next quarter, and a flat Q4, FY20 EBITDA is ~$137 million Bonus: 52-week rolling sales hit $1 billion for the first time on 4/20 (nice) Competitor Analysis and Projections The industry median for Price to EBITDA multiple is 14.8x, which would give us an implied market cap of $2.03 billion at the end of 2020. The SP would be $17.93. BuT eBiTdA mUlTiPlEs ArE uSeLeSs! Fine then let's talk P/S motherfucker. The remaining top 5 industry peers and their ratios are: Pepsi: 2.86 Campbell's: 1.90 Kellogg's: 1.78 General Mills: 2.23 Using a conservative ratio of 1.9 gives us a valuation of $1.9 billion (duh) back in April, and a 10% growth quarter since then brings us to $2.1 billion. This gives us an implied stock price of $18.55. If it ever trades at 2.86, we're talking $25 + all those dividends. What are they doing to improve? Since rona took over, 12-week tracking data showed Utz had a 24% YoY sales growth. Yup, in this economy. Campbell's ($1.25 bn annual sales) was next at 20%, and Kellogg's ($1.1 bn annual sales) lagged at 9%. Utz is ready to pass them both to claim the #2 spot behind PepsiCo. In 2016, Utz had a 67/33 split in company-owned distribution vs privately-owned Direct-to-Store (DTS) delivery. By end of 2019, it was 23/77 going the other way. By 2021, they'll be entirely DTS, saving tons of $$$ by not operating regional distribution centers and having to pay for storage, labor, transport etc. To put it simply, your taters (and cheesy poofs) are delivered with higher margin, supreme freshness, and with max tendies for you, loyal call holder. Chart Action/Voodoo Lines 50-day SMA: $13.77 RSI: 50 (neutral) MACD: 0.08, about to go into the golden cross Pattern Identified: Flag Trendline: Holding bottom trend from July 27th (1 hr chart) TL;DR: Utz has been CCH-CCH-CCH-CCHugging along, and is ready to go public with a dividend off the hop. Buy shares for a safe play or throw the darts below like a true CHAD for tendies. Positions Merger Play: 10/16 $15 Calls @ $0.60, or $17.50 calls at $0.25 (lotto) Big Brain Merger Play: 10/16 $12.50/15 Call Spread @ $1 or $12.50/17.50 for $1.50 Intermediate-Term Play: 1/15/21 $12.50/17.50 Call Spread @ $1.55 or $15/20 @ 0.95 Long-Term Play: Just buy shares or warrants
ARCIMOTO. The perfect EV play (LEAPS or FDs, your choice).
Thanks to Tesla the EV market has been getting a lot of attention in the past few months. Many retail investors are pilling into EV scams (NKLA) or overpriced SPACS like (SPAQ, HCAC, etc...). These companies don't have working vehicles, they depend on press releases to pump the stock and investors are constantly diluted for no reason. Meanwhile, many institutional investors are securing positions in different companies that have a high chance in becoming big players in the EV revolution. Solid companies with defined plans, realistic goals, working products and real factories. July 09, 2020: (BUSINESS WIRE) Arcimoto, Inc.®, (NASDAQ: FUV) today announced theentry into agreements with institutional investors relating to the sale of 1,370,000 shares ofits common stock at an above market offering price, pursuant to NASDAQ rules, of $7.30 per share. https://preview.redd.it/72r2hivr8tg51.jpg?width=700&format=pjpg&auto=webp&s=146bdfbff1dcb25ab76d32c83affe7fb03dbaceb VARIETY OF PREMIUM VEHICLES
Fun Utility Vehicle (FUV). Designed for individual transportation (two-seat). Mark Wahlberg recently bought one and he loves it. VIDEO He liked so much that he also got a delivery fleet for his restaurants "Wahlburgers".
DELIVERATOR. Designed for delivery. The vehicle has tons of space and can be used by restaurants do deliver large meals, by supermarkets to deliver groceries or by individual drivers that participate in the growing "GIG ECONOMY". VIDEO
Rapid Responder. Designed for first responders, law enforcement and campus security. Improving response times and reducing carbon emissions all at once. VIDEO
Located in Oregon. MADE IN THE USA
Started trading in the NASDAQ 3 years ago at $6.50 a share. The company was founded in 2007. Currently the stock is trading at $7.75
The company officially launched production and delivery on September 19, 2019.
World’s first premium FUV, the Evergreen Edition, has an affordable MSRP of $19,900 before gas savings, available tax credits, and rebates
Company reported a backlog of more than 4,000 pre orders ($75M in revenue).
CURRENTLY WORKING WITH SANDY MUNRO TO GO FULL SCALE PRODUCTION
They have applied for a federal ATVM loan (ADVANCED TECHNOLOGY VEHICLES MANUFACTURING LOAN PROGRAM). They plan to scale up with the proceeds of those funds with non diluting funding and become profitable in the next 18 months. AVTM LOAN PROGRAM (they worked very hard to meet all of the requirements)
They wanted to have production experience before going big. With 6 months of real production under their belt and a much clear picture of what capital expenditures and additional space will take to scale up manufacturing they finally completed the ATVM draft, they are in the review process and are planning to submit the draft to the Department of Energy in the coming weeks. This is from 11 June 2020
According to Inside Evsthe loan could reach $100M. This would be a game changer for the company because this loans are very generous with financing terms.
Max daily output with the current facility: Around 3,000 vehicles. They want to focus on the high margin vehicles and become profitable.
If they get the ATVM loan they want to achieve a yearly output of 17,000-20,000 vehicles. Given the current economic situation and stimulus money going everywhere, the CEO believes they have a high chance of getting the loan relatively quickly.
The company is loved by the current shareholders. Companies with cult following can be very profitable. Long term investors reduce the float because they hold for the long term giving the company a lot of momentum when positive news happen because nobody sells.
The company has been working very hard for over a decade to have a perfect working vehicle once they go into full scale production. The CEO is very smart and transparent.
They tested the production line with low volume (low thousands per year) to avoid unnecessary costs and production problems. Now they are ready for the next step.
Having someone as Munro planning the production and preventing mistakes once full scale production starts is extremely bullish. MUNRO & ARCIMOTO
They are focusing on the DELIVERATOR given the growing trend of deliveries and many people joining the "GIG ECONOMY"
They only have 6M in debt.
24% short interest
They raised money in June above market price (investors are willing to pay a premium to buy large blocks of shares)
40% owned by insiders
Q2 2020 in 6 days
TL;DR: Premium EV company with virtually no competition in the FUV space with different WORKING vehicles (personal transportation, delivery and first responders). Planning on going full scale with an ATVM loan they applied and waiting for approval. Ideally they want to raise production to 17,000-20,000 vehicles once they get the loan. I think we can expect big news during the Q2 call.
Idol-Rapper Analysis #1 - 4th Gen Boy Groups 1: ATEEZ, Oneus, A.C.E
Hello! i thought it would be fun to start trying to do some technical analyses of kpop idol-rappers and enough other ppl seemed to enjoy the idea so here i am! Very self centered of me to think you care about my opinion but if you don't care about it you don't have to read this! It costs zero dollars to click away from here!
here is my original post outlining a lot of Hiphop terminology/concepts/analysis
here is my post where ppl submitted the rappers they wanted to see analyzed
Some Disclaimers: This post is fxckin long This post will cover both technical aspects of rapping and some more critical analyses including my own personal opinion. I will try and justify my opinion as best possible but in the end, the opinion belongs to me and only me, if you enjoy a rapper I don't, or if you don't enjoy a rapper I do, that is all ok! Additionally if you are uncomfortable seeing your faves criticized this might not be the post for you! All of our faves have flaws and room for growth and pointing them out does not diminish their talents or hard work. If you disagree with my analysis I'd love to hear your thoughts! If i get something incorrect please feel free to correct me in the comments! I am open to criticism and correction! !!!!!!I will do my best to point out both an idols strengthsandweaknesses, but I will not water down my opinion to do so. !!!!!! My preparation for this post was listening to ALL the tracks the group had available on streaming, if the rappers have their own subunit or solo work i looked at that too. I didn't watch all of their live performances, but if there was a track i was referencing and it had a live version i tried to watch that for reference. Many of these rappers are very limited in the amount of long-form work they've put out. All my analysis should be taken with a grain of salt because of this.
Today's analysis will break down:
ATEEZ's Hongjoong and Mingi
Oneus' Ravn and Leedo
ACE's Wow and Byeongkwan
ATEEZ: Hongjoong + Mingi
About ATEEZ: Their music is highly dramatic, heavy emphasis on drops and a real "world music" feel with sounds derived from Australia, the Middle East, Latin America, and the Caribbean all with strong trap beats and more recently industrial style beats as a pillar of production. Their songs are usually composed with the focus on the performance and so have longer instrumental sections. Lyrically the majority of ATEEZ songs center around reaching their dreams and one day being the best. Standard stuff for an idol group. The two rappers of the group are also known for their "tom and jerry" style delivery meaning they often trade off verses one after the other and have two radically different sounds. Hongjoong: High C/Low B tier Hongjoong is the leader of ATEEZ and has been involved in writing every song they've released and had a growing production role throughout ATEEZ's time as a group. He has a pretty high timbre and usually prefers well defined stacatto deliveries mixed with a lot of well defined melodic movement in his verses. Strengths:
Good breath control/placement which allows him to do some longer passages without getting off or losing the beat. A good example of him doing this live and acapella is right here, no clue what this performance is from or why he was doing an Eminem cover. It's not mind-blowing performance or anything but it's a good show of consistent breath placement while still being high energy.
Really excellent rhythmic sense, doesn't fall off the beat and is probably the best in this post at riding the beat on a regular basis which relates back to having really good breath control. Even if he needs to pause to breath he immediately gets back on without fumbling. I haven't seen a single performance by him where he gets off.
Consistently uses his melodic range as a feature of his rap verses and has made that his signature style and flow. It works for him, it stands out among other idol rappers, and he changes it up enough in response to each song that it doesn't become boring or repetitive for the most part. Of all the folks in this post Hongjoong is definitely the one with the strongest and most consistent style across his group's work.
Despite many ATEEZ songs relying on a similar underlying beat or instrumental motif Hongjoong really pushes himself to give something different for each song. His flows don't sound super repetitive and are changed up to suit each songs he's not perfect, there are some verses that sound very similar but overall I never found myself thinking that I'd heard that verse a million times before. He always adds little flourishes to make them distinct
Unexpected and fun transitions between straight and melodic deliveries and another, like here on Twilight or here on Mist (which is one of his best verses by far imo)
I just love his delivery on Illusion.... i don't really have anything else to say, it reminds me a lot of what I used to love about E'dawn in Pentagon songs, almost childish and singsongy not because it's basic but just because it's a lot of fun.
Hongjoong is able to get into a good groove which works well with Ateez's tropical groove based songs. He always knows how to stress the downbeat to achieve truly bouncy goodness like here in If Without You. Despite his fast delivery he's still paying good attention to where he puts emphasis rather than just delivering it all straight without any variation
I only hesitate to give Hongjoong a full B tier not for technical reasons but because I just haven't seen enough variety from him yet. If he were to start releasing solo or unit tracks in different styles, or if Ateez branched out a bit more in sound and he still sounded good I think he'd be well into B-tier. Hopefully as his production skills continue to grow we get to see more of that experimentation.
Because of his high tinny voice when he does attempt to sound higher energy he can end up sounding quite childish and very un-powerful. The Kcon Thailand is a good example of this. It's high energy but very juvenile in sound Another example would be in the live performance of Dazzling Light, he starts the verse fairly strong albeit pretty out of tune, but his yelling at the end sounds like a kid's. The recorded version doesn't have this problem so it seems to be something he falls into more during live performances than while recording. A better example of him going loud and passionate without sounding childish would be here on Desire where he throws in some growling and doesn't stay at a high pitch.
Although his play with melody and rhythm is good and provides interest, Hongjoong still struggles with a full dynamic range. He rarely goes very quiet and, as mentioned, his loudest setting sounds awkward. This means he usually finds himself stuck in a middling volume and relies entirely on changing rhythm to convey the energy flow of a song. He still does that fairly well but he could definitely work to improve his ability to move through his dynamic range more fully.
There are times when the beat he's on provides SO MUCH amazing stuff to play off of that gets underused because he chooses to play it safe. A great example of this is on Horizon which is not a bad verse by any stretch but THIS is what the beat of that song sounds like and he chose to strip it away entirely in favor a really basic trap section. It's less that the result is awful and more that he's not using the song or instrumental to its full potential.
Although I enjoy his melodic delivery overall, Hongjoong is not a singer... and sometimes he veers far into the singer territory and ends up sounding very weak or even unpleasant such as here in My Way. He is also occasionally out of tune which, if you're going to be a melodic rapper causes issues.
A problem that he falls into as a result of ATEEZ's rather limited sonic and emotional palette is that I have almost no idea how good his emotional delivery/range or his versatility on different types of genre/concepts is overall. This obviously isn't a weakness for him per se, because he's not in total control of ATEEZ's concept or sound, but it limits his potential to be ranked any higher because I've can't begin to judge how he would handle beats outside the standard ATEEZ realm.
Mingi: Mid E tier Mingi is credited as a writer on all the ATEEZ tracks on which he appears. He is considered the lead rapper and leans heavily on his distinctive low vocal timbre. Mingi's delivery is very centered on a focused and continuous amount of power, occasionally he uses melodic lines but usually he prefers straight delivery with some higher inflections thrown in. He has a very low and throaty tone to his voice and sometimes ranges into an almost spoken delivery. Strengths:
Mingi has a voice that stands out a lot in his group, it often provides the backbone to ATEEZ songs with his parts in the chorus and when he uses his voice almost like a percussive instrument.
His voice has, I think almost a "foreign" feel? I don't really know how else to say it, but he definitely has a vocal tone that Korean media seems to associate with rappers and specifically with non-korean rappers. His sound reminds me most of a Latin trap artist which makes him fit in well with the sound and worldwide aesthetic that ATEEZ usually presents. Sometimes you can even hear other members of the group try and imitate that in songs by tightening their throat and widening their vowels but for him that seems to be the way his voice naturally sounds.
Although Mingi is not considered the top performer of ATEEZ (mostly because ATEEZ are some of the strongest performers currently active) he is no doubt a very good performer and is most definitely able to sell a lot of his delivery through charismatic live performances and his excellent dance skills.
When he wants to he has the capability to do lower volume and more whispery tones which are quite pleasing to listen to like his performance in Treasure (though admittedly he switches back to shouting not 15 seconds later but i'll take what i can). He has another laid back delivery on Pirate King during the first verse which works quite nicely with the track as well. Sunrise is another example where he starts the track at an appropriately low level.
Because ATEEZ does have quite a few purely hype tracks, Mingi's voice and delivery works perfectly well in plenty of situations. Inception is an example where listening to him makes me feel a ton of energy and excitement at an appropriate place in the song
I noticed while listening to ATEEZ's tracks start to finish that he does seem to be improving. On their most recent album I heard the most variety from him on more than one track, and it seems like he's clearly interested in getting better and more time and effort is only doing good things for him. Fever was a good example of his slightly more melodic sound coming out that doesn't sound just like it's him doing Hongjoong's lines for him. Thanxx probably having my favorite verse from him so far, short but dynamic, and the last two lines of To the Beat being honestly, kind of addictive in the almost slimy way he delivers them. I like that and i hope he goes into it more.
Weaknesses (this is gonna be a little brutal... Atinys proceed with caution) :
GOOD LORD he sounds the same in almost every song. This is not just a problem with his vocal tone (although that can be a factor, because his voice is almost overwhelming to other stylistic decisions he makes) but the man almost never changes it up dynamically, in his phrasing, he never really plays around with enunciation or melody to any notable extent.
SHOUTY BOYS! Which is the term i use for kpop boys who shout the majority of their rap lines and Mingi suffers from this to a pretty large extent. This is true both on wax and in live performances and it means that his dynamics are very weak in the majority of songs. Mingi seems to have exactly 3 settings: loud talking, full shouting (his default), and EXTRA LOUD SHOUTING usually reserved for live stages. There's rarely any smooth transition between these, in fact he is likely to use only one of them in any given song.
Relating to that last point, what is the worst side effect of this is that REGARDLESS of the vibe of the song Mingi remains almost identical in how he performs. As I was listening to some of their songs it would start and be a chiller more downbeat track and I'd think "oh no he's still gonna shout isn't he" and then Lo and Behold, the shouting man would enter
A particularly egregious example of this can be found in Mist, i'm not even going to timestamp to his verse, listen to that beautiful Wooyoung intro and then listen to the way he chooses to deliver his verse immediately after... someone pls try to make that choice make sense artistically. This is the true issue of having a rapper who doesn't change things up, it's not that the style he does have is out and out terrible or inappropriate in all contexts, but it simply isn't what all of their songs require. It's absolutely throws the feeling of the song out of the window and genuinely makes, what could be one of Ateez's best songs into something almost frustrating to listen to.
Here's an example where he does his loud delivery it multiple times in a song, one which works and one which doesn't just so i can demonstrate the difference. In Treasure he has this shouting high energy delivery right in that first verse when the song and instrumental hasn't moved anywhere yet. Right after he finishes the song actually starts to build for the prechorus but the energy is already off because he was SO high energy before the prechorus began. Then during the prechorus he comes back for a short shouted line which does work because that's the place you're supposed to be building up the energy. basically his energy is all over the place regardless of where in the song we are and it makes the flow of the song messy
Although his vocal tone is really recognizable it's not what I'd call uncommon. Other examples of this vocal tone in kpop are Wooseok of Pentagon, Leedo of Oneus (also in this post) and IM of MonstaX. Being a "deep voiced rapper" simply is not enough to stand out.
He consistently loses the beat during live performances often because of poor breath control and placement, here he is on MixNine sprinting after the beat and not really making it back on. Here he is doing a live street busking performance and sounding breathless after about 2 lines, i. There are songs where i really like his verse, like Dancing Like Butterfly Wings where his rap is groovy and bouncy in the official recording but when performed live he still loses the beat and can't keep his breath even... it is genuinely baffling to me to see someone sound out of breath, 4 bars in, at the START of the song, Even in recordings he sometimes has issues finding the beat like on Desire where he never seems to quite hit the right mark.
I know some people are going to get on me or feel hurt for placing him so low, it's not that I think Mingi is hopeless, untalented, or without any potential, nor do I think every bar of his is terrible when viewed in a vacuum. However I find that his parts consistently mess up the flow of the song and they tend to stick out in a negative way when viewed in the context of the track, that is why I ranked him this way but I really only hope to see him get better as time goes on.
ONEUS: Ravn + Leedo
About Oneus: Before writing this I had not listened to a full Oneus album but i'd really enjoyed their title tracks and was pretty stunned by their RTK performances. I had heard a lot about member involvement in a lot of the elements of their work, overall I was really excited for this post as a prompt for me to go and fully listen to their B-sides. Anyways all that said I am about to trash on Oneus' music a little so ToMoons I'm sorry. I have a lot of good things to say about them too, I promise. ........ ok I know I'm here to review rapping but I promise this is relevant..... the beats to the vast majority of Oneus b-side songs are quite boring and same-y like that vaguely trop-house/dancehall/electro-house sounds with a trap breakdown occasionally thrown in (there are a few exceptions obviously). Looking at the track producers it starts to make sense since most of them are RBW inhouse producers and they stay the same on most of the non-title tracks. Again I know I'm not here to do a music review but I think a big takeaway from Oneus is how much a good or great beat can elevate even a mediocre rap performance, or really pull the best possible material from its performers, and how, on the flipside boring generic beats can turn what could be a fine rap performance into something totally unremarkable. Oneus tends to have much stronger production on their title tracks but the b-sides keep almost none of that energy and it really hurts their overall ranking and ability. By FAR the most interesting officially released song they've had from and beat/rapping perspective is Crazy & Crazy which is produced by the Onewe member Cya who honestly impressed a lot, he definitely outdid the other two on that track. But this isn't about Onewe so i'll get on to actually talk about the Oneus members. Ravn: High C tier Ravn is the lead rapper for Oneus and has participated as a writer on every single song they've released thus far and participated as a producer on Hero from their debut album. He released a number of songs and projects on Soundcloud under his tag pls9ravn starting in 2017 Some of them are rap tracks, some of them are vocal covers, some instrumentals, and a lot of the originals are alongside the aforementioned CyA of Onewe. The songs tend to be lofi or related genres with a big emphasis on vibe and more laidback delivery. Ravn's voice is midtone and fairly husky. He often incorporates intentional vocal fry and melody as notable parts of his style. (On a non-rap not i'm also huge fan of the production on his instrumental SC tracks, i hope Oneus releases a whole track in that vein at some point i feel like it would really fit their vibe) Strengths:
"Ra spit out flames" is objectively the best rapper tag an Idol rapper has ever had. That's just a fact.
On his soundcloud tracks, which fall largely into the lofi/cloud/chillhop/occasional synthwave or vaporwave tracks are an excellent match to his style. Genuinely, listening through his Soundcloud was a real joy, probably the biggest treat of working on this project so far. So many gems on there and so very in my style
Ravn has shown an ability to play around with weird and unconventional deliveries like on the track flame.... i mean he's obviously taking a lot of inspiration possibly even ripping directly from other rappers like Juice Wrld (rest in peace) or Vinxen but I don't mind it. I particularly like what he does starting at 0:45 like... throwing his voice forward really suddenly, it gives the track a lot of tension and weird emotion and then into the section where he's basically just speaking with only a barely there adherence to the rhythm. It's really cool I dig it
I don't really know what the emotion of bufferingonmymind is supposed to be but I felt it
Good ability to switch flows while keeping the track continuous like here on LIKEACHEEZ (great title btw)
He has shown potential in more vibey but somewhat energetic and party oriented tracks like here on Billboard. Admittedly i think the vocal effects are a little over the top on this one but i would absolutely vibe to this song while getting drunk no question. Similarly Like a has an excellent vibe. Eraser sounds like it could be a jhope solo release for all that bouncy energy. And Good life is meant for smoking a blunt by the beach. All of these songs have such excellent and clearly defined vibes and Ravn's production and voice work very well in tandem.
Ravn on some of Oneus' groovier tracks is excellent. That's clearly the lane he is most comfortable, well-versed and personally interested in and it shows, he thrives on songs like Plastic Flower Plastic Flower is easily my favorite he's ever sounded on a full group track, but the second verse of Hide and Seek shows this off as well.
Ravn is one of the only idol-rappers whose shouting voice i like, heard in his opening in Warriors Descendent he uses it as an occasional tool like god intended. it's very effective and piercing I actually wouldn't mind if he used this more in the future s p a r i n g l y
I'll mention this with Leedo as well but I think the C rating might be misleading when it comes to the ability he's shown. The issue is not that Ravn doesn't have talent nor that there isn't proof of his talent out there. I really do think his work releasing work independently speaks very well to his creativity and ability, it just isn't the whole story.
Even his most exciting and experimental choices are well within the lane of expected flows and deliveries. I won't call them totally basic but i think he has potential to push the envelope more than he does. A good example is his verses in Come Back Home which had a lot more potential than he pulled out of them. There's something to be said for making the most of every line but I feel like Ravn has a rather unfortunate amount of throwaway verses for someone of his talent level.
I often feel like Ravn is floating somewhere over the beat rather than fully sinking into it. I don't really have an example for this it's just something i notice.
One of his best verses, Crazy & Crazy, commits the cardinal sin of using "hakuna matata" in his lyrics and then trying to end the line with "bibitibobity boo" which not only doesn't rhyme, but also sounds corny as hell. The rest of the verse is great but that ending does spoil it a bit.
When he tries for that real ~emotional~ delivery it lacks almost any real punch and mostly sounds very cheesy, other emotional songs see him falling into the same problem i mentioned with Hongjoong of sounding sort of unenthused rather than any other emotion, his verse in Now is a good example it just sounds very impersonal and unemotional overall.
He also suffers from something very common to idol rappers which is that, they might be able to do one style well or even really well, but they lack a lot in the way of versatility and struggle to find a place within the music their group makes. The job of kpop artist is being able to adapt to different contexts, and Oneus has a very clear sonic signature which I don't think Ravn has found a way to thrive in or fully adapt to. That to me is a major issue and severely downgrades where he could be.
Leedo: High D tier Leedo is ... apparently the Main Rapper (i assumed that was Ravn but idk) apparently NOT a lead dancer, and also can sing like this!!! Basically the man is full of surprises. He has written lyrics for every Oneus track on which he has appeared and also featured on some predebut soundcloud releases with Ravn and Cya. He is a deep voiced rapper with about half and half melodic and straight delivery and a powerful but more restrained style. Strengths:
Leedo seems to have a strong sense of musicality and quite a bit of creativity. Although as I said, many Oneus tracks are pretty bland in basic in production and don't lend themselves as well towards experimentation of the performers, when given the chance Leedo has shown an aptitude for coming up with new ways to deliver. He plays around with melodic delivery, he has a lot more dynamic range than one might expect, and he doesn't rely 100% on his deep voice as the main or only feature of his rapping. That said his voice is a feature he uses, Light Us being a good example of him using it to good effect and atmosphere.
On the topic of musicality he's very responsive to the type of track he's rapping on. His Lit verse is very well paced and full of excellent little details and changeups that make it really quite fun to listen to.
Despite having a voice that would lend itself strongly to shouty boy rap, Leedo is actually very non-shouty for the most part. Like his verse in Now is nothing revolutionary but i was 100% anticipating full yell power and instead got a pretty good little segue section.
There's a real sleepy quality that he can take on, tracks like wrkwrkwrk at 2:15 show this off. It's not fully developed at this point but it's something I'm interested to see him play with more and a cool direction to hear him go in.
Leedo on a fucking OLD SCHOOL EAST COAST BEAT i actually screamed. the track Sh#t is the shit, VERY similar in sonics to A Tribe Called Quest's Electric Relaxation but I don't care. the beat, the delivery, the way the two of them contrast, the whispered refrain. MORE OF THIS GOD PLEASE MORE OF THIS, more of this in Kpop more of this for Leedo and Ravn pls i am begging
His more melodic deliveries are some of his most enjoyable probably because Leedo is, as discussed, a really great vocalist, Crazy & Crazy being probably him at his best in this respect. It's very pleasing to listen to but his work with Cya in general usually hits the mark on melodic flows
Honestly he's probably the one on this list that surprised and impressed me the most and the one i see the most potential in. I don't think it shows in the rating but I actually find a lot of his work quite enjoyable and I see him growing and pushing himself. So for me a Mid-D just represents where I think he is RIGHT NOW with the tracks they've released thus far, but I wouldn't be surprised to see him get a lot higher than that
Although I can sit here and praise his delivery on the best tracks, the fact is that the vast majority of Oneus' catalog is not that. For every good performance that i referenced here there are 4+ absolutely forgettable songs with forgettable deliveries. The songs being bland is not completely an excuse for the rappers to be bland. It's obvious to me that they do their best work when they have a song or instrumental that pushes them to be creative, but without that drive Leedo simply slips back into being a low-tone rapper without much of a trademark.
I think his flows and experimentation are still quite rudimentary for the most part and his individual style is limited on the majority of tracks. In many cases this is to the point that he could be mistaken for other rappers of a similar ilk like Felix or Mingi.
Even on his best tracks Leedo has not shown an overall aptitude towards emotional delivery.
This list of weaknesses might seem rather short for someone in D-tier, but i'm going to lay out his main issue: while Leedo has great potential he just doesn't have an established and consistent individual voice. I'm not going to take the time to link a bunch of things that aren't there, instead i'm just going to link a bunch of songs that i think show what i'm talking about which is a general lack of a uniqueness or ability to really stand out on the track:
This is his biggest problem by far in my opinion, and if he can overcome that and find his individuality more consistently I think he has really excellent potential. He's already shown potential and ways in which his voice can differ from others, but he needs to be confident enough to commit to it and actually take some risks in order to actually reach the potential he has. This is probably a note that could be given to a lot of idol-rappers but its one i think that is particularly apt in Leedo's case.
A.C.E: Wow + Byeongkwan
About ACE: First of all this is one of my favorite groups, so if you were wondering whether I'm willing to talk smack on my faves hopefully this section answers that question. ACE has a much smaller discography than others but they also tend to be much less keyed into one particular concept and have gone all over the place in both title and bside tracks Additionally with only a few exceptions, members have not yet expressed much interest for lyric writing or production. The only song where I saw any writing credit to the members is Wow on Take Me Higher. Wow: Mid/High D tier Wow's official position besides main rapper is main performer and that is where much of his strength as an idol lies, he is a really dynamic and talented performer. As a rapper he has a mid to low tone and a pretty straightforward style of delivery usually not melodically driven and usually fairly lowkey. Strengths:
Probably Wow's best strength and the thing that makes him (to me) much more enjoyable to listen to than even some B tier rappers is that he has a good sense of dynamic control and really good sense of a songs energy at a particular moment and has good sense in how to match that through his delivery.
Some examples of this are Holiday with a more laid back delivery, Take Me Higher where Wow performs the bridge is a great display of less in-your-face sort of confidence (and his best verse to date by quite a sizable margin), and Savage is a good example of him using both a softer delivery initially and then later a full volume/energy delivery for the benefit of the song. He also manages to rhyme Meenie Miny Moe, Kawi Bawi Bo, and Rock and Roll without it being a total cringefest. WOW!
He has a very pleasant slightly husky mid-tone voice to listen to which lends itself well to delivery and fits into ACE's songs nicely. I never feel undersold by his lines in their songs nor do I feel that they are misplaced. In other words, he feels comfortable in his role, he's not overly forcing it, and his sections don't feel awkwardly short or awkwardly delivered. Under Cover is a good example of this, he puts just enough individual flair on it that it stands out, but it's not overbearing and it doesn't overstay its welcome.
Even his longer sections flow nicely. Here's a section from If You Heard where he goes for !!!!8 bars!!!! there's nothing really stand out about it but it really works in the song and transitions in and out nicely.
Wow is really good at emotional delivery overall and his rap is surprisingly adept at it too. Even if the bars aren't complicated they do a good job conveying the overall feeling of the song. So Sick is like half rap half sung but it's a good example of this.
Wow's main weakness is that he doesn't seem to have any desire to go beyond the bare minimum of rhythmic delivery. His flows are very easy and predictable, Almost every weakness I could name, could be summed up as: he's doing basic stuff in a basic way. He's not pushing any boundaries. And technically when it comes to his abilities in speed, rhyming, wordplay or use of emphasis and alliteration he's simply not playing the game. His focus is purely on presentation, not technical skill.
Although I mentioned his dynamics being his strongest suit, there are times when he loses grips on this. Black and Blue is a great example, he goes full shouty boys on this track and it's exactly what that instrumental doesn't need and it's weird because he almost never does this otherwise. Truly a baffling decision. but you can't win them all.
There's plenty of boring stuff that he does when the song doesn't have a clear emotional edge or conceptual backing. In Holiday he has twoverses that sound nearly identical and go nowhere. This is where being very unobtrusive is a real fault because that track needed some spice that Wow simply could not provide.
Wow is like tofu, if there is not already spice (via the song) he will sound very bland, if there is spice he will soak it up and take on the correct flavor of the dish but he does not bring the spice.
Unlike the other folks i've talked about in this post, i don't get the sense that Wow is actively and aggressively trying to get better as a rapper. I don't notice a great deal of improvement over releases and I don't really expect to going forward. I think he's in a comfortable enough spot and not really interested in experimentation as a rapper. He's always getting better as a performer but I think rap is very secondary for that. It's not surprising and honestly, he could stay at this level and it wouldn't really effect the overall quality of any of their songs.
Byeongkwan: E tier Byeongkwan is perhaps the best representation this post has of "dancer who they made a rapper because they needed a second rapper", he's not outwardly awful... sometimes???, but rapping is clearly not his passion. Byeongkwan is an EXCEPTIONALLY good dancer (put him in your 4th gen top 10 cowards!!!) and he's also a really skilled vocalist, so the rapper role feels especially secondary for him. Still, he's rapped enough times on enough tracks that it deserves comment Strengths:
Like the majority of dancers-turned-rappers in kpop Byeongkwan has a very well developed rhythmic sense and tends to find the pocket without trouble. Now... does he do anything interesting or good in the pocket? No. But you cannot deny that he's in it :)
Because of Byeongkwan's unique vocal tone I actually think the less he tries at rapping the more he sells it. So there are parts of Savage where... I don't know if he's technically rapping or not but his delivery is somewhere in between rap and vocal and those parts work well for the vibe of the song like here, or here in If you Heard where he acts as a segue and it's nice.
One time he did this and it was pretty good but i can't find the full performance and also it's a cover
Unfortunately Byeongkwan does not write his own raps and the raps that he gets are... so basic. Painfully basic. That combined with the fact that his delivery skills are preschool level makes for a lot of uninteresting sections to songs
When BK really puts it on as a rapper he sounds like a try-hard in the truest sense. That opening verse to Under Cover..... wacks up the beginning of an otherwise perfect song, it's rough, it's trying way too hard, it is not doing a great job of selling it
Dynamics emotional delivery and variety are almost non-existent across tracks. After saying Wow had pretty good emotional sense on So Sick here's BK's verse, very flat in comparison with no emotional edge to it whatsoever.
I am not going to absolutely cream this man into the ground because A) he actually doesn't rap that much overall and B) he doesn't really present himself as a rapper. His inclusion here is really only because someone requested it and all i have to say about him is... rapping is like 4th on his list of roles (1: dancer, 2: vocalist 3: best boy 4: rapper) so..... I hope he stays being vast majority a vocalist!!!! Pls!!!
Considering swapping my S63 Coupe for an AMG GTR or 4-door GTS.. thoughts?
Hi all, TL;DR: Thoughts about trading a '20 S63 coupe with ~3600 miles (maybe up to 4k before I'd trade) for a '20 AMG GTR w/ 4500 mi or a 4-door GTS with around 5500 miles? It would be at an even or near-even trade value (one dealer asked for $10k plus trade, though I feel like I'd negotiate to half that tops, and really am aiming for a straight up trade). I now have an S560 which makes the luxury of the S63 a bit redundant and makes the sports car nature of the GT appealing.. So some might remember my posts around the time I took delivery of my '20 S63 Coupe back in May, most probably don't, but I was thrilled to get it and finally step up to an AMG model, and a particularly nice one at that. Fast forward 3-4 months later and I still love the car, but unexpectedly, my girl decided she'd rather a sedan than an SUV as she'll be driving my second car / it'll be unofficially hers, and once she decided on a sedan we both came to love the look, amazing comfort and price of a '20 S560. You can probably guess what I'll say next: This has opened up the option in a realistic way of switching my car to a CPO '20 AMG GT R (4500 mi) or the 4-door '20 GT S (5500 mi) - which for some reason I like despite looking like a panamera, maybe partially because of its cool back seat screen thing and general ability to hold 4 people in what still feels very coupe-y - Though I'm definitely leaning more towards the GT R if I were to trade my S63 (3600 mi) for one of these options. I'm liking it because it's just soo much more of a sports car than the S63, which is a great luxury cruiser, I have zero complaints, but for a long drive I now unexpectedly have a new S560 sedan that provides all the same comforts and tech of the S63C4 if not the manic power. The GTs provide a completely different look inside, button layout etc., which is nice, definitely more of an eye-catching look, which I'm split on as the S63 is kind of a sleeper as far as benzes go, but at least would feel like a different car when hopping into the 560 from the 63 or vice versa. Obviously in the end it'll come down to what feels right, but as I've yet to even drive the GT R (as, understandably, they want to be sure someone is very interested before letting miles add up on the odometer, and in the interest of a good relationship with the dealer I only want to test drive them if I'm certain I'm interested), I'm unsure if it's as fun as it seems or if I'd still be missing some aspects of the S63. I'll say a bit more of my thoughts on it but you can comfortably skip the next paragraph without missing much and get to the point of the post, my questions related to this. Definitely interior looks aren't gonna be my exact taste - I love my saddle brown and black piano flowing lines trim, and hated carbon on the S63, though it does feel much more appropriate on the GT which is good since almost all of them have carbon trim. The GTR I'm looking at has a nice yellow stitching / yellow seatbelts and yellow brake caliper theme going on that matches the very central TCS knob well, and while for some reason it has the center screen disconnected from the dash, unlike the GT S, it looks a lot better than the older standalone screens that looked like ipads glued to the dash. The central button and infotainment navigation area looks nice and is way different than the S's, and it seems to have most of the amenities I like most like the active seat bolstering, multi color multi zone LEDs, Burmeister surround, HUD, 360 parking cameras, etc. etc., plus I think the GT R (but not the S? I gotta double check) beats the S63 to 60 by .1 or .2 sec, and I'd guess both handle far less like the boat the S63 is, albeit a very fast one. Since I work from home and my girl doesn't really work by any normal definition (lol), I also don't have to worry about space as it'll always be an option to hop into the 560 for shopping trips, errands etc.. So assuming I decide I like the idea enough and am sold by the test drive, there are just a few considerations I'm hoping to get some input on. The dealer with the GT S made an initial offer of the trade +10k for the car which is listed at $158,000, and I haven't got a solid offer from the GT R dealer though the salesman estimated a trade value of about $150 and the GT R is listed about $160k. Ideally if I went for either I'd do a straight up trade, though I have a feeling they'll insist on getting at least 3-5k minimum out of the trade; the GT S also has the ugliest wheels I've ever seen so it's possible by giving them some profit margin on new wheels I could get that down. Since the cars are all 2020 and both were traded in by regular customers that like switching cars often, I feel like this isn't a bad deal, especially considering what a new GT R costs and the fact that I negotiated the new S63 coupe down to $177 from a $194k sticker, so getting one within a couple thousand miles that likely cost north of $200k even after negotiations seems like a decent deal. Any thoughts are welcomed though. There's also a point one dealer brought up that I'm not sure I buy - he commented on how the S63 coupe will be done soon and never made in the styling line it's been at since 19 and which is a really beautiful look, and suggested due to the relative scarcity of the S63 coupes that it has a decent potential to hold it's value far better than something common and with undeniably better new versions - I've seen the taillights they're trying next year and I think they're going to ruin the S line's styling. However, the idea of appreciation on a new Benz is absurd, so at best we'd be talking about it holding a value between 125-150 with low mileage longer than it otherwise would. I think the GT R and certainly the GT S are hard enough to come by that this really won't be much of a factor and by trading for the GT R especially, it gets the honor of being widely considered a "supercar" and so I'd think would, if anything. hold up in value better than my car if the mileage is kept pretty low - though if they are willing to give me nearly the ask for the GTs in trade, I guess that means at the moment the S63 is considered more valuable? Anyway I've rambled enough.. so what would you do? Leave the comfort to the S560 and go for a more pure sportscar (I've always wanted to but have still needed space for groceries etc.), or a 4 door version, or just keep the S63 I know and definitely am very fond of. If my second car was anything but another S class I think I'd no question keep it, but now it almost feels redundant and if I'm going to put the miles on the 560, which I definitely plan to do, it opens up the opportunity of driving a GT mainly for fun. Sorry for the length... Kinda processing my own thoughts here too lol.
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