Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Equity Bottom-Up

<ul>
<li>This model looks for slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance, among other characteristics.</li>
<li>The key judgement is whether a slowdown is temporary or the beginning of a trend.  These shorts tend to have high valuations and betas.  Multiple compression accelerates the stock’s decline.</li>
<li>Today we are flagging MercadoLibre, Outset Med, Universal Display, Dexcom</li>
</ul>


This model looks for slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance, among other characteristics.
The key judgement is whether a slowdown is temporary or the beginning of a trend.  These shorts tend to have high valuations and betas.  Multiple compression accelerates the stock’s decline.
Today we are flagging MercadoLibre, Outset Med, Universal Display, Dexcom


Breaking Growth Short Candidates: MercadoLibre, Outset Med, Universal Display, Dexcom

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/phc-holdings-corp" target="_blank" data-smartkarma-citation="entities:34198:1" rel="noopener">PHC Holdings (6523 JP)</a> is a diversified healthcare company, which serves ~$25 billion broader end-market, of which global glucose monitoring is the largest end-market.</li>
<li>The company’s diabetes management business is the highest margin earning segment and is poised to grow through expanding presence in continuous glucose monitoring system.</li>
<li>PHC can be an early investment idea as a passive play on the fastest growing segment of the global diabetes management segment ahead of its global launch of next-generation CGM.</li>
</ul>



PHC Holdings (6523 JP) is a diversified healthcare company, which serves ~$25 billion broader end-market, of which global glucose monitoring is the largest end-market.
The company’s diabetes management business is the highest margin earning segment and is poised to grow through expanding presence in continuous glucose monitoring system.
PHC can be an early investment idea as a passive play on the fastest growing segment of the global diabetes management segment ahead of its global launch of next-generation CGM.


PHC Holdings (6523 JP): Eyeing a Bigger Pie of Global Diabetes Management Solution

<ul>
<li>
<a href="https://www.smartkarma.com/entities/abbott-laboratories" target="_blank" data-smartkarma-citation="entities:11987:1" rel="noopener">Abbott Laboratories (ABT US)</a> Q4 revenue and adjusted EPS beat consensus. Global COVID-19 testing-related sales were $2.3 billion, ahead of consensus of $1.3 billion.</li>
<li>Management provided conservative guidance for 2022 COVID-19 testing revenue of $2.5 billion, which is expected to be updated on a quarterly basis.</li>
<li>Abbott expects its medical devices business on a normal run rate in H2 2022. However, its diabetes care portfolio remained resilient and grew faster than the nearest competitor.</li>
</ul>



Abbott Laboratories (ABT US) Q4 revenue and adjusted EPS beat consensus. Global COVID-19 testing-related sales were $2.3 billion, ahead of consensus of $1.3 billion.
Management provided conservative guidance for 2022 COVID-19 testing revenue of $2.5 billion, which is expected to be updated on a quarterly basis.
Abbott expects its medical devices business on a normal run rate in H2 2022. However, its diabetes care portfolio remained resilient and grew faster than the nearest competitor.


Abbott Laboratories (ABT US): Q42021 Review- Conservative Guidance Leaves Room For Upside Potential

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

MicroTech Medical Hangzhou / Equity Capital Markets

MicroTech Medical is a China-based diabetes management medical device company. The company launched book building to raise up to USD 226m via a Hong Kong listing.In our previous note, we discussed that the company's core product insulin patch pump system (Equil) has received NMPA approval in 2018 and EU's CE marking in 2017. It has design features that are more appealing than both the tubed players as well as the patch pump competitors. Having said that, we note that the insulin pump market is competitive and the company's sales data after product launch is far from being ideal. The company's pre-IPO investor is decent. The management team has relevant product development experience but is not considered a superstar team. We also provide a forecast for the company's main products and our thoughts on the pre-money valuation.In this note, we also provided an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

MicroTech Medical is a China-based diabetes management medical device company. The company launched book building to raise up to USD 226m via a Hong Kong listing.In our previous note, we discussed that the company's core product insulin patch pump system (Equil) has received NMPA approval in 2018 and EU's CE marking in 2017. It has design features that are more appealing than both the tubed players as well as the patch pump competitors. Having said that, we note that the insulin pump market is competitive and the company's sales data after product launch is far from being ideal. The company's pre-IPO investor is decent. The management team has relevant product development experience but is not considered a superstar team. We also provide a forecast for the company's main products and our thoughts on the pre-money valuation.In this note, we also provided an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

MicroTech (微泰医疗) IPO: Demanding Valuation Despite a Decent Story

MicroTech Medical, a China-based diabetes management medical device company, plans to raise up to USD 300m via a Hong Kong listing.In our previous note, we discussed that the company's core product insulin patch pump system (Equil) has received NMPA approval in 2018 and EU's CE marking in 2017. It has design features that are more appealing than both the tubed players as well as the patch pump competitors. Having said that, we note that the insulin pump market is competitive and the company's sales data after product launch is far from being ideal. The company's pre-IPO investor is decent. The management team has relevant product development experience but is not considered a superstar team.In this note, we provide a forecast for the company's main products and our thoughts on the pre-money valuation.

MicroTech Medical, a China-based diabetes management medical device company, plans to raise up to USD 300m via a Hong Kong listing.In our previous note, we discussed that the company's core product insulin patch pump system (Equil) has received NMPA approval in 2018 and EU's CE marking in 2017. It has design features that are more appealing than both the tubed players as well as the patch pump competitors. Having said that, we note that the insulin pump market is competitive and the company's sales data after product launch is far from being ideal. The company's pre-IPO investor is decent. The management team has relevant product development experience but is not considered a superstar team.In this note, we provide a forecast for the company's main products and our thoughts on the pre-money valuation.

MicroTech (微泰医疗) Pre-IPO: Thoughts on Valuation

United States

DexCom Inc. is a medical device company focused on the design and development of continuous glucose monitoring systems for people with diabetes.  The Company has developed a small implantable device that continuously measures glucose levels in subcutaneous tissue just under the skin, and a small external receiver to which the sensor transmits glucose levels at specified intervals.

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Dexcom Inc (DXCM US)

Breaking Growth Short Candidates: MercadoLibre, Outset Med, Universal Display, Dexcom

Breaking Growth stocks combine declining fundamentals with a multiple compression. This week we flag: MercadoLibre, Outset Med, Universal Display,...

Eric Fernandez, CFA

PHC Holdings (6523 JP): Eyeing a Bigger Pie of Global Diabetes Management Solution

Ahead of the global launch on Senseonics’ next-generation implantable CGM in Q2 2022, we are bullish on the long-term growth prospect of PHC.

Tina Banerjee

Abbott Laboratories (ABT US): Q42021 Review- Conservative Guidance Leaves Room For Upside Potential

Strong base business, conservative 2022 guidance leaving room for upside potential, cadence of new product launches, and resilient pockets of...

Tina Banerjee

MicroTech (微泰医疗) IPO: Demanding Valuation Despite a Decent Story

We provided an update for the book building of MicroTech Medical which sells diabetes management products including patch insulin pump (Equil) and...

Ke Yan, CFA, FRM

MicroTech (微泰医疗) Pre-IPO: Thoughts on Valuation

In this note, we provide a financial forecast for the MicroTech's main products (Equil, BGMS, CGMS) and our thoughts on the pre-money valuation.

Ke Yan, CFA, FRM

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