Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Dick's Sporting Goods Inc. is demonstrating strong performance as evidenced by its Q1 2024 results, driven by its strategic focus on an omnichannel athlete experience, differentiated product assortment, deep engagement with the Dick's brand, and commitment to creating a best-in-class teammate experience.</li><li>This quarter's sales increased by 6.2% to just over $3 billion, and comparable sales saw an uptick of 5.3%.</li><li>Additionally, growth was recorded in cross-channel transactions, indicating more purchases from athletes and an increase in average ticket expenditure compared to previous years.</li></ul>

Dick's Sporting Goods Inc. is demonstrating strong performance as evidenced by its Q1 2024 results, driven by its strategic focus on an omnichannel athlete experience, differentiated product assortment, deep engagement with the Dick's brand, and commitment to creating a best-in-class teammate experience.This quarter's sales increased by 6.2% to just over $3 billion, and comparable sales saw an uptick of 5.3%.Additionally, growth was recorded in cross-channel transactions, indicating more purchases from athletes and an increase in average ticket expenditure compared to previous years.

DICK'S Sporting Goods Inc.: Expansion of GameChanger Program & Other Major Drivers

<ul><li>This is our first report on DICK'S Sporting Goods.</li><li>The leading sports goods and outdoor retailer is significant in its sales growth, paired with its impressive development project, House of Sport.</li><li>Full year sales reached $13 billion, marking a notable increase in market share.</li></ul>

This is our first report on DICK'S Sporting Goods.The leading sports goods and outdoor retailer is significant in its sales growth, paired with its impressive development project, House of Sport.Full year sales reached $13 billion, marking a notable increase in market share.

DICK'S Sporting Goods: Initiation Of Coverage - Is There Anything Unique About Their Business Strategy? - Major Drivers

President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

Shenzhou Intl Group Holdings / Equity Bottom-Up

<ul>
<li>Key customers &amp; their retail partners battling excess inventory, waning consumer demand, and market share losses in certain geographies</li>
<li>Plans for capacity expansion amid demand uncertainties and alt data and macro picture may prove aggressive and along with risks of reshoring/nearshoring &amp; friend-shoring may prove margin dilutive</li>
<li>Consensus expectations for 2H23 and 2024 appear overly optimistic and valuation is not cheap given the growth profile</li>
</ul>


Key customers &amp; their retail partners battling excess inventory, waning consumer demand, and market share losses in certain geographies
Plans for capacity expansion amid demand uncertainties and alt data and macro picture may prove aggressive and along with risks of reshoring/nearshoring &amp; friend-shoring may prove margin dilutive
Consensus expectations for 2H23 and 2024 appear overly optimistic and valuation is not cheap given the growth profile


Shenzhou (2313 HK): Contract Mfr for Leading Sportswear Brands Facing Challenging Demand Outlook.

High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Thematic (Sector/Industry)

<ul><li>After breaking above the bear market trend line resistance area, last week’s banking sector contagion fears, spotlighted by Silicon Valley Bank’s (SVB) collapse, pushed the S&amp;P 500 back below its 200 day moving average on high volume.</li><li>Startup-focused lender SVB Financial Group is the largest US bank failure since 2008 and was the 16th biggest in the U.S. at the end of last year with about $209 billion in assets.</li><li>Silicon Valley Bank's failure is the largest since Washington Mutual went bust in 2008.</li></ul>

After breaking above the bear market trend line resistance area, last week’s banking sector contagion fears, spotlighted by Silicon Valley Bank’s (SVB) collapse, pushed the S&amp;P 500 back below its 200 day moving average on high volume.Startup-focused lender SVB Financial Group is the largest US bank failure since 2008 and was the 16th biggest in the U.S. at the end of last year with about $209 billion in assets.Silicon Valley Bank's failure is the largest since Washington Mutual went bust in 2008.

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>This model seeks companies that are potentially “overearning”, defined as companies with unusually high margins relative to their own history or relative to the industry.</li>
<li>The reasons for the margin increases are sometimes unsustainable or fraudulent. The  critical judgement involves to what extent unsustainable margins are embedded in a company’s forecasts and/or the stock’s valuation. </li>
<li>These shorts tend to have moderate to higher betas, higher valuations due to recent strong results and good short responses to subsequently disappointing earnings.</li>
</ul>


This model seeks companies that are potentially “overearning”, defined as companies with unusually high margins relative to their own history or relative to the industry.
The reasons for the margin increases are sometimes unsustainable or fraudulent. The  critical judgement involves to what extent unsustainable margins are embedded in a company’s forecasts and/or the stock’s valuation. 
These shorts tend to have moderate to higher betas, higher valuations due to recent strong results and good short responses to subsequently disappointing earnings.


Overearning Short Candidates:  Groupon, Dick's Sporting, Dillards, Johnson & Johnson

United States

Dick's Sporting Goods, Inc. operates as a sporting goods retailer that manages stores primarily in the eastern and central United States. The Company owns stores that offers a broad selection of brand name sporting goods equipment, apparel, and footwear.

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Dick's Sporting Goods (DKS US)

DICK'S Sporting Goods Inc.: Expansion of GameChanger Program & Other Major Drivers

Dick's Sporting Goods Inc. is demonstrating strong performance as evidenced by its Q1 2024 results, driven by its strategic focus on an...

Baptista Research

DICK'S Sporting Goods: Initiation Of Coverage - Is There Anything Unique About Their Business Strategy? - Major Drivers

This is our first report on DICK'S Sporting Goods. The leading sports goods and outdoor retailer is significant in its sales growth, paired with...

Baptista Research

Shenzhou (2313 HK): Contract Mfr for Leading Sportswear Brands Facing Challenging Demand Outlook.

Consensus estimates do not account for customer, retailer, Asian market share shift, macro, alt data and geopolitical risks.

Robert C Prather Jr

Weekly Stock Bullfinder - Week of 3/13

Startup-focused lender SVB Financial Group is the largest US bank failure since 2008 and was the 16th biggest in the U.S. at the end of last year...

Weekly Stock Bull Finder

Overearning Short Candidates: Groupon, Dick's Sporting, Dillards, Johnson & Johnson

Margin over-earners are fertile hunting ground for shorts if the reasons for the margin increase are either unsustainable or fraudulent.

Eric Fernandez, CFA

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