Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

<ul>
<li>Ubiquiti showcased a rebound in its business in the June 2022 quarter with revenue rising by nearly 24 percent from the March 2022 quarter</li>
<li>Ubiquiti reported fiscal fourth quarter revenue of $443.1 million compared to our estimate of $387.0 million</li>
<li>The increase in revenue during the June quarter suggests demand remains healthy enough to put Ubiquiti back on pace for potentially exceeding $500 million in revenue in a single quarter</li>
</ul>


Ubiquiti showcased a rebound in its business in the June 2022 quarter with revenue rising by nearly 24 percent from the March 2022 quarter
Ubiquiti reported fiscal fourth quarter revenue of $443.1 million compared to our estimate of $387.0 million
The increase in revenue during the June quarter suggests demand remains healthy enough to put Ubiquiti back on pace for potentially exceeding $500 million in revenue in a single quarter


Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>Sales declines, margin compression, cuts in SG&amp;A and cuts in guidance and estimates feature in our Declining Businesses model. </li>
<li>Declining business shorts tend to be lower beta, have longer time horizons, and tend to produce steadier (although slower) short returns.</li>
<li>Today we are flagging PRA Grp, Herbalife, DISH, DXC Tech, Corsair Gaming, Ubiquiti .</li>
</ul>


Sales declines, margin compression, cuts in SG&amp;A and cuts in guidance and estimates feature in our Declining Businesses model. 
Declining business shorts tend to be lower beta, have longer time horizons, and tend to produce steadier (although slower) short returns.
Today we are flagging PRA Grp, Herbalife, DISH, DXC Tech, Corsair Gaming, Ubiquiti .


Declining Business Short Candidates: PRA Grp, Herbalife, DISH, DXC Tech, Corsair Gaming, Ubiquiti

<ul>
<li>This model uncovers companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.</li>
<li>The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. </li>
<li>Breaking Estimates stocks often continue to decline after the cuts.  This week we flag:  Nutanix, Upstart, Ubiquiti, Corsair Gaming</li>
</ul>


This model uncovers companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. 
Breaking Estimates stocks often continue to decline after the cuts.  This week we flag:  Nutanix, Upstart, Ubiquiti, Corsair Gaming


Breaking Estimate Short Candidates: Nutanix, Upstart, Ubiquiti, Corsair Gaming

<ul>
<li>The supply chain issues that became an obstacle for Ubiquiti (UI) have yet to abate. Ubiquiti missed fiscal third quarter (March) estimates with a meaningful decline in service provider revenue</li>
<li>The Company burned through inventory in the quarter and used its cash flow to aggressively repurchase shares</li>
<li>Ubiquiti’s foray into services should broaden the revenue stream and improve cash flow, but it could be another few quarters before this becomes a needle moving endeavor</li>
</ul>


The supply chain issues that became an obstacle for Ubiquiti (UI) have yet to abate. Ubiquiti missed fiscal third quarter (March) estimates with a meaningful decline in service provider revenue
The Company burned through inventory in the quarter and used its cash flow to aggressively repurchase shares
Ubiquiti’s foray into services should broaden the revenue stream and improve cash flow, but it could be another few quarters before this becomes a needle moving endeavor


<ul>
<li>UI continues to face supply chain challenges in meeting demand. Ubiquiti reported fiscal second quarter (December) results missing our estimates while inventory continued to increase</li>
<li>First, service provider revenue declined further after what we thought was a depressed level in the September quarter. Second, freight expenses caused gross margin to decline faster </li>
<li>Even though enterprise revenue rose sequentially in the quarter, it was not enough to offset the erosion in service provider revenue</li>
</ul>


UI continues to face supply chain challenges in meeting demand. Ubiquiti reported fiscal second quarter (December) results missing our estimates while inventory continued to increase
First, service provider revenue declined further after what we thought was a depressed level in the September quarter. Second, freight expenses caused gross margin to decline faster 
Even though enterprise revenue rose sequentially in the quarter, it was not enough to offset the erosion in service provider revenue


UI: Earnings Compression Before Price Inflation

United States

Ubiquiti Inc. provides wireless networking products and solutions. The Company offers radios, antennas, and management tools that have been designed to deliver carrier class performance for wireless networking and other applications in the unlicensed radio frequency. Ubiquiti operates in the State of New York.

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Ubiquiti Inc. (UI US)

UI: Revenue Rebounds, Target to $375

UI experienced a rebound in revenue and earnings in its fiscal Q4 (June), which we believe should continue into subsequent quarters. UI has...

BWS Financial Inc

Declining Business Short Candidates: PRA Grp, Herbalife, DISH, DXC Tech, Corsair Gaming, Ubiquiti

Declining business shorts pursue profit by following negative business momentum. Today we are flagging PRA Grp, Herbalife, DISH, DXC Tech,...

Eric Fernandez, CFA

Breaking Estimate Short Candidates: Nutanix, Upstart, Ubiquiti, Corsair Gaming

This model uncovers companies facing recent declines in estimates. This week we flag: Nutanix, Upstart, Ubiquiti, Corsair Gaming

Eric Fernandez, CFA

UI: Shrinking Float Thru Buybacks

UI has been aggressively buying back stock resulting in a float that has shrunk meaningfully since last year. We anticipate a turnaround with...

BWS Financial Inc

UI: Earnings Compression Before Price Inflation

UI experienced a significant drop in operating margin due to lack of product available to ship and higher freight costs. Having more inventory to...

BWS Financial Inc

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