CALL INVITE
We we hope you can join us on Thursday, October 7th at 12:30pm ET for our Black Book presentation on new Best Idea Short Americold Realty Trust (COLD). We wish we had gotten this one on the Best Idea List sooner, given the massive downward guidance revision delivered on 9/21. We figured it was most likely that any bad news would be delivered along with 3Q21 earnings, so just another example of how it is impossible to time everything! As Mike Tyson said, "Everyone has a plan, until you get punched in the face." At least COLD was sitting on the Short Bias List, as we suspected COLD's business model (which is fine and very interesting longer-term, by the way) was setting up for downside risk in the current operating environment.
With that said, COLD is and should be in the doghouse. Let's be honest, there has been "creep" in the messaging since the beginning of the year. It went from "labor will not be an issue and don't worry about it," to "the labor situation is only impacting our customers" paired with a modest trim to revenue guidance, to "labor is hitting our top line, our costs are rising, and oh by the way here is a ~15% cut to FY21 guidance with only three months remaining in the year." On the one hand, that speaks to the volatility and speed of deterioration in the food/commodity complex and rising labor costs. On the other hand, a late-3Q ~15% cut to in-the-year guidance makes it look like you don't know how to forecast your business. Either way, the stock will underperform with SIGNFICANT downward estimate revisions forthcoming. This is what we will explore on 10/7, including the possibility that consensus FY22 AFFO estimates STILL need to come down ~10-15% from here. Just FYI, COLD guides to AFFO vs. Core FFO.
EVENT LINK: CLICK HERE (video, dial-in, materials links)
KEY PRESENTATION TOPICS
- Introduction
- Position Monitor review
- Macro & GIP Quads
- Short COLD
- Overall thesis
- Potential downward earnings revisions
- Upside / Downside analysis from here
- IRR analysis
- Long-terms earnings power
- Review of business segmentation
- History of external growth through acquisitions
- USDA commodity data and other macro drivers
- Appendix:
- Earnings model
- Q&A
Please call or e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
Cell:
