Room to raise the ceiling: management says its own prices, rates, or terms sit below what the market would currently bea
The model's full reasoning — Q3 2018 call → NOWe need to determine if management conveys that the company is currently charging less than what the market would bear, and that it is actively closing that gap. The transcript is about Great Elm Capital Corp., a business development company. They invest in debt securities. The "pricing" here would be the interest rates or yields they charge on loans, or the prices at which they buy/sell securities. But the question is about the company's own pricing for what it sells. Great Elm sells capital (loans) and maybe its own shares? Actually, they are an investment company. They deploy capital into loans. The "price" they charge is the interest rate on loans. But the transcript doesn't discuss them raising interest rates on existing loans or closing a gap between what they charge and what the market would bear. They discuss deploying capital at certain yields, but that's about new investments. They also discuss their own distribution rate (dividends) but that's not pricing. The question asks: "does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully below the value customers are getting or below what the current market would support — AND that the company has already begun, or is now actively beginning, to close that gap while customers stay?" In the transcript, management talks about their investment portfolio, yields, and monetizations. They mention that they are deploying capital at weighted average prices and yields. But they don't say they are undercharging. They talk about their own distribution rate being 8.3% of NAV, while portfolio yields are 11.6% etc. But that's not about charging customers less. They are a lender, so their "customers" are the companies they lend to. They might be able to charge higher rates? But they don't discuss that. They do discuss "portfolio rotation" and buying at discounts. But that's about their own investments, not about their pricing. The only possible thing is that they mention "we continue to believe that issuing a bond like that at where we believe the market is would drive meaningful incremental spread income for our stockholders." That's about their own borrowing cost, not their lending. No mention of raising rates on existing loans or closing a gap. So the answer is NO.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| MEC | Mayville Engineering Company, Inc. | Q3 2022 | 2022-11-05 | B+ |
| CAG | Conagra Brands, Inc. | Q2 2017 | 2016-12-22 | C+ |
| SOHO | Sotherly Hotels Inc. | Q3 2016 | 2016-11-08 | D |
| RCL | Royal Caribbean Cruises Ltd. | Q1 2016 | 2016-04-29 | C+ |
| HPP | Hudson Pacific Properties, Inc. | Q4 2015 | 2016-02-25 | C |
HPP · Q4 2015 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly describing a gap between its current charges and what the market now supports, then confirming that the company is already closing it through mark-to-market resets and higher new/renewal rents. Victor Coleman states that the company has “rolled out 80% plus mark to market” on recent leases 2.5 years old, and that cash rent spreads on 1.6 million square feet executed since the acquisition were “north of 30%” with “20%, 25% mark-to-market for 2016 and 2017.
MEC · Q3 2022 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices sit meaningfully below the value custom...YES Management explicitly states that they have taken pricing actions in 2022 and have "more room for margin expansion through continued value pricing even beyond the pricing actions taken during 2022." This conveys that their current prices sit below what the market would support, and they are actively beginning to close that gap with further value pricing.
SOHO · Q3 2016 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly identifying a rate gap at the Laurel hotel (and similar situations at other properties) where current charges sit below the competitive set/market, while describing active steps already underway to close that gap through continued ramp-up and occupancy/rate improvements.