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 — Q4 2016 call → NOWe need answer only YES or NO. Need analyze transcript. Need determine if management conveys undercharging and closing gap. Let's inspect. Question asks: On this call, does management convey that company currently charging LESS for what it sells than market would presently bear — own prices/rates/fees/terms below value — AND already begun/actively beginning to close gap while customers stay? Need use only transcript. Need identify any statements. Let's parse management comments. Topics: LPG export terminal, frac, storage, chemicals, refining, marketing. Pricing? There is mention of "we premised $0.12 in the economics for the fee across the dock... some contracts above and some below... spot about 70% of what we premised." That suggests fees maybe below? But not necessarily management claim undercharging? Let's examine. Greg: "We premised $0.12 in the economics for the fee across the dock, Paul. And we have some contracts above that and some below that. And then we're doing at least two to three cargos a month of spot. And the spot is about 70% of what we premised." This is about LPG export terminal fees. It indicates spot rates are 70% of premised? Actually "spot is about 70% of what we premised" means spot fee is lower than expected? That would be undercharging? But no mention closing gap? Maybe not. Other pricing: "We think the arbs tend to open back up... we do think that arbs do open up in, certainly in 2017, but particularly the back half of 2017." That's market prices, not own pricing. "Marketing & Specialties... lower margins from commercial activities... hedges..." No. "Refining... product differentials..." No. "Chemicals... margins..." No. "Beaumont Terminal expansion... contracted crude storage..." No. "PSXP dropdown..." No. "Dividend increase..." No. Question specifically about pricing below value and closing gap. Need see if management says "we have been undercharging" etc. I don't see. Maybe there is mention of "we're doing at least two to three cargos a month of spot. And the spot is about 70% of what we premised." That could mean they are charging less than expected for spot, but not necessarily less than market. No mention of closing gap. Maybe "we have some contracts above that and some below that" - no. Maybe "we're seeing a lot of NGL looking at our de-ramp or the ramp-up on Sand Hills out of the Permian.
| 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.