Scarcity premium: the thing the company sells is becoming harder to get, and management is letting the shortage do the s
The model's full reasoning — Q3 2022 call → NOWe need to determine if management conveys that what the company sells is becoming harder for buyers to obtain, and that management is allowing that tightening to work in its favor. The transcript discusses DSD and Direct ship businesses, price increases, surcharges, and managing inflation. There is mention of "we are seeing net new customer sales growth and increased drop sizes" and "we are seeing others get back" after a competitor closed branches. But does management say that availability of their product is tightening? They talk about price increases and surcharges, but that's about passing costs, not about scarcity. They mention "we are continuing to implement surcharges" and "we continue to manage our pricing against inflation." They also talk about "we are proactively managing more components of our DSD business" and "targeting our Tier 5 customers or less profitable customers" - that suggests selectivity, but is it because of scarcity? They are picking and choosing customers, but that might be about profitability, not about limited supply. They also mention "we are considering the exit or sale of excess properties" and "we are currently reviewing these branches" - that's about cost reduction, not about scarcity. There is no explicit statement that buyers are finding it harder to obtain their product. They talk about "we are seeing net new customer sales growth" - that suggests they are adding customers, not turning them away. They also mention "we are seeing others get back" - that's about competitors. The question asks if management conveys that what they sell is becoming harder for buyers to obtain. They don't say that. They talk about price increases due to inflation, but that's not about scarcity. They also talk about "we are continuing to implement surcharges" - that's about passing costs. They don't say that they are limiting availability or that demand exceeds supply. They mention "we are seeing net new customer sales growth" - that suggests they are meeting demand. So the answer is NO. Also, the shortage described is of things they buy (coffee beans, shipping) but that constrains their own shipments? Actually they say "we are seeing domestic shipping starting to normalize" and "we continue to find new ways to offset many of the higher costs" - that's about costs, not about scarcity of their own product.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| PRA | ProAssurance Corporation | Q1 2024 | 2024-05-11 | D |
| AES | The AES Corporation | Q1 2024 | 2024-05-03 | C+ |
| PDS | Precision Drilling Corporation | Q1 2024 | 2024-04-25 | B |
| LEGH | Legacy Housing Corporation | Q4 2023 | 2024-03-18 | C |
| ALL | The Allstate Corporation | Q3 2023 | 2023-11-02 | C+ |
| DAL | Delta Air Lines, Inc. | Q2 2023 | 2023-07-13 | A |
| UAL | United Airlines Holdings, Inc. | Q4 2022 | 2023-01-18 | B |
| STM | STMicroelectronics NV | Q3 2018 | 2018-10-24 | C+ |
| ESS | Essex Property Trust, Inc. | Q2 2018 | 2018-08-03 | B+ |
| IRT | Independence Realty Trust, Inc. | Q2 2018 | 2018-08-02 | B |
| RACE | Ferrari N.V. | Q3 2017 | 2017-11-02 | C+ |
| HPP | Hudson Pacific Properties, Inc. | Q4 2015 | 2016-02-25 | C |
LEGH · Q4 2023 → YESThe question is: Does management convey that WHAT THE COMPANY SELLS IS BECOMING HARDER FOR BUYERS TO OBTAIN — availability tightening — AND that management is allowing that tightening to work in the c...YES The transcript shows management explicitly holding production levels steady to build backlog rather than ramping output, while continuing to hold pricing levels. Duncan Bates states: “We have held pricing levels and held production levels as we continue to build a backlog across the manufacturing plants” and later “we decided, hey, let's keep production where it is and keep building the backlog.
STM · Q3 2018 → YESThe question is: Does management convey that WHAT THE COMPANY SELLS IS BECOMING HARDER FOR BUYERS TO OBTAIN — availability tightening — AND that management is allowing that tightening to work in the c...YES The transcript shows management describing current shortages and a "stretched supply chain" for their own products (especially Automotive and Power Discrete), with backlogs confirming demand outrunning availability. They explicitly note pricing upside from the fractured supply situation in Power and treat the tightness as a positive dynamic rather than an urgent problem to fix.
ALL · Q3 2023 → YESThe question is: Does management convey that WHAT THE COMPANY SELLS IS BECOMING HARDER FOR BUYERS TO OBTAIN — availability tightening — AND that management is allowing that tightening to work in the c...YES The transcript shows management explicitly restricting new business growth in unprofitable states (California, New York, New Jersey down 75% in new applications) and describing this as part of the profit improvement plan that is working in their favor by improving margins and allowing selective removal of restrictions only where target returns are achieved.