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Operating expenses remain elevated compared with the previous year, which reflects Seagen’s investments to support the European launch of Tukysa and continued development of its pipeline. R&D expenses for the second quarter were $235 million and SG&A expenses were $165 million, representing increases of 19% and 31%, respectively.

Adcetris for lymphoma contributed $182 million in sales for the quarter, representing an increase of 9% compared with the prior-year period. Padcev for metastatic bladder cancer contributed $82 million in sales, representing growth of 44% from the second quarter of 2020. The FDA granted regular approval for Padcev in July 2021 and added a new indication for locally advanced or metastatic urothelial cancer. Tukysa for breast cancer reported revenue of $83 million, growing 427% year over year since the drug received FDA approval in April 2020. Seagen could gain regulatory approval later this year for its fourth-approved product, Tisotumab vedotin, or TV, for metastatic cervical cancer.

Company’s Future outlook

We believe Adcetris and Padcev provide ample near-term diversification, which we anticipate will further improve with additional label expansions and approvals of other indications. We expect Tukysa will gain steady market share as the drug recently received approval in the EU. We also anticipate a steady stream of licensing and collaboration revenue from its various partners. Our forecast implies a five-year projected revenue CAGR of about 16%.

Company Profile

Seagen Inc. (formerly known as Seattle Genetics) is a biotech firm that develops and commercializes therapies to treat cancers. Seagen’s therapies are based on antibody-drug conjugate technology that utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents directly to cancer cells. The company’s lead product, Adcetris, has received approval for six indications to treat Hodgkin lymphoma and T-cell lymphoma. Other approved products include Padcev for bladder cancer and Tukysa for breast cancer. The company has several other oncology programs in pivotal trials. Seagen also licenses its antibody-drug conjugate technology to several leading biotechnology and pharmaceutical companies.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

the types of services it historically didn’t provide but has entered via acquisitions in the last several years. We believe the ability to connect enterprises (smaller deployments) to hyper scalers like cloud a provider is what make data centers differentiated and that the ability to do it on a global scale is attractive for customers. Digital’s portfolio seems to be in the sweet spot to provide these abilities, and we think it can close the gap with Equinox as the premier global data center provider for connectivity.

Total revenue grew 10% year over year. Like its peers, Digital’s revenue was boosted by higher reimbursements for power costs. If utility reimbursement had grown at the same pace as rental revenue (10%), total sales growth would’ve been just under 9%. The higher pass-through revenue likely weighed on margins a bit. The adjusted] EBITDA margin was 55%, down more than one percentage point from last year’s second quarter but generally consistent with where the margin has been since the March 2020 Interxion acquisition.

Bookings in the quarter totaled $113 million in annualized revenue, including $13 million in interconnection revenue, a figure that has remained fairly constant each quarter since the Interxion acquisition. Leasing in the Americas accounted for more than half of the total bookings, with Europe and Asia Pacific each making up about a quarter. Two very encouraging results in the quarter were the improvement in pricing, as shown by renewal spreads, and the proportion of bookings made up of smaller deployments.

Company Future Outlook

We are raising our fair value estimate to $130 from $127. We believe the stock is moderately overvalued but more reasonably priced than peers and the first data center firm we’d look to on a pullback. We believe that Digital’s transformation should provide it with pricing power, so we expect to continue seeing better renewal spreads over time. However, we expect these spreads to remain choppy even as they trend up, so we are under no illusions that we’ve seen the last leases having to renew at lower rates.

Company Profile

Digital Realty owns and operates nearly 300 data centers worldwide. It has more than 35 million rentable square feet across five continents. Digital’s offerings range from retail co-location, where an enterprise may rent single cabinet and rely on Digital to provide all the accommodations, to “cold shells,” where hyper scale cloud service providers can simply rent much, or all, of a barren, power-connected building. In recent years, Digital Realty has de-emphasized cold shells and now primarily provides higher-level service to tenants, which outsource their related IT needs to Digital. Digital Realty has also moved more into the co-location business, increasingly serving enterprises and facilitating network connections. Digital Realty operates as a real estate investment trust.

(Source: Morningstar)

General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

, but sales fell by nearly 9% versus second-quarter 2019. Gentex shipped about 2 million less units than it expected at the start of the quarter, which caused diluted EPS of $0.36 to miss the Refinitiv consensus of $0.45.

The industry’s supply chains are in turmoil due to the semiconductor shortage impacting chip availability, but other disruptions unrelated to Gentex, such as foam shortages following Texas winter storms, caused automakers to change production at the last minute or refuse shipment of mirrors because other non-Gentex parts never arrived at the automakers’ assembly plants. This supply problem in our view will improve throughout 2021, and the worst of it is occurring in second quarter and early third quarter.

Gentex’s Revenue Growth

The lost production caused management to issue second-half 2021 guidance that implies lower full-year guidance than given in April. Revenue guidance is now $1.88 billion to $1.98 billion, instead of $1.94 billion to $2.02 billion, and we believe that second-half gross margin guidance of 37.5%-38.5% means April’s full-year guidance of gross margin between 39%-40% is not possible. We agree with management’s optimism around 2022 revenue growth being 10%-15%. Gentex’s cash-loaded and debt free balance sheet make times like this easier to get through management seems to be willing to continue share repurchases and spent $115.9 million on that in the second quarter.

Company Profile

Gentex was founded in 1974 to produce smoke-detection equipment. The company sold its first glare-control interior mirror in 1982 and its first model using electrochromic technology in 1987. Automotive revenue is about 98% of total revenue, and the company is constantly developing new applications for the technology to remain on top. Sales from 2020 totaled about $1.7 billion with 38.2 million mirrors shipped. The company is based in Zeeland, Michigan.

(Source: Factset)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

The semiconductor shortage ravaging the auto industry should bottom out in mid-2021, so gradual inventory improvement throughout the year, though a full recovery to take until 2022 or even 2023. The good news is that demand is excellent, with many consumers ready to spend money after holding back vehicle spending last year due to the pandemic.

Ford reported June sales on July 2 that showed the semiconductor shortage is hurting it notably worse than the rest of the industry. Management has repeatedly cited the impact of the Renesas plant fire in Japan as a major problem for Ford. June sales fell year over year by 26.9%, which far underperformed the industry’s 17.8% growth. We don’t see Ford having poor demand. The problem is low supply caused by the semiconductor shortage. With time Ford’s sales to be stronger in the second half of 2021 than the first half. First-half sales rose by 4.9% versus first-half 2020 (which is an easy comparable due to the pandemic), with about equal growth at the Ford and Lincoln brands. The 4.9% lags GM’s first-half 2021 growth of 19.8%. Ford’s first-half volume is down by about 20% from the first half of 2019. The best bright spot in Ford’s June sales is the Lincoln Navigator SUV, which grew volume by 15.5%. Lincoln’s SUVs had a first half of the year sales record, with retail channel sales up 23.3% year over year. June F-Series sales fell by 29.9%, and the company now has over 100,000 reservations for the all-electric F-150 Lightning due next year.

Company Profile

Ford Motor Co. manufactures automobiles under its Ford and Lincoln brands. The company has about 14% market share in the United States and about, 7% share in Europe. Sales in North America and Europe made up 69% and 19.5% of 2020 auto revenue, respectively. Ford has about 186,000 employees, including about 58,000 UAW employees, and is based in Dearborn, Michigan.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Unfortunately, the bright revenue picture is blurred by an uncertain outlook for costs snapping back from COVID-19 related rights relief, and investments needed to execute the strategic plan. EBITDA is projected to fall for two to three years from management’s projected NZD 180 million-plus in fiscal 2021. The trajectory is in line with our current expectation, but the key mystery is where Sky’s fiscal 2024 EBITDA will end up relative to our NZD 110 million forecast.

The current guidance for fiscal 2021 implies second-half EBITDA of NZD 66 million, or roughly NZD 130 million annualised. Our current fiscal 2024 EBITDA forecast of NZD 110 million would then equate to an average decline of 16% from fiscal 2021. It may be tempting to blindly input management’s financial targets into the model, but details from the investor day warrant a longer deliberation. In any case, our unchanged NZD 0.30 fair value estimate (AUD 0.28 at current exchange rates) already implies material upside from Sky’s current stock price. And the no-moat-rated group has attracted “a number of unsolicited approaches around potential transactions” over the past year according to management.

Management View to Launch Broadband Service

Management’s clear rationale for launching the broadband service is also sound (to improve the value and bundle proposition for existing Sky customers), while a continued focus on staking its ground in the fast-growing streaming space is not only positive but necessary. As with all strategic plans, the proof is in the execution. Its degree of difficulty is high, especially the objective of stabilising core pay TV subscriber base while growing streaming customers–a Goldilocks scenario that may be easier said than done. Still, with a pristine balance sheet, management is equipped with ample firepower to continue Sky’s transformation. The group ended December 2020 with an NZD 123 million cash balance, more than enough to repay the NZD 100 million bond (matured in March 2021). It also has an undrawn NZD 200 million facility (maturing July 2023).

Finally, management reaffirmed all current guidance for fiscal 2021. In fact, it even alluded to the potential that EBITDA may exceed the upper end of the NZD 170 to 183 million projected range, suggesting some remnants of COVID-19-related content cost savings and/or continued progress on non-content expense reductions. We have increased our fiscal 2021 EBITDA estimate to NZD 183 million, from NZD 175 million, but our longer-term forecasts are unchanged.

Company Profile

Sky Network Television is the only satellite pay-TV provider in New Zealand, and distributes local and overseas content to its customers through a digital satellite network. It generates subscription and content revenue from these customers. This business is augmented by a free-to-air television channel (Prime) and defensive forays into other distribution channels such as online video-on-demand and online access to live sports.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Total revenue during the company’s fiscal fourth quarter was up 12% year over year. The management solutions segment was up 14% compared with the prior-year period, led by increased cross-selling of services outside payroll and an increase in payroll checks per client as businesses started to recover from pandemic lows. The professional employer organization and insurance solutions segment was up 13% as well, due to an increase in worksite employees.

The recovery in Paychex’s top line aided profitability, with operating margins improving to 34.4% from 32.7% last year. The positive effect was partially offset by expenses that were up 10% year over year, mainly due to an increase in performance-based compensation.

Company’s Future Outlook

Management’s current guidance suggests a solid rebound this fiscal year. Paycheck expects total revenue to grow 7% and operating margins to come in at 38%, with both of those levels roughly in line with our long-term expectations for the firm.

Company Profile

Paychex competes in the payroll outsourcing industry. It is the second-largest player in terms of revenue and focuses on providing this service to small and midsize businesses. Paychex was created from the consolidation of 17 payroll processors in 1979 and services about 590,000 clients. The firm has almost 13,000 employees and is based in Rochester, New York.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.