Callouts & quotes from 1,047+ activist slides

"Die Immobilienstruktur von Richter scheint stark liquiditätsbeschränkt zu sein. Das Halten illiquider Vermögenswerte bei gleichzeitiger Liquiditätsnachfrage während eines Margin Calls führt zu einer gefährlichen Diskrepanz."

"Even if we look at Segment EBITDA margins which adds back disclosed depreciation and amortization costs, we find that segment margins have fallen from 2020 and did not improve much with the contribution of Itiviti in 2022."

"We fail to understand why any investors would ascribe IDEXX’s multiple to “core” Heska given its precarious competitive position, inferior innovation, dramatically lower margin profile, and vastly inferior management team."

"Spruce Point has difficulty believing Generac's reasons for why Domestic EBITDA margins keep falling. First off, it keeps citing commodity input costs, yet this same factor is never mentioned in the International segment."

"They are maintaining their margins. So being off 10% when you plan to be off 10% and you keep your margin is a significantly different situation than being off 15% when it wasn't your plan and your margins were decimated."

"We cannot find any record of Saputo providing EBITDA figures for Argentina. However, we can now estimate Argentina's margins with the insights from Saputo's obscured Australian financial filings through a numbered entity."

"TWC's programming costs continue to rise, especially for sports programming. TWC has been relatively successful at passing these costs onto consumers, however, margins are predicted to compress as costs rise even further."

"Despite ~50% increase in revenue, ~800bps of margin expansion and improved free cash flow over the last two years, NFLX’s share price is down more than 40% from recent highs and has nearly returned to pre-pandemic levels"

"Spruce Point’s warns that Evoqua’s final 10-K Annual Report made multiple alarming revisions to its “Growth Opportunities” around margin expansion, cash flow improvements, and capabilities servicing complex contaminants."

"We estimate that Twist sells to Ginkgo at 1.5 cents per base pair, and experts indicate that the cost to manufacture is “probably 9-10 cents at this point,” which by our math comes out to a gross margin of negative 533%."

"Upon closer inspection, we see that Stryker’s foreign earnings before income taxes (“EBT”) has been falling as a percentage of total EBT, and its foreign margins are falling, yet it is claiming greater U.S. tax benefits."

"As PBH has grown through larger acquisitions, the Company has been paying higher multiples for businesses with lower margins. PBH currently trades at a premium to the average EBITDA multiple of its acquisition targets."

"Tenon EBITDA running at low cycle of USD8m vs peak of USD20m. Margin improvement potential from restructuring, new products launch, new geographies and housing market recovery could drive an EBITDA pick-up to USD23m."

"Over a longer term period, with a best-in-class management team and perfect information, we believe the opportunity exists to reach peer average margins of 48% and potentially further close the margin gap with Amgen."

"This could help FTAI transfer leasing equipment to Inventory at arbitrarily low costs. Recall, a lower carrying value for Inventory results in lower COGS and consequently a higher gross margin for Aerospace Products."

"The hour-long interview note started on a bullish note for Soleno as he has submitted 15 start forms, and then quickly collapsed as he confessed that he thinks the drug has minimal benefit and the data is “marginal”."

"Recent buyers bucket Avery as a "value" investment, despite the fact we illustrate it trades at the richest multiple in its sector (with below average margins and sales growth) and at a premium to broker fair value."

"Compared to its DTC peers, FIGS allocates nearly all fulfillment and distribution expenses to the operating expense line items, instead of COGS. This results in FIGS gross margins being overstated relative to peers."

"Wall Street analysts are projecting 2023 revenue growth of $283 million and improving margins. We believe these expectations are overly optimistic based on the breadth of revenue and profit headwinds we see in 2023."

"We believe sports prediction exchanges have structurally better odds. Prediction exchanges do not set the odds, users do. We believe Kalshi only charges ~1.5% on average to users per trade vs. the 8–10% DKNG margin."

"Henan Ruili cannot be dismissed as a single anomalous operation. We strongly suspect there are other controlled suppliers that, combined with the controlled distributors, materially improve ANTA's reported margins."

"At Trian’s consumer investments where Nelson Peltz has served on the board, margin improvement coincided with sales growth, often due to reduced bureaucracy, greater accountability, and a faster moving organization"

"Genius currently trades at a premium to peers on a sales and EBITDA multiple basis while generating significantly lower margins than peers and below average projected revenue growth to online gaming and B2B peers."

"To grow margin, we have to incorporate innovation, which is a really difficult hill to climb. We can do it in pieces and parts, but there are not a lot of super large opportunities to expand margins in that space."

"PEN trades in line with more advanced and R&D-intensive medical device companies despite its weak IP, relatively low gross margins (even by the standard of 510(k) companies) and increasingly competitive landscape."

"While auditor rotations can be viewed positively, we believe three auditors in six years is excessive in light of the accounting anomalies we have identified related to sales, gross margins, inventories and capex."

"Based on our view of appropriate revenue growth and operating profit margins, we believe that P&G should be earning closer to $6/share by FY June 2016 – a level more indicative of the company’s true earnings power"

"Axon's core Taser product is at best not growing, while margins have been slowly contracting. Meanwhile, its faster growing Software and Sensor segment is experiencing slower growth, along with margin contraction."

"It is incredibly perplexing that even after isolating the largest variable cost on the PnL (purchased transportation), Forward Air would effectively achieve a ~9% incremental margin on what is mostly fixed costs."

"Revenues are basically flat over the last 4 quarters – a striking fact for a “growth” stock; losses have doubled and are accelerating; gross and operating margins have tanked, falling sequentially in each period."

"As important though, do the remaining six brands ALL fit Hasebe's 2021 criteria of JPY5bn revenue, 15% operating margin and growth? If not, would it not be better to pool resources into Biore and Jergens instead?"

"Note that the trained and certified dealer network slowed in Q1 2022 to 4%. One of our concerns is that Generac does not break-out clean energy revenues or margins in SEC filings as a separate reporting segment."

"It appears incredibly suspicious that, after CFO Rao claimed new products don't generate higher ASPs or margin, MPWR would then report record price increases in 2017/18. Prices fell on average 5% from 2013-2016."

"After appropriately valuing its high quality franchise and real estate cash flows, even “unfixed” Wendy’s is worth $35 today. If the Company improves its company-operated store margins, the business is worth $42"

"Can you imagine this happening at any reputable company? Andy Moore is still the CEO of B. Riley Securities, and this begs the question – how many more undisclosed margin loans do RILY’s executives have at risk?"

"In total, our detailed presentation outlines how we believe Office Depot, as a stand-alone company, can improve its current operating margins from 0.9% to 7.3%, representing an improvement of over $650 million."

"Even before the recession, Target’s retail margins have been deteriorating while Wal-Mart’s margins have remained higher and constant, despite Wal-Mart selling a greater mix of food and other lower margin goods"

"Even before the recession, Target’s retail margins have been deteriorating while Wal-Mart’s margins have remained higher and constant, despite Wal-Mart selling a greater mix of food and other lower margin goods"

"We believe that ANTA posts industry-leading operating margins not because it's so well operated; but, rather because ANTA uses numerous secretly controlled Tier 1 distributors to fraudulently boost its margins."

"Lasertec is an extreme, textbook accounting fraud that checks off every box: claiming to have the highest margins in the industry; but alarmingly little cash flow and the lowest cash conversion among its peers."

"Since the most recent acquisition of Fleet closed in 2017 PBH’s share price has underperformed. We believe PBH will continue to underperform as headwinds result in negative organic growth and declining margins."

"Spruce Point finds that companies claiming superior margins that poorly plan and execute against capex projections have underlying problems or poor visibility, which ultimately lead to earnings disappointment."

"From local filings, we see that its EBITDA margin has fallen sharply over the past three years from 7.8% to 3.9% (Adj EBITDA from 8.2% to 6.0%), while operating cash flow amounted to just A$3 million in 2022."

"Subsequent to the move, Dalian’s OP margin declined from 15.4% in FY 2009 to 10.6% in FY 2010, indicating that the Automotive portion of Dalian was much higher margin than the Small Precision Motors portion."

"We believe PGNY needs the clinics more than they need PGNY and that short, 1-year clinic contracts only increase clinic network negotiating leverage, which we believe may pressure PGNY margins going forward."

"New long-term incentive plan rewards measurable results: organic sales growth, gross margins, and credible ROIC targets while retaining certain sustainabililty elements, but focused on verifiable benchmarks."

"GFL restated its Adjusted EBITDA a second time in Q2 2020 to make the USA Waste segment's margins look much better by +2.1% (210bps). The boost came from allocating more costs to the “Corporate” or account."

"What Spruce Point finds amazing is that Saputo has been able to improve margins after the 2018 step down, without sacrificing any labor or rationalizing excess capacity (which it has now ceased disclosing)."

"Monster recently started referencing "production inefficiencies" as impacting gross margins. Could the inefficiencies be so bad that Monster has to ship products over 5,000 miles from Ireland to California?"

"As a standalone entity, SSgA could be better positioned to close the margin gap versus peers, receive a multiple re-rating over time, and may have significant strategic value to other industry participants."

"~400 bps of improvement in MDLZ margins, bringing them in-line with diversified food peers (but well below snacks peers), would yield ~$1.4bn in incremental EBITDA (potentially worth ~$16bn to shareholders)"

"Since the beginning of 2013, HTA's same property revenues have grown on average by 1.9% y/y while same property expenses have decreased on average by 1.1% y/y, yet there is no commensurate margin expansion"

"Paychex is an ADP competitor that has reached its mature growth phase; yet, ADP trails Paychex significantly across all metrics: revenue productivity, gross margin, and operational profit margin (ex-float)"

"While management says "holistically, this portfolio provides a platform for balanced growth, margin and return improvement...all of which leads to top-tier total shareholder return," it simply is not true."

"MTD does not disclose sales by industry end market, instead broadly reporting sales in three product categories (lab, industrial, and retail) without providing details of margins in these three categories."

"If ADP earned Paychex’s ~41% SMB margin(1) on its ~$2bn SMB business, it would imply ~$820mm of operating profit. SMB-only profits would therefore account for ~50%+ of total Employer Services total profit"

"If GoDaddy executes against a long-term strategy focused on margin expansion, we believe the Company can generate a growth + profitability rate in-line with the broader set of scaled technology companies."

"The market has historically valued software companies with a material hardware business at lower multiples because their revenue ramp is overstated and their gross margin profile is structurally inferior."

"If GoDaddy executes against a long-term strategy focused on margin expansion, we believe the Company can generate a growth + profitability rate in-line with the broader set of scaled technology companies."

"By adjusting CLEAR's gross margins for labor and transaction fees, we see that its gross margin is 2,430 basis points lower than the promoted margin and 800 basis points lower than the peer group average."