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 — Q1 2024 call → NOWe need to determine if management conveys that the company is currently charging less than the market would bear, and that it is actively closing that gap. Look for statements about pricing, rates, fees, terms being below value, and actions to raise them. In the transcript, management discusses deposit costs, loan yields, and balance sheet remixing. They talk about growing core customer deposits, reducing wholesale funding, and improving asset yields. They mention that deposit cost pressures are abating, and they are seeing stabilization. They also discuss loan growth in higher-yielding areas like auto and C&I. They mention that they are shifting mix toward better-priced business. For example, they exited low-yielding TPO mortgage, sold mortgage loans, and are growing auto and C&I with higher yields. They also mention that they are increasing rates on deposits? Actually, they talk about deposit costs rising but stabilizing. They don't explicitly say they are undercharging relative to value. They talk about improving yields on assets, but that is due to repricing and mix shift, not necessarily because they discovered a gap between price and value. They also mention that they are taking actions to improve return profile, but it's more about strategic mix. Look for any statement that they are leaving money on the table. They mention that they are growing deposits and reducing wholesale funding, which is good. They also mention that they expect NII growth. But they don't say "we are undercharging" or "our prices are below market." They talk about deposit betas and competitive environment. They also mention that they are seeing stabilization in deposit costs. They don't claim that they are now raising prices and customers are accepting. 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?" Management talks about improving asset yields, but that is due to repricing of existing loans and mix shift. They don't say they are undercharging.
| 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.