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 2018 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. The transcript mentions pricing in various segments. Key points: In the Gulf of Mexico, pricing pressure continues, rates are under pressure. In the North Sea, pricing appears to be holding, and there is a small trickle up on rates due to dive-in work. However, management does not explicitly say they are undercharging relative to value. They mention that they are seeing a roll up of legacy rates, meaning older contracts are being reset to current levels, which could be a gap closing. But is that a claim that they were leaving money on the table? They say "we are seeing a roll up of legacy rates. So, year-over-year, I'd say the pressure on our rates, in general, is a little greater than 2017 for the Q4000." That suggests they are not undercharging; they are facing pressure. For North Sea, they say rates are slightly above 2017, but that's due to dive-in work and market conditions, not a claim of undercharging. There is no explicit statement that the company's prices are below what the market would bear and that they are now closing that gap. The closest is the mention of legacy rates rolling up, but that is not framed as a discovered gap. Also, they mention that they are exploring ways to expand service offering and contracting formats to improve utilization and margins, but that is future-oriented, not current. So the answer is NO.
| 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.