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 — Q2 2018 call → NOWe need answer YES/NO based on transcript. Need determine if management conveys undercharging and closing gap. Let's examine transcript. Management discusses pricing: Tom Giacomini on raw material costs: "we do consume stainless steel, some carbon steel and aluminum. And we have seen some increases. Brian mentioned that it's impacted in our gross margins to a small extent. And generally Joel, we're able to price for them and when we price new projects and also we've taken some pricing actions on our parts et cetera throughout the year. And we've reflected that in our margin outlook for the year. So, I think in general, we'll be able to convert fairly well on the increases. But there's always a bit of a lag because of the orders we have in backlog. So, when we book an order it reflects our best thinking on the materials, but if they move more than we expect, there can be a bit of a headwind there. But overall I'd say, JBT has been fairly effective in pricing for it as we've gone through the year." This is about passing through cost increases, not undercharging relative to value. No mention of pricing below market or value. Also mention "we've taken some pricing actions on our parts" but that's cost recovery. No claim of gap. Also no mention of closing gap. So answer NO. Need ensure no other part. Management talks about strong markets, but no pricing power claim. So 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.