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Amid volatility, TN entrepreneurs eyeing public-co partners might be more diligent
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IN GOOD TIMES AND BAD, entrepreneurs looking for customers, strategic bidders, advisors and other resources often bank their hopes on publicly owned companies based in Tennessee or elsewhere.

Startups and SMBs have always been subject to close examination by understandably wary public and private corporates, as well as by potential investors.

Now, amid coronavirus and other volatility, startups and other business owners, themselves, might want to examine more closely how the public companies they plan to approach are doing, particularly whether or not potential partners have financial profile that suggest they could become sustainably engaged in new initiatives -- particularly if your entrepreneurial ideas are "non-core".

In the table below is a sample of 52 publicly held, Tennessee-based companies.

In addition to three columns of basic listing info VNC gathered on the 52 companies shown here, you'll find the "Risk Reward Ratings" most recently assigned to these companies by Brentwood-based, AI-enabled New Constructs.

New Constructs' technology enables users to sift companies' published financial reports with what seems unprecedented precision, to give its customers a truer picture of a corporation's economics, including earnings quality, valuation and related metrics. Those and related variables are among factors giving the truest picture of corporate gains.

The difficulty encountered by the average investor who seeks to find and interpret such material information is what drove New Constructs to render its Risk/Reward ratings.

David Trainer

Eighteen-year-old New Constructs is led by David Trainer, who, as we've previously reported, has received accolades from prestigious sources for his diligence techniques and technology, which often shine a spotlight potential weakspots in corporate finance.

Asked today how such an investigator views both the optics and the realities of the coronavirus threat, Trainer readily acknowledged that it seems the novel virus and its socio-economic impact will be difficult for healthcare providers, public health and Federal Reserve officials, alike, to contain.

However, the nation and perhaps the world will be missing an important lesson if we label the coronavirus as "the cause" of an economic downturn, rather than as a "catalyst."

He explained, "Bubbles don't pop because people get rational. They pop when a liquidity crisis forces selling.

"The disruption of commerce created by the virus is preventing some firm from paying the bills, payments upon which other firms rely to pay their bills. Without the cash flow needed to pay bills, firms and borrowers are forced to sell assets to meet commitments.

"The virus is creating a liquidity crisis that's revealing how overextended people, companies and market valuations are. The more acute the overvaluation the more likely to get sold.

"So, I think the virus is potentially the catalyst for a market correction, though it is not the cause.

"Wall Street and the press will blame the correcting on the virus, because they don't want people to ever think markets get too expensive.

"Also, only a true exogenous event like the virus can precipitate this kind of liquidity issue because there's not much the Fed or anyone can do to arrest it - at least not in the same way they could address previous crises such as the financial crisis," Trainer added.

Trainer was of course referring to the financial meltdown of 2007-08, which was largely a result of fatal flaws that had been hidden within the subprime mortgage market.

Earlier VNC New Constructs coverage here. The well documented New Constructs site would answer most of your questions regarding reporting methodology, diligence and related services, etc.

To provide feedback and suggestions regarding coverage, please connect with us via LinkedIn.

The 52 Tennessee companies are listed here below. VNC


MktCapUSD NewConstructs
Risk/Reward Ratings (RRR)
1 = best, 5 = worst
Ticker Company Name 4 Mar 20 23-Sept-19 4-Mar-20 Change
AAC AAC Holdings Inc 5.54M 4 4 NC
ACHC Acadia Healthcare Company Inc. 2.8BN 3 3 NC
ASTE Astec Industries, Inc. 895.8M 4 4 NC
AZO AutoZone Inc. 24.7BN 1 1 NC
BKD Brookdale Senior Living, Inc. 1.1BN 5 5 NC
CSTR CapStar Financial Holdings Inc 243.1M 3 3 NC
CBL CBL & Associates Properties, Inc. 95.4M 3 3 NC
CHNG Change Healthcare Inc. 1.8BN 2 2 NC
CHCT Community Healthcare Trust Inc. 1.1BN 4 4 NC
CYH Community Health Systems, Inc. 631.7M 4 4 NC
CXW CoreCivic, Inc. 1.9BN 3 5 -2
CVTI Covenant Transportation Group, Inc. 241.3M 3 4 -1
CBRL Cracker Barrel Old Country Store, Inc. 3.5BN 1 2 1
CPIX Cumberland Pharmaceuticals, Inc. 66M 4 4 NC
DK Delek US Holdings, Inc. 1.4BN 3 3 NC
DVCR Diversicare Healthcare Services Inc 14.2M 4 4 NC
DG Dollar General Corp 40.5BN 3 2 1
EMN Eastman Chemical Company 8.5BN 2 3 -1
FBK FB Financial Corporation 992.3M 3 2 1
FDX FedEx Corporation 35.2BN 3 3 NC
FACO First Acceptance Corp 25.3M 3 3 NC
FHN First Horizon National Corp 4.25BN 2 2 NC
FWRD Forward Air Corp 1.6BN 3 3 NC
FSB Franklin Financial Network, Inc. 481M 3 3 NC

FTDR
GCO

frontdoor inc.
Genesco Inc.

3.8BN
478M

N/A
3

4
3

N/A
NC

HCA HCA Healthcare Inc 45.7BN 1 1 NC
HR Healthcare Realty Trust Inc 4.9BN 4 4 NC
HSTM HealthStream Inc. 807.2M 4 4 NC
IIIV i3 Verticals Inc. 776.4M 4 4 NC
IP International Paper Company 14.8BN 3 3 NC
JAX
JCAP
J. Alexander's Holdings Inc
Jernigan Capital Inc.
125.7M
438.M
4
NA
4
4
NC
--
KIRK Kirkland's Inc. 17.7M 4 4 NC
LPX Louisiana-Pacific Corporation 3.5BN 3 4 -1
MBUU Malibu Boats, Inc. 860M 2 3 -1
MCFT Mastercraft Boat Holdings Inc. 303M 2 1 1
MAA Mid-America Apartment Communities Inc. 16.4BN 5 4 1
MLR Miller Industries, Inc. 353.4M 2 2 NC
MLI Mueller Industries, Inc. 1.7BN 4 2 2
NHC National HealthCare Corp 1.1BN 3 2 1
NHI National Health Investors, Inc. 3.8BN 3 2 1
NNBR NN Inc. 327.9M 4 4 NC
PNFP Pinnacle Financial Partners Inc 4.36BN 2 2 NC
QHC Quorum Health Corporation 37.8M 4 4 NC
RBNC Reliant Bancorp Inc. 2341M 3 3 NC
RHP Ryman Hospitality Properties, Inc. 3.8BN 3 3 NC
SERV ServiceMaster Global Holdings Inc 4.9BN 4 3 1
SDC SmileDirectClub, Inc. 3.1BN 4 4 NC
TVTY Tivity Health Inc 582.4M 3 3 NC
TSCO Tractor Supply Company 11.2BN 2 1 1
UNM UNUM Group 4.6BN 3 2 1
END OF LIST N52

. last edited 0557 5 March 2020


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