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TICKERS DISCUSSED LONGS: MCD, GLASF, LW, KR, DKNG, FLUT, RH, OSK, HUBS SHORTS: QSR, YUM, OLLI |
Restaurants
- (Position Monitor): we removed JACK from our long bench; adding MCD back to the long bench; QSR is being added to the short bench along with YUM; we will discuss more in a call on Wednesday
Cannabis
- (Long – GLASF): last week Glass House Brands held its investor day, reaffirming our belief that it remains one of the most compelling long-term growth stories in the cannabis space; the event provided valuable insights into the company's business trends, strategic positioning, and the potential hemp opportunity; we continue to believe that this is a $40-$50 stock in 3-5 years; GLASF remains a long
Staples
- (Long – LW): moving up one spot on the long list; Lamb Weston remains on the long list despite starting a pricing war because the industry's competitive challenges are not structural; in most U.S. markets, McDonald’s franchisees agreed to extend the $5 value meal offer into December; LW remains a long
- (Long – KR): moving higher on the long list; Kroger reported a Q2 EPS beat last week on expanding margins, which was a positive surprise in the face of higher input costs and unfavorable supplier commentary; though the company’s report was strong, more focus should be on the FTC preliminary injunction that wrapped up this past week; a ruling is expected in two weeks; KR remains a long
GLL
- (Sports Betting): we are hosting our Sports Betting & iCasino deck tomorrow at 12:30pm ET; unique analysis to be featured in the deck; NFL week 1 was customer friendly with 81% of the matchups leaning in favor of the favorites; a lot more upsets in week 2; this tends to be operator friendly; DKNG & FLUT remain longs
Retail
- (Long – RH): moved up to our #1 long idea; stock is breaking out; redoing their product line; store openings are on track; they went through a long bottoming process; Pods look good over a TAIL duration; RH remains a long
- (New Short Bench – OLLI): Ollie’s is a place you go to buy excess consumer goods; very difficult to do in scale; company plans on doubling its store count; in the print a few weeks ago, comps accelerated but gross profit decelerated; this is a really bad look; this is a best idea candidate, but OLLI is starting on the short bench
Healthcare
- (Healthcare Macro): slope of the LTM revenue line peaked on August 2nd; lower batting average in a Quad 3 for healthcare; more shorts than longs in healthcare in a Quad 3 environment; hospital wage inflation should hit 6.5% by year end; this year end estimate is going up; we are looking to do more in the dental space
Health Policy
- (MRNA & PFE): surgeon general of Florida has sent a letter to the provider community suggesting they do not use the MRNA based COVID vaccines in Florida; this is a large state with a significant population of elderly people; unusual move for a state health department; not good news for Pfizer or Moderna
Financials
- (Barclays Financial Services Conference): had a number of companies say different versions of the same thing; BFH came out with a message similar to SYF and ALLY; projecting a climbing of charge offs into year-end on the back of a weakening consumer
Macro
- (Rate Cuts): coming into this morning, there is now a 65% chance of a 50-basis point cut at this week’s meeting; 3 FOMC meetings between now and the end of the year
Industrials
- (Long – OSK): we are hosting our Long OSK Black Book today at 2pm ET
Energy
- (Natural Gas): overall natural gas demand is weaker than the five-year average as LNG exports and power gen drop; we publish our weekly Natural Gas Monitor weekly on Sundays
Software
- (Long – HUBS): HUBS is hosting their investor day on Wednesday; we will be there in person; will have more later in the week; HUBS remains a long
Telecom & Media Policy
- (TikTok): TikTok is defending itself against being banned today; being challenged on first amendment grounds; could get a decision by December; we think this is a hard case for TikTok to win; a lot of this is classified data; China will not allow ByteDance to sell it
