The Call @ Hedgeye | Friday, September 22, 2023 [REPLAY]

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TICKERS DISCUSSED LONGS: PRGO, KVUE, DKNG, AMZN, XYL, FDX, NYT SHORTS: HLN, XHR, PK, PEB, HELE OTHERS: PFE, BABA, ATVI

Broadcast Summary

Consumer Staples: Daniel Biolsi - 00:01:49

• OTC Medications: 57% of Americans who purchase OTC medications are at least somewhat concerned about access if the medications are pulled from the shelves; concern over access was 9% points higher than adults who are at least somewhat concerned about how the panel’s decision could impact their health; Gen Z adults were the most likely to express concern about accessibility and health issues with the potential for a recall; this is a problem of the FDA’s own making; we don’t think they will do anything until the cough/cold season is over; Perrigo Company (PRGO) & Kenvue Inc. (KVUE) remain longs and Haleon (HLN) remains a short

Gaming, Lodging & Leisure: Todd Jordan - 00:05:42

• Hotels: Soft data last week; Street really expecting business transient to recover; we see lower for longer; heading into earnings season; hotel REITs won’t have a lot of positives to discuss; Xenia Hotels & Resorts, Inc. (XHR), Park Hotels & Resorts Inc. (PK), Pebblebrook Hotel Trust (PEB) remain shorts
• Macau: Looks good into the big weekend; Golden Week coming up; everything is sold out now; expect really strong gaming volumes, maybe even above 2019 levels which would be a first since covid
• Online Gaming: Kentucky expected to go live with online gaming; we are optimistic about this market; has a very low tax rate; profitability should be good after a wave of promotions; DraftKings Inc. (DKNG) remains a long

Retail: Jeremy McLean - 00:11:33

• Long – Amazon.com, Inc. (AMZN): Notable announcements the last couple days; one around hiring → Amazon is hiring 350,000 seasonal employees this year which is more than the last 3 years; looking to ramp the speed of delivery; have been running a bit lean; bullish for the top-line trend; could mean some tempering of the margin outlook; eliminated a seller fee; also doing advertising on Prime Video; AMZN remains a long
• Short – Helen of Troy Limited (HELE): Just announced their earnings day will be a couple weeks from now; planning to do an investor day two weeks later; will probably lay out a transition plan and operational goals under new leadership; company doesn’t invest in their assets; there was an ad by Braun, one of the brands that HELE is connected with, that is facing backlash for featuring a trans man in their ad; will see whether there is positive or negative fallout from this; HELE remains a short

Healthcare: Tom Tobin - 00:23:03

• GLP-1: We are looking at the % of the American population that is overweight, and then sub dividing the population by BMI and subsequently looking at diabetes vs. non-diabetes; income status and insurance coverage are also big factors; we think this gets us to the true TAM; we will be hosting a Black Book on Monday (9/25) at 2:00pm ET

Healthcare Policy: Emily Evans - 00:29:37

• Pfizer Inc. (PFE): Hosting a Black Book focused on PFE next Wednesday (9/27) at 10:00am ET; Pfizer has made the vaccine franchise a big part of their growth story; they are calling themselves a growth company; we are going to go through the politics of all of this; will also spend time on their base business

Macro, Housing & Financials: Josh Steiner - 00:30:45

• Data: Currently an interesting set up; every change to the 30yr fixed rate mortgage affects affordability; very strong relationship to home prices; back up in rates affects supply and demand side; volumes continue to suppress; sales were down 15.3% YoY in August; July was down 16.6%; comps get a lot easier in the back half of this year

Industrials: Jay Van Sciver - 00:41:42

• Long Bench – Xylem Inc. (XYL): Hosted our Water Infrastructure deck yesterday; will probably add XYL to best idea long list at some point soon; new management team coming in; XYL remains on the long bench
• Long Bench – FedEx Corporation (FDX): Prices are coming down for express which will help volume; tailwind of the proposed UPS strike; FDX remains on the long bench

Technology: Ami Joseph - 00:43:51

• IPOs: IPO postponement season has begun; already starting to trickle through; due to less than great performance from new issuers
• Dall-E: A product of OpenAI; Dall-E is going to launch in November; Adobe launched a product that integrates this; now everyone thinks Adobe is an A.I. winner; we think Dall-E is going to keep getting better and better

Communications: Andrew Freedman - 00:47:12

• Hosting our New Long The New York Times Company (NYT) Black Book today at 12:30pm ET
• Writers’ Strike: Hoping to get a resolution in the writers’ strike; meeting again with the studios; if a deal isn’t made, it could extend into year-end; could run out of content in 2H24

China: Felix Wang - 00:54:29

• Alibaba Group Holding Limited (BABA): Rumors that BABA’s logistics arm may consider a Hong Kong IPO as early as next week; a couple of mini BABA IPOs have now been placed on hold; this one may go through; many people have been waiting for these mini BABA IPOs to go through

Telecom-Media Policy: Paul Glenchur - 00:58:29

• Microsoft/Activision Blizzard, Inc. (ATVI): Regulators in London are set to clear the deal; finally coming to a close and deal will get done
• Budget: Government shutdown looming; still 9 days left; a lot going on behind the scenes; odds of a shutdown are going up; staffers are developing contingency plans

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