Good afternoon, As always, email us if you have any questions on any of the data or our takeaways - .
KEY CALL OUT
CLICK HERE for the full weekly update - our Sector Distillation deck.
Movement between bins this week included Guardant (GH) rotating to a MicroQuad 2 - a full long allocation in the model portfolio. We also see another familiar stock, Masimo (MASI), back in MicroQuad 4, which is a full short allocation. As you can see in the MicroQuad Bins, we've been working to reposition our coverage and ideas in a way that's more in sync with higher probability outcomes based on our MicroQuad screening process.
Some weeks there's more to talk about than others, but it's helpful to think through why stocks aren't moving too. Exact Sciences (EXAS) and Teladoc (TDOC) are two that we are in no rush to cover on the short side, and we just recently pushed 10x Genomics (TXG) over the line to a best idea short. While EXAS has rotated to MicroQuad 1 as of end of February/early March, it remains "stuck" on the cusp of MicroQuads 1 and 4 as sell side analysts wrestle with what to do with this year's guide and their estimates. We'll be taking a look at our claims data series this week, including the data for EXAS' Cologuard and Ocotype tests and Natera's NIPT and Signatera, and expect the data to help explain what we're seeing in the NTM estimate momentum. We'll also be updating the app data for TDOC this week. We acted on NTRA last week, moving it to the bench in the wake of the Hindenburg piece; however, we're in no rush to cover either EXAS or TDOC based on the MicroQuads and Macro Quad 4 backdrop.
Other noteworthy stocks in this week's update:
DGX remains on our Short Bench and in MicroQuad 3 - the stock is trading like another variant is coming and has a lot of the right characteristics of a Macro Quad 4 long (larger cap, ~1.9% yield, lower beta, etc.)
EYE faces tough comps and our updated forecast algo output (published in this morning's brief) has us wondering if EYE is Best Idea [short] worthy
PGNY, the fertility benefits pure play, remains in MicroQuad 2
MICROQUADS*
As a reminder, if you have questions about the MicroQuad process, please try to find ~20 minutes to watch our Dec 30, 2020 call replay: Process & Utility of the Hedgeye Health Care #MicroQuads - CLICK HERE for event details (includes video link and materials link).
ESTIMATE REVISION TRENDS
Position Monitor Stocks**
Model Portfolio Performance
All data available upon request. Please reach out to with any feedback or inquiries.
Best,
Thomas Tobin
Managing Director
Twitter
LinkedIn
William McMahon
Analyst
Twitter
LinkedIn
Justin Venneri
Director, Primary Research
Twitter
LinkedIn
*Please note, not all Position Monitor names make it into the MicroQuad output - most likely due to a lack of sufficient historical trading and estimate data.
**We may show stocks that we have data for but the correlation fails to meet the criteria for MQ bin inclusion week-to-week.