Good afternoon, As always, email us if you have any questions on any of the data or our takeaways - . We'll talk more about the estimate trends this Thursday at 10am. Keep an eye out for the invitation for our Micro Quad & Health Care ETF presentation.
KEY CALL OUT
CLICK HERE for the full weekly update - our Sector Distillation deck.
Movement between bins this week included several stocks rotating to Micro Quad 1 from Micro Quad 4, including ABC, AMGN, and EYE. Diabetes Tech pure play TNDM also joins EXAS and TXG in this smaller allocation short bin in the model portfolio. As a reminder, the allocations are below in the model portfolio slide. We've highlighted both EYE's cautious-looking forecast algorithm output for both Eyeglass World and America's Best and TXG's potential "growth gap"/challenge over recent weeks, so this bearish positioning largely makes sense to us.
Other noteworthy stocks in this week's update:
DGX remains on our Short Bench and slipped to Micro Quad 4 from Micro Quad 3 for this week. If you're following along, it goes from a small long to a full short position in the model portfolio despite the favorable Macro Quad factors (larger cap, decent yield, etc.). The Consensus is likely wrestling with the outlook for testing volume in a post-COVID world. We envision cost pressures weighing on estimate momentum as well (fuel, wages).
PGNY, the fertility benefits pure play, remains in Micro Quad 2, and NTRA remains in Micro Quad 2 as well.
SYK moved from a Micro Quad 4 short to a Micro Quad 3 long, which fits with our procedure recovery #reopen thinking.
Neither TDOC nor EXAS moved. TDOC remains stuck in Micro Quad 4, and its white paper (must register to get the PDF) on whole person virtual care is unlikely to help the consensus think through forward estimates. More on that tomorrow. EXAS remains "stuck" in Micro Quad 1.
Last, for now, Micro Quad 2 now includes BSX, AMED, and WAT. It's tough to love anything long here in Macro Quad 4, but if you must/can't resist:
- BSX and WAT became larger long positions in the model portfolio this week; and
- AMED shifted from a small short to a full long allocation.
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).
Stocks in bold are new to the bin this week.
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
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William McMahon
Analyst
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Justin Venneri
Director, Primary Research
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*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.
