HEALTH CARE TOP 10: From Macro to Factors to Stocks
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Health Care Top 10: From Macro to Factors to Stocks Thursday, March 24, 2022 @10 am ET Healthcare Subscribers: CLICK HERE for event details (includes video, dial-in and materials link) |
Using Factors to Navigate Quad 4
The impact of Macro Quads and the Quad Playbook has been the key to performance at the individual stock level. Taking the Hedgeye tool kit and drilling down to the individual stock is easier said than done, however. Just measuring the how individual tickers perform under the four Quads is too broad a tool and can miss the idiosyncratic changes.
We've taken the broad measure of Macro Quad and positioned factor exposure as the next most critical step before getting to an individual equity. A great story convincingly told by credible management teams and backed up by quarterly earnings has a long history of making analysts and their PMs feel smart (mostly the PM). Its equally true that when an idea isn't working despite the fundamentals coming in as expected, the analyst blames the market and the PM blames the analyst. Rather than doing any of those things we're leaning into what works, finding a Factor Path from Macro Quads down to a list of the highest probability longs and shorts.
The chart below shows a preliminary analysis of how factors behave in Macro Quad 4. The next step will be to filter our list of 300+ tickers held in the best Health Care ETFs for the highest probability names to pursue, a top 10 list for longs and shorts. We'll also show how these predictive factors roll up at the Health Care ETF level with the goal of trading the Health Care ETFs alongside the top fundamental stories worth telling.
Our models are up-to-date and available for interested Health Care Subscribers, as well as all data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
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