OVerview
Please see below for access to the replay of our Macro Quad Update & Idea Hunt - based on our factor screening work - call. Tom & Will reviewed the latest analysis of what does and doesn't work in Quad 4 and revealed an early look at what works in other Quads - i.e., "the recipe." We covered ACHC and our sentiment shift from Short -> Long Bench, why LFST remains on the Short Bench, dropping ONEM to the Long Bench in Quad 4, and why we're interested in HOLX. CLICK HERE to access the associated slides, and see below for access to the video replay and time stamps + quick notes.
time Stamps
Prepared Remarks
0:14: Intro – “Valuation is secondary.” We’re trying to be more “macro aware” and get better, faster; Position Monitor changes that reflect factor scoring (2:13) – EYE, TDOC, AMN, ONEM
04:35: Macro Quad -> Micro Quad, dynamic estimate trend line, Quad 4 has historically been good for Health Care, but Slide 7 shows the risk (this wave of COVID becomes more severe)
6:40: Quad 4 Ranked Factor Exposure – slide 8
7:59: The Recipe – Factor Screen by Macro Quad, Short Interest, EV/Sales, EBITDA Margin, Market Cap, NTM Sales
14:53: Weekly Meeting Notes, Long & Short lists based on factor scores – Longs (BAX, HOLX, TFX, THC, CVS, UNH), and Shorts (CDNA, EXAS, OSH, TXG, ONEM, DNA)
19:39: The Estimate Trend is trying to find a bottom, but it all depends on how the Consensus adjusts 2023 estimates, “portfolios” based on factors (Debt to Capital, Short Interest, etc.)
21:20: ACHC Update – “Watchful waiting.” Patient Share vs. Hourly Wages (slide 19), ACHC’s pace of hiring influenced our sentiment shift, Facilities Tracker makes the expansion look broad, Inpatient vs. CTCs/outpatient, EV/Sales and EV/EBITDA (30:13), etc.
Q&A
34:10: LFST and the Attrition Risk, slide 41
37:45: ONEM – Recent move higher, path from 1.1x EV/Sales? Well, we like the hiring trend, and growth, but low multiple and losing money is why it’s on the Long Bench while we’re in Quad 4
41:20: HOLX – Repurposing the testing capacity? History of coverage (Gen-Probe), women’s health testing, and most of our contacts see an opportunity to transition capacity (bring testing in-house as COVID testing wanes)
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Thomas Tobin
Managing Director
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