Good morning, If you have questions or anything else on your mind, email and we'll get back to you ASAP.
KEY CALL OUT
We added a section for Health Care Sector ETFs to our Position Monitor this morning as a way. XLV is a long because of its positive back test result across multiple Quad 4s, but also the performance of its embedded factor exposures. XBI and ARKG are shorts as the key factors of short interest, multiples, negative cash flow all line up as clearly negative in Quad 4. We added ARKG to the short side in 1Q21. While Health Care Services (XHS) and Health Care Equipment (XHE) should be defensive, the ETF components are have a high concentration among tickers that lean more toward speculative, high multiple, and negative cash flows than we expected and we've added those to our short bench. PINK has lots of names with optimal factor exposure for Quad 4, some high short interest names and weak estimate momentum sorts it to our Long Bench.
The Employment Report from BLS this morning is a big update to our Goldilocks outlook for Health Care and the likelihood to find some defensive separation from the broader economy. Health Care back tests positively in Quad 4 and there are plenty of names with the right factor exposure to pick out. As we've seen so far this week, employment in the Health Care Sector is solid while wage growth is moderating. To us that says providers are hiring to service solid demand, despite the macro headwinds hitting the rest of the economy, while Job Openings come down from the white hot demand that peaked with Omicron and that pinned both temp and permanent wage rates at historic highs.
POSITION MONITOR
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NEWS & TRanscripts
TDOC Former Area VP is Bullish About TDOC’s Value-Add (Stream Alpha Sense) Former Teladoc Health, Inc - Area VP - Health Plan ASO Sales (Former)
"Yeah, I listen to their quarterly reporter earnings call, if you will, that was published at the end of April. I can understand this even though I've been gone for a year. I can understand what Teladoc was suggesting was the delay to a large degree was driven by employers' focus being diverted to return to work efforts around the COVID situation. That's where their HR benefits people were more focused in on enhancing their benefit solutions, if you will. I would not doubt that at all. That made a lot of sense."
AMN Nurse Thinks the Current Labor Issues Could Take a Few Years to Normalize (Stream Alpha Sense) Nurse Practitioner (Current)
"I do think hospitals are trying to get creative as far as how can they retain nurses outside of money. I think money or salary compensation is the elephant in the room. Everyone assumes that it's just about money but it's multipronged. Money certainly is significant and that's what people look at but I think most nurses are critical thinkers enough to know that it's not just the money. It's some of these mentorship programs, continuing education. Would you be willing to go to a hospital system where you could make your own schedule but you make $10 less an hour"
HCA Radiologist Believes New Pricing Transparency Laws Will Significantly Push Patients Towards Freestanding Outpatient Facilities (Stream Alpha Sense) - Assistant Professor of Musculoskeletal Radiology and Intervention (Current)
"No. It may occur even quicker than that. Particularly with some of these laws that are being passed that essentially prohibit health care systems from hiding costs. There could be potential legal ramifications of not being transparent with your fee schedule. I think that will accelerate patients flocking to these outpatient facilities. As technology continues to progress and patients have access to information at the tap of a keyboard, it will happen, I think, more rapidly than we expect. It's becoming like I mentioned, a consumer-based model as opposed to just patients receiving medical care and thinking that they have no choice. We see it with our referrers, too."
CALENDAR
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Have a great day out there!
Thomas Tobin
Managing Director
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William McMahon
Associate
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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.
