• [WEBCAST] Raoul Pal & Neil Howe: A Sobering U.S. Economic Reality Check

    Prepare your portfolio for “big picture” paradigm shifts with Real Vision co-founder Raoul Pal and Demography analyst Neil Howe. Watch the replay from this webcast.

I focus on fundamentals. Keith focuses on stocks. Together we generate Alpha. Here are some names that KM highlighted to me, as well as my response. Some changes on the margin…

KM: PSS continues to impress, posting + divergence days when the market swoons.
BM: Still one of my favorite fundamental stories. Top line visibility improving, cost synergies from Stride Rite evolving into revenue synergies. Cash flow growth should accelerate meaningfully with or without a steadier consumer backdrop.

KM: GPS is bullish, but not if it breaks down and closes below 17.75.
BM: I really like the Athleta acquisition, and yy EBIT growth trajectory looks good relative to the group. But I still think that GPS needs to take up SG&A ratio by 2-3pts in order to take the model to a point where it can grow at a sustainable rate. Any bullish action near-term is purely a ‘Trade’ not a ‘Trend.’

KM: UA continues to hold the pos. momentum line, which shows me support at 34.66.
BM: I still think back half expectations are too high, but with 45% of the float short the stock, this one falls into the basket of names that will pop if the company hits the quarter even if by accident. I’m increasingly confident in top line growth in footwear, and FX here is a non-event. If margins find a bottom in 2H (which I think is a distinct possibility), this name could start one of those blistering 50% runs we’ve grown to love from UA.

KM: FINL is teetering on the edge of a major breakdown all of a sudden, the next move will be big either way.
BM: I wouldn’t go near this name in advance of Nike’s quarter Wed pm (FINL is a day later), as unfavorable risk/reward with Nike could take FINL with it. But fundamentally, this is another name I am warming up to for several reasons. I’ll be back with more color on this one – but my inclination is increasingly to swap out of FL and into FINL.