Our Macro Quantitative team agrees with our favorable fundamental view on MPEL.
The Hedgeye Macro team today doubled down on its long MPEL situation. From a trading perspective, the risk reward looks favorable with only 2.9% down to the trade line but 6.8% up to the resistance line. From a fundamental perspective, the upside looks significantly greater with MPEL trading at a substantial discount to its peer group yet estimates look like they are going higher. The Hedgeye Macro Quantitative view is depicted in the following chart.
MPEL beat the Street for the second straight quarter yesterday (a big deal for the gang that couldn’t shoot straight since the IPO). More importantly, Q1 is trending above Street estimates and direct play appears to be growing as a percent of VIP which should be good for margins. Numbers look like they are going higher, again.