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Editor's Note: Below is your complimentary access to this complete edition of The Call @ Hedgeye. Hedgeye’s morning research call featuring our 40+ analyst research team discussing their Best Long & Short Stock Ideas & Sector Outlook. |
Our 40+ analyst research team has been on fire recently.
Heading into this earnings season, our Tech, Communications and REITs teams nailed big short calls on Facebook (META), Microsoft (MSFT), Google (GOOGL), Invitation Homes (INVH) and many more.
In this complimentary edition of "The Call," there are 22 companies discussed (among them 9 Best Idea longs and 5 Best Idea shorts).
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Tickers DiscussedLONGS: WING, MCD, KDP, VAC, DRVN, MCW, AMZN, FISV, EDU SHORTS: HZO, AAP, INVH, TSLA, META OTHERS: BUD, PPC, TNL, ORLY, PFE, CAT, TNET, COUR |
Broadcast Summary
Consumables: Howard Penney - 00:00:12
- Today, October 27 at 12:30 PM ET – Cannabis Monthly Q&A
- Wingstop, Inc. (WING): Domestic same store sales increased 6.9% and EBITDA was up 35%; most of this was increased traffic, they are not raising prices like Chipotle; also beat on units and raised guidance; chicken wing prices down 47%; the stock is expensive, but the company does have momentum; WING remains a long
- McDonald's Corporation (MCD): Reported this morning; reported $2.68 vs. consensus at $2.58; marketing and overall business is doing well; inflation beneficiary; MCD remains a long
Consumer Staples: Daniel Biolsi - 00:04:30
- Earnings: Anheuser-Busch InBev SA/NV (BUD) reported a small beat and reaffirmed for the year; shares are up this morning; Keurig Dr Pepper Inc. (KDP) reported an in-line report; we took off long list due to earnings quality; Pilgrim’s Pride (PPC) share price up on earnings; will be more supply going forward; KDP remains on the long bench
Gaming, Lodging & Leisure: Sean Jenkins - 00:09:03
- Sports Betting: Voting for the California sports betting bill will take place on November 8th; Governor Newsom came out in opposition to the commercial version of the bill; we don’t see this as too much of a negative catalyst at this point
- Travel + Leisure Co. (TNL): Reported this morning; slight miss on headline number relative to consensus; vacation ownership segment had a decent quarter; sales growth in vacation ownership segment is still down relative to 2019; we don’t see this as a major readthrough to Marriott Vacations Worldwide Corp.’s (VAC) earnings; VAC remains a long
Retail: Brian McGough - 00:16:05
- MarineMax (HZO): Company put out a tremendous quarter; guided down next year to $7.90 vs. Street at $8.50; numbers are going to come down; management seeing a crack in overall demand equation; HZO remains a short
- O'Reilly Automotive, Inc. (ORLY): Nice beat out of O’Reilly; we still like Driven Brands Holdings Inc. (DRVN) and Mister Car Wash, Inc. (MCW) in this space; Advance Auto Parts, Inc. (AAP) might rally on this; ORLY is taking share from AAP; DRVN remains a long, MCW remains on the long bench, and AAP remains on the short bench
- Amazon.com, Inc. (AMZN): Reports after the close today; should be a good headline but guide should be bad; probably won’t be a good day tomorrow for Amazon; AMZN remains on the long bench
Healthcare Policy: Emily Evans - 00:28:01
- Pfizer, Inc. (PFE): Put a note out on Pfizer in regard to several FOIA requests
Macro, Housing & Financials: Drago Malesevic - 00:32:37
- Tomorrow, October 28 at 10:00 AM ET – Financials Black Book
- Fiserv (FISV): Reported $1.63 which is up 11% YoY; consensus was at $1.69; added to long list because 86% of their top-line is domestically sourced; EPS faced a negative impact; revenues were in-line with expectations; updated full-year guidance, took up bottom end of prior guidance; FISV remains a long
REITs: Rob Simone - 00:37:02
- Invitation Homes, Inc. (INVH): Reported earnings and the quarter was a disaster; slashed their SSNOI outlook below the low-end of the prior range; numbers need to and will be coming down; we also think capex estimates, including our own, need to come up which will obviously result in lower AFFO estimates going forward; INVH remains a short
Industrials: Jay Van Sciver - 00:42:33
- Tesla (TSLA): Report from Reuters yesterday that Tesla is under criminal investigation for self-driving claims; TSLA remains a short
- Caterpillar Inc. (CAT): Book-to-bill coming down; significant deceleration in orders; quarter itself looked good, but this reflects orders that were received a while ago
- TriNet Group, Inc. (TNET): Removed from best idea short list; typically, this group does better in Quad 4 but we now have guidance for a meaningful ramp in benefit costs for health insurance
Technology: Ami Joseph - 00:48:39
- Coursera, Inc. (COUR): Reported last night; latest data has reaccelerated, and trends are looking good
Communications: Andrew Freedman - 00:51:19
- Tomorrow, October 28 at 12:30 PM ET – Communications Wrap Call
- Meta Platforms, Inc. (META): Reported earnings; biggest surprise was their guidance for 2023 operating expense and CapEx; revenue was okay; guided to flat organic growth for Q3; operating income down 46%; metaverse spending coming in way above expectations; CapEx was up 111% YoY on the quarter; going in the wrong direction very quickly; Zuckerberg is pushing hard and fast to build metaverse and is spending a lot of money to do so; we are sticking with the short; META remains a short
Telecom-Media Policy: Paul Glenchur - 00:58:31
- Today, October 27 at 10:00 AM ET – Telecom-Media Policy/Midterms Update Call
- Midterm Elections & Antitrust Legislation: Hosting a call today at 10am ET to discuss the impact of the midterm elections on the big tech agenda
China: Felix Wang - 00:59:51
- New Oriental Education (EDU): Soared 30% during the day yesterday; stock that doesn’t get talked about enough; reported earnings yesterday and crushed expectations; guided higher than the Street; have turned a new page in the education industry; EDU remains a long
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