Andrew Freedman had never heard of Hedgeye before opportunity (literally) came knocking. A coffee machine which was intended for Hedgeye was mistakenly delivered to his door in the same office park. The appliance soon found its way to where it belonged.
Not long after, Freedman did too.
The Communications analyst has had more than a cup of coffee at Hedgeye. In this episode of Sector Head Spotlight, Freedman explains to Robert McGroarty how his process has changed, and remained the same, in his eight-plus years with the independent research firm.
Freedman got his start at Hedgeye working alongside veteran analyst Tom Tobin in Healthcare. He eventually moved to Communications, where he researches internet, media and telecommunications industries. After making some refinements, he continued to use a similar research method, a top-down process with three key components: top down (industry + thematic), (bottom up) fundamentals and data.
“I spend a lot of time focused on broader industry trends,” Freedman explains. “Where do I think the world will be three to five years from now within these individual industries? Which companies are most positively and negatively disposed to those prevailing trends?”
When it comes to fundamentals, Freedman focuses on companies’ balance sheets, capital structure and management. He considers all relevant valuation metrics. He also assesses the catalyst calendar for each stock, the event path and the risk/reward balance.
The third step is to be data-driven. That comes naturally for a self-proclaimed “data nut.”
“I’ve spent a lot of time crafting surveys, collecting alternative data and government data,” Freedman says. “There’s just so much, and a lot of it’s noise. I’m pretty good at figuring out where there’s signal. But leveraging those data insights to try to gain conviction and keep myself honest with the thesis. Thesis drift is real. I’m only human but I’d like to think if the facts change, I’ll change with that.”
More often than not, the constant pursuit of information puts Freedman in the right place at the right time, whether he’s trading investments or landing the ideal occupation.
“It’s not about the absolutes, it’s about the rate of change,” he says. “It’s not necessarily about the destiny, but the path in how we get there.”
In the coming weeks, we will feature several other analysts on Sector Head Spotlight. Stay tuned.
