If the performance of mega-cap Tech stocks blinded perma-bulls from economic reality, Q2 earnings reports should remove any doubt: the average company – think the Leslie's, Inc. (LESL) of the world – are sinking at a stunning rate.
“We shorted Leslie’s around $13.50, and thought it had downside to $8. Now it’s gone well below that,” Retail analyst Jeremy McLean explains on The Call @ Hedgeye after the stock dropped nearly 20% yesterday. “Our Short thesis has played out with the big earnings revision.”
“For people who don’t think earnings matter, just because that’s a thing to say, Leslie’s Pools only had to do a -1% growth number and instead they do -12%,” adds Keith McCullough. “The fact of the matter is they reported reality, and the stock collapsed from collapsed levels. We’re reminding people of this throughout earnings season.”
McCullough hammered this point home later in the morning on The Macro Show:
“Go to a casino for three straight days, get a bankroll, then assume everything that happened to you for three days is the real-world economic cycle. What’s going on with you and your issues in the casino (i.e., Apple stock trading) has nothing to do with what’s in the real world and what Leslie’s Pools is going to report.”
Watch the full clip above.
