The New America

RIA DAILY PLAYBOOK     

FOR RELEASE ON WEDNESDAY, JULY 18, 2012

 

CLIENT TALKING POINTS

 

BACK TO SUPER MARIO LAND

Italy is just in full blown destruction mode with the MIB index down -21% from its year-to-date top. Their debt problem is so big that almost no one can bail them out. Come September 12th, Mario Monti and his cronies will have some explaining (read: begging) to do in order for the German Parliament to sign off on whatever package they end up getting.   

 

YOU BETTER GET TO WORK

Oh goodness. We almost felt sorry for Ben Bernanke yesterday when Senator Chuck Schumer started berating him to “get to work.” Yes, we realize that Congress will never agree on anything ever again and that the US political machine is broken. But demanding Bernanke “get to work” because the last bastion of hope is the Federal Reserve? Please.

 

EMBRACE THE CASH

Having a 100% cash position isn’t always the right call. Sure, we’re fond of it, but you need to have some wiggle room for when the market gives you an entry point for a specific sector. Keep your exposure to equities and commodities low and you’ll be fine out there. Fade that beta.

 

ASSET ALLOCATION

 

Cash: Down                U.S. Equities: Flat

 

Int'l Equities: Flat Commodities: Flat

 

Fixed Income: Up        Int'l Currencies: Up

 

TOP LONG IDEAS

 

PSS WORLD MEDICAL (PSSI)

The bulk of the bad news is on the table following disappointing F2012. Rebased F2013 estimates far more reasonable, and revenues should be supported by our expectations for rising physician utilization, and in the near-term, a flu season that is shaping up as a considerable tailwind.

                             

TRADE: LONG

TREND: LONG

TAIL: NEUTRAL

 

HCA (HCA)

SS volume accelerated in 1Q12 and employment remains a tailwind to both admissions & mix. We expect acuity to stabilize and births and outpatient utilization to accelerate out of 1Q12, while supply cost management continues as a margin driver and acquisition opportunities remain a source for upside.

 

TRADE: NEUTRAL

TREND: LONG

TAIL: NEUTRAL

 

UNDER ARMOUR (UA)

The company continues to control its own destiny through investments in all the right areas. We think 30%+ top line and EPS growth for 5+ years. One of its failures, however, has been in penetrating markets outside the US. That will happen. But for now, its failure is a competitive advantage in the face of a strengthening dollar. We like it in sympathy with a LULU sell-off.

 

TRADE: LONG

TREND: LONG

TAIL: LONG

 

THREE FOR THE ROAD

 

Tweet of the Day: “$CORN RT @douglas_blake: I'd go see Dark Knight Rises this weekend, but I can't afford the Popcorn.”-@ReformedBroker

 

Quote of the Day: “Glory is fleeting, but obscurity is forever.” –Napoleon Bonaparte

 

Stat of the Day: In the last three months, 225,000 net jobs were added in America. During that same time period,  246,000 were added to Social Security’s disability insurance.

 

 

 

 

 

 


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