RIA DAILY PLAYBOOK
FOR RELEASE ON FRIDAY, JULY 20, 2012
CLIENT TALKING POINTS
THE JAPANESE DON’T LIE
While the US market is busy getting squeezed amid tepid volume and earnings, the Japanese are showing us how it’s really done. The Nikkei has continued to open post-US close with a solid gain, only to be slammed down into negative territory, closing down -1.4% this time around. The global industrial slowdown is among us and it is quite noticeable.
You can wax poetic all you want about particular names in stockpicking, but the reality is unless you backup your call with a timestamp, it’s just another idea. We have been short the S&P 500 since 1375 – yes it’s at 1376 now. We’re off by a point. This “rally” will not last, and please keep in mind that hope is not a risk management process.
LEAVING OIL BEHIND
It’s about that time. The US dollar has been in a bullish formation and we’ve been liking it since about April. We went short oil yesterday in the Hedgeye Virtual Portfolio. Yes, the US dollar is ready to rip higher. Never mind the bollocks associated with the turmoil in the Middle East, threats or suicide bombings. It simply doesn’t matter. All that talk of $200 a barrel oil is nothing but laughable at this point.
Cash: Down U.S. Equities: Flat
Int'l Equities: Flat Commodities: Flat
Fixed Income: Up Int'l Currencies: Flat
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.
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.
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.
THREE FOR THE ROAD
Tweet of the Day: “Indeed it looks like a free fall abyss @ekathimerini: Greece, Portugal & Spain are staring into the same economic abyss dlvr.it/1tQPQx” -@Nouriel
Quote of the Day: “When a person can no longer laugh at himself, it is time for others to laugh at him.” –Thomas Szasz
Stat of the Day: 4500 jobs to fill at the Solaire Manila Resort & Casino.