CLIENT TALKING POINTS
Tech Mate
Remember back in 2011 where you could be a great stockpicker by purchasing shares of Apple (AAPL) and letting them ride higher and higher like a balloon jammed to the gills with helium? Not the case these days, especially with management shakeups and disappointing price points on new products. Technology is performed awful in October as one of the worst sectors out there. The XLK fell a whopping -6.3% and Apple makes up a big portion of that ETF. So just think to yourself, with companies like Intel (INTL) and others missing on earnings, do you really think tech is still hot?
TOP LONG IDEAS
TCB
After a long downward slide, TCB has finally turned the corner. The margin has stabilized after the balance sheet restructuring. Loans are growing thanks to the equipment finance business. Non-interest income is more likely to go up than down going forward, a reversal from the past 18 months. Credit quality has a tailwind from a distressed housing recovery in TCB’s core markets: Minneapolis, Detroit and Chicago. On top of this, the CEO, Bill Cooper, is one of the oldest regional bank CEOs, which raises the probability that the bank will be sold. Expectations are bombed out at this point, so we think it’s time to move from bearish to bullish on TCB.
PCAR
Emissions regulations in the US focusing on greenhouse gases should end the disruptive pre-buy cycle and allow PCAR to improve margins. Improved capacity utilization, truck fleet aging, and less volatile used truck prices all should support higher long-run profitability. In the near-term, Paccar may benefit from engine certification issues at Navistar, allowing it to gain market share. Longer-term, Paccar enjos a strong position in a structurally advantaged industry and an attractive valuation.
HCA
While political and reimbursement risk will remain near-term concerns, on the fundamental side we continue to expect accelerating outpatient growth alongside further strength in pricing as acuity improves thru 1Q13. Flu trends may provide an incremental benefit on the quarter and our expectation for a birth recovery should support patient surgery growth over the intermediate term. Supply costs should remain a source of topline & earnings upside going forward.
Asset Allocation
| CASH | 58% | US EQUITIES | 6% | |
| INTL EQUITIES | 0% | COMMODITIES | 0% | |
| FIXED INCOME | 21% | INTL CURRENCIES | 15% |
THREE FOR THE ROAD
TWEET OF THE DAY
"The irony is exquisite: Obama does his job for a couple days and everyone yells: Game changer!!!" -@JonahNRO
QUOTE OF THE DAY
"So much of what we call management consists in making it difficult for people to work." -Peter Drucker
STAT OF THE DAY
Pfizer's profits fall -14% thanks to generic Lipitor.
