• It's Coming...

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Client Talking Points

Check Your Levels

Trading the market with a process means you’re equipped with one of the best weapons out there. If you stay within your range and levels and use your process to execute trades, chances are you’ll do well out there or at the very least, you won’t lose money. Our support in the S&P 500 is 1364 and we told you to buy the bounce off of  that level. Sure enough, the market can’t break through that level and heads upward. This is by no means a bullish call. When the S&P 500 is oversold and you’re nearing support, you watch and wait. If support holds, you buy that bad boy and ride it toward your next level of resistance.

Asset Allocation

CASH 61% US EQUITIES 6%
INTL EQUITIES 0% COMMODITIES 6%
FIXED INCOME 15% INTL CURRENCIES 12%

Top Long Ideas

Company Ticker Sector Duration
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.

IGT

There is improving visibility on 20%+ EPS growth with P/E of only 11x with better content leading to market share gains. New orders from Canada and IL should be a catalyst. Additionally, many people in the investment community are out in Las Vegas at the annual slot show (G2E) and should hear upbeat presentations by management.

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.

Three for the Road

TWEET OF THE DAY

“The Petraeus news cycle started as ‘tawdry affair,’ crossed into ‘freakout about national security’ and is now back to ‘tawdry affair.’” -@moorehn

QUOTE OF THE DAY

“The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.” -Bertrand Russell

STAT OF THE DAY

OCT ADVANCE RETAIL SALES: -0.3% V -0.2%E; RETAIL SALES LESS AUTOS: 0.0% V 0.2%E