CLIENT TALKING POINTS
In With The New
2013 is an exciting year for us at Hedgeye. We’re all about following a process that works for us, owning up to our mistakes and taking on new challenges every day. The #OldWall still doesn’t get it to a degree. They are still attending conferences where everyone plays by the rules and makes sure to discuss year-old topics with a certain vagueness as to not offend anyone. Our analysts are the best of the best and don’t have things like brokerage to get in the way of their decision-making process. When we trade stocks, we use a combination of quantitative and fundamental, bottom-up research that helps us determine a risk and a range for each name. If you stay within that range, you’ll do a lot better than throwing darts blindly into the wind.
Hammer Time
One of the themes from our Q1 2013 Global Macro Themes call was #HousingHammer and boy, is it Hammer Time. This week has been quite a boon to the housing market with some truly significant data coming out on the mortgage application and housing starts front. Throw in a superb Jobless Claims print of 335,000 and you’ve got something to get excited about. The Street consensus isn’t as bullish as they should be on housing; we suggest they take a closer look at the market.
TOP LONG IDEAS
ASCA
We believe ASCA will receive a higher bid from another gaming competitor. Our valuation puts ASCA’s worth closer to $40.
ADM
ADM has significantly lagged the overall market in 2012 over concerns that weakness in the company’s bioproducts (ethanol) and merchandise and handling segment will persist. Ethanol margins suffered from higher corn costs, as well as weak domestic demand and low capacity utilization across the industry. Merchandising and handling results were at the mercy of a smaller U.S. corn harvest. Both segments could be in a position to rebound as we move into 2013 and a new crop goes into the ground. With corn prices remaining at elevated levels, the incentive to plant corn certainly exists, and we expect that we will see corn planted fencepost to fencepost.
HOLX
HOLX remains one of our favorite longer-term fundamental growth companies given growing penetration of its 3D Tomo platform and high leverage to the 2014 Insurance Expansion from the Affordable Care Act.
Asset Allocation
| CASH | 52% | US EQUITIES | 12% | |
| INTL EQUITIES | 18% | COMMODITIES | 0% | |
| FIXED INCOME | 0% | INTL CURRENCIES | 18% |
THREE FOR THE ROAD
TWEET OF THE DAY
“Phrase "deeply regret" has really lost its way. I'm pretty sure you can't regret something someone else did (or another country)” -@ianrosen
QUOTE OF THE DAY
“If a man does his best, what else is there?” -General George S. Patton
STAT OF THE DAY
China Q4 GDP rises 7.9% vs estimates of 7.8%
