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Flying High Again

Client Talking Points

Can You Take Me Higher?

The Russell 2000 made another all-time high on Friday as the US stock market marked its sixth consecutive week of upside. Anyone in the perma-bear camp should reconsider their game plan, as you can only fight the broader market for so long before you get creamed. With the US dollar strengthening and heading back into bullish formation, we should continue to see positive momentum in stocks. Strong Dollar, Strong America. Keep in mind that the Bernanke commodity bubble popping and the 10-year yield hovering above 2.0% are a result of #GrowthStabilizing. Provided oil doesn’t hit $130 a barrel, the bulls will continue to win. 

Asset Allocation

CASH 55% US EQUITIES 10%
INTL EQUITIES 15% COMMODITIES 0%
FIXED INCOME 5% INTL CURRENCIES 15%

Top Long Ideas

Company Ticker Sector Duration
ASCA

We believe ASCA will receive a higher bid from another gaming competitor. Our valuation puts ASCA’s worth closer to $40.

FDX

With FedEx Express margins at a 30+ year low and 4-7 percentage points behind competitors, the opportunity for effective cost reductions appears significant. FedEx Ground is using its structural advantages to take market share from UPS. FDX competes in a highly consolidated industry with rational pricing. Both the Ground and Express divisions could be separately worth more than FDX’s current market value, in our view.

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.

Three for the Road

TWEET OF THE DAY

“BTW very sneaky for Obama to schedule the State of the Union Address for Mardi Gras” -@harmongreg

QUOTE OF THE DAY

We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology.” -Carl Sagan

STAT OF THE DAY

The CRB Commodity Index fell -1.3% last week while CRB futures/options contracts shot up +11%.