Bigger and Stronger America

Client Talking Points

Growth Accelerating?

Back in 2012, we went from #GrowthSlowing to #GrowthStabilizing. Now that America has had some time to digest the move and we're getting awesome labor market and housing reports week-after-week, perhaps we are ready to move to #GrowthAccelerating? Consider this data:

 

  1. ISM Manufacturing New Orders accelerated from 53.3 in JAN to 57.8 in FEB
  2. ISM Services New Orders accelerated from 54.4 in JAN to 58.2 in FEB
  3. PMI Manufacturing New Orders accelerated from 58.2 in JAN to 60.2 in FEB

"Not too shabby," some would say. Well if you combine that with falling oil prices and a stronger dollar, you get growth and an uptick in consumption. That helps drives stocks as consumers flock out to the grocery store, unafraid of what the price of milk may be this week. Things are getting good and they are willing to get better. When that happens, everybody (except the bears!) wins.

 

Asset Allocation

CASH 24% US EQUITIES 24%
INTL EQUITIES 24% COMMODITIES 4%
FIXED INCOME 0% INTL CURRENCIES 24%

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

"I know, why use credible #WallSt2.0 sources when you can bang your head against the Old Wall #GDP" -@KeithMcCullough

QUOTE OF THE DAY

"In a mad world only the mad are sane." -Akira Kurosawa

STAT OF THE DAY

Private sector adds 198,000 jobs in February according to latest ADP report.


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