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Q4: ANOTHER SOLID QUARTER FOR HOTEL TRANSACTIONS

Following up on a blockbuster Q3, pricing and volume of hotel transactions were strong again in Q4.  Positive for HOT.

 

 

Upper upscale (UUP) & Luxury Transaction Trends for Q4 2013

  • Q4 2013 worldwide hotel transactions (UUP & Luxury brands) volume was a little more than $3 billion, roughly the same as last year’s quarter and below the monster $5 billion seen in Q3.
  • The number of US luxury/UUP hotel transactions (where price was disclosed) was 17 in Q4 2013 - flat sequentially and 8 more than in Q4 2012.
  • The number of non-US luxury/UUP hotel transactions (where price was disclosed) was 8 in Q4 2013 – flat sequentially and 5 more than in Q4 2012.
  • Relative to a two-year trailing average, US average price per key (APPK) in the UUP segment fell 42% to $155k due to HST’s bargain purchase of Times Square Marriott Marquis.
  • Luxury APPK was strong particularly overseas where there were several +$million APPK deals

GLL companies

Host Hotels

  • Bought Times Square Marriott Marquis at $10K APPK
  • Sold Dallas Addison Marriott Quorum for $101K APPK
  • Sold Philadelphia Marriott Downtown for $217K APPK
  • Sold Courtyard Paris La Defense West – Colombes for $165K APPK
  • Sold Portland Marriott Downtown Waterfront for $175K APPK

Marriott

  • Sold Renaissance Chicago Downtown for $251K APPK

Hyatt

  • Sold Hyatt Key West Resort and Spa for $644K APPK

Starwood

  • Sold Westin San Fran Airport/ Aloft San Fran Airport for $193K APPK

Q4: ANOTHER SOLID QUARTER FOR HOTEL TRANSACTIONS - A1

 

Q4: ANOTHER SOLID QUARTER FOR HOTEL TRANSACTIONS - A


MACAU: NO GROWTH MEANS GROWTH

Even if current levels of business are maintained but not increased, 2014 would still generate YoY growth +12%.

 

  • As can be seen in the chart below, we are projecting 2014 YoY GGR growth of +16%
  • Considering that YoY growth would still be 12% if Q4 2013 business levels are projected out throughout 2014 (seasonally adjusted) with no growth, our estimate may prove conservative
  • Our January and February YoY projections are likely well ahead of the Street (it’s just the math) so current stock momentum could continue

MACAU: NO GROWTH MEANS GROWTH - ggr



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Introducing #Firefly Space Systems

“For man to truly understand himself, he must travel beyond the clouds”

– Socrates

 

When I saw my first Space Shuttle launch as a child, I knew I wanted to be an astronaut.

 

After I made my first real money selling PayPal/eBay stock, I bought a ticket on Virgin Galactic to go to space aboard SpaceShipTwo. I later bought a second seat on Space Expedition Corporation’s Lynx. As I became more involved in the Newspace community I began speaking at conferences and universities around the world – the topic being “The Potential for & Impact of Commercial Space & Space Tourism”.

 

Today, alongside my research and engineering team @Hedgeye, I am co-founding Firefly – a ground-based, small satellite launch company, with one of Hedgeye’s greatest supporters and fans, PJ King, as well as propulsion engineer extraordinaire, Tom Markusic.

 

With a Ph.D. from Princeton in Mechanical & Aerospace Engineering, Tom has conducted research on deep space propulsion systems and since 2006 has held senior leadership positions inside virtually every leader in the Newspace Industry: Elon Musk’s SpaceX, Jeff Bezos’ Blue Origin and Richard Branson’s Virgin Galactic. Tom is Firefly’s CEO and from what I have seen, he will be a fantastic entrepreneur and business executive.

 

Lowering the cost of small satellite launches to Low Earth and Sun Synchronous Orbits will revolutionize broadband data delivery and earth observation missions. What used to cost hundreds of millions of dollars, is rapidly becoming available in the single digit millions.

 

While the leaders in the nascent and rapidly developing small sat industry (companies such as PlanetIQ, Skybox, Planet Labs, and numerous others) have raised VC funds well in excess of $100M in the last 1-2 years, there exists virtually no dedicated launcher capacity for these ventures to deliver their payloads to orbit.

 

With Hedgeye’s help, Firefly will change this.

 

We have rapidly received our seed funding commitments and are already in discussions with investors looking towards our Series A funding. Since our website launched and word of mouth has spread through the industry, we have been overwhelmed with resumes. We have established our headquarters in Austin, TX and research and development operations in Hawthorne, CA.

 

What we are setting out to do will be enormously challenging. It is difficult to make exact projections about schedule until we get further along in development, but the team has set itself a goal: To be in orbit in about three years.

 

Hedgeye has and will continue to support Firefly on a number of fronts: Josh Steiner (today he runs our Financials vertical but in the past he analyzed satellite operators) has worked with us on market sizing.

 

Jay Van Sciver, who leads Hedgeye’s Industrials team, has worked on valuation analysis for some of the private New Space players. Hedgeye will lend assistance in a variety of operational areas, ranging from finance and accounting to HR, facilities and IT.

 

We are not in the business of complaining about the 2008 crisis. We are in the business of cutting edge research, intellectual growth, and product innovation. So, I just wanted to take a few minutes this morning to thank you for your business – it’s helping us travel beyond the clouds.

 

Alongside our TREND duration view (bullish or bearish in brackets), our immediate-term Risk Ranges are now:

 

SPX 1 (bullish)

VIX 11.85-13.75 (bearish)

Pound 1.63-1.65 (bullish)

Natural Gas 4.20-4.51 (bullish)

Brent Oil 105.25-109.39 (bearish)

Gold 1186-1245 (bearish)

 

Onward and upward,

 

Michael Blum

President, Hedgeye Risk Management

 

Introducing #Firefly Space Systems - Chart of the Day

 

Introducing #Firefly Space Systems - Virtual Portfolio


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 8, 2014


As we look at today's setup for the S&P 500, the range is 26 points or 0.76% downside to 1824 and 0.66% upside to 1850.                                 

                                                                                              

SECTOR PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

EQUITY SENTIMENT:

 

THE HEDGEYE DAILY OUTLOOK - 10                                                                                                                                                                  

 

CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 2.56 from 2.55
  • VIX closed at 12.92 1 day percent change of -4.65%

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: Mortgage Applications, Jan. 3 (prior -6.3%)
  • 8:15am: ADP Employment Change, Dec., est. 200k (prior 215K)
  • 10:30am: DOE Energy Inventories
  • 11am: Fed to purchase $1b-$1.5b in 2036-2043 sector
  • 1:00pm: U.S. to sell $21b in 10Y notes in reopening
  • 2pm: Fed releases minutes of Dec. FOMC meeting
  • 3pm: Consumer Credit, Nov., est. $14b (prior $18.186b)

GOVERNMENT:

    • House, Senate appropriators continue talks on final FY 2014 spending bill, aiming for passage by Jan. 15 deadline
    • Treasury Sec. Jack Lew in Berlin for talks with German Finance Minister Wolfgang Schaeuble on growth, stability
    • 10am: Senate Banking Cmte panel meets to discuss GAO report on govt support for bank holding cos.

WHAT TO WATCH:

  • Mulally bows out of Microsoft race to helm Ford this year
  • Sherwin-Williams among paint makers ordered to pay $1.15b
  • Twitter taking questions via Twitter for 1st results since IPO
  • Apple to open 10th store in mainland China after Cook’s pledge
  • Chinese businessman says NYT bid faces obstacles: Reuters
  • N.Y. Times rejects meeting with China’s Chen Guangbiao: WSJ
  • WellPoint to sell contact lens site to Thomas H. Lee Partners
  • Federal probe targets banks over bond pricing: WSJ
  • Yahoo’s Mayer unveils content, advertising tools in rev. push
  • Cisco CEO pegs Internet of Things as $19t opportunity
  • JPMorgan fails to throw out California debt collection case
  • Madoff trustee tops $10b recovery with JPMorgan deal
  • Hedge funds trail stocks for 5th year with 7.4% return in 2013
  • EU puts banking-union credibility on line in resolution talks
  • Buick sales of 1m tops 1984 record set before China entry
  • Sirius beats subscriber targets, holds steady on 2014 ests.
  • U.K. home prices to extend advance this yr, Halifax says
  • Arctic cold cuts fuel supplies as refineries to pipes freeze

EARNINGS:

    • Bed Bath & Beyond (BBBY) 4:15pm, $1.15 - Preview
    • Constellation Brands (STZ) 7:30am, $0.91 - Preview
    • Global Payments (GPN) 4:01pm, $1.02 - Preview
    • Monsanto (MON) 8am, $0.64 - Preview
    • MSC Industrial (MSM) 7:30am, $0.95 - Preview
    • RPM Intl (RPM) 7:30am, $0.45 - Preview
    • UniFirst (UNF) 8am, $1.62

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • WTI Rises for Second Day as U.S. Crude Stockpiles Seen Declining
  • Soybeans Drop a Second Day as USDA Report May Show Ample Supply
  • Gold Mine Deals Seen Rebounding on Fire-Sale Prices: Commodities
  • Gold Drops Before Fed Minutes as Job Data May Signal Recovery
  • Arabica Coffee Resumes Gains Amid Index Change; Robusta Declines
  • Copper Fluctuates Before Release of Fed Policy-Meeting Minutes
  • Chinese Copper Demand Seen Boosted by Grid Target, Barclays Says
  • Rebar Ends Near Seven-Month Low on China Record Credit Hole
  • Sake Boom Revives Vintage Rice Strains as Abe Eyes Farm Exports
  • Arctic Cold Cuts Fuel Supplies as Refineries to Pipelines Freeze
  • Japan Police Probe Pesticide in Croquettes That Sicken Hundreds
  • Calls to Drop 1970s-Era U.S. Oil Export Ban Stir Political Fight
  • Seaborne Coal Demand May Pick Up in 1Q on Inventory Building
  • Indonesia Proposes Allowing Concentrate Exports as Ore Ban Looms

THE HEDGEYE DAILY OUTLOOK - 5

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - 6

 

GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 3

 

THE HEDGEYE DAILY OUTLOOK - 4

 

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 7

 

ASIAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 8

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - 9

 

 

The Hedgeye Macro Team

 

 

 

 

 

 

 

 

 

 

 

 

 



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