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Got #GrowthDivergences Yet?

Takeaway: Country/sector/asset picking matters in a lower variance, divergent performance environment.

Hedgeye’s Macro Team recently released our Q1 Macro Themes—three key global macro forces we believe will play a dominant role in shaping the markets near term.

 

 #GrowthDivergences is one.

 

Looking to the U.S., Europe, China and Japan, we see the heavyweights of the world economy diverging from an economic growth perspective as some countries and/or regions are much further along in the economic cycle than others. We highlight those divergences and identify which countries and/or regions you want to be allocating assets to at the start of the year.

 

Our macro call is bearing fruit. Take a look.

 

Got #GrowthDivergences Yet? - Growth Div

 

The point here is that country/sector/asset picking matters in a lower variance, divergent performance environment.  Some big YTD divergence…and the YTD is only a few weeks old.  

 

This is a complimentary excerpt from Hedgeye research.

Join the Hedgeye Revolution today.  


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 23, 2014


As we look at today's setup for the S&P 500, the range is 28 points or 0.91% downside to 1828 and 0.60% upside to 1856.                     

                                                                                                          

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: 2.45 from 2.47
  • VIX closed at 12.84 1 day percent change of -0.23%

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Chicago Fed Nat Act. Index, Dec., est. 0.9 (pr 0.6)
  • 8:30am: Init Jobless Claims, Jan. 18, est. 330k (pr 326k)
  • 8:58am: Markit US PMI Preliminary, Jan., est. 55 (pr 54.4)
  • 9am: FHFA House Price Index m/m, Nov., est. 0.4% (pr 0.5%)
  • 9:45am: Bloomberg Consumer Comfort, Jan. 19 (prior -31.0)
  • 10am: Existing Home Sales, Dec., est. 4.93m (prior 4.9m)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural-gas storage change
  • 10:am: Leading Index, Dec., est. 0.2% (prior 0.8%)
  • 11am: Kansas City Fed Manuf, Jan., est. 2 (prior -3)

GOVERNMENT:

    • FCC set to begin first major airwaves auction since 2008
    • 8:30am: CSIS holds conference on U.S-Australia relations, incl Australian Minister for Foreign Affairs Julie Bishop, White House Council of Economic Advisors Chairman Jason Furman
    • 10am: U.S. Conference of Mayors holds annual meetings; speakers incl Cordray; HHS Sec. Kathleen Sebelius; Education Sec. Arne Duncan
    • 12:30pm: NASA holds teleconference on agency’s Earth science activities planned for 2014
    • 12:45pm: Media briefing by Press Sec. Jay Carney
    • Postponed: SEC open meeting on 2014 budget for Public Company Accounting Oversight Board
    • Privacy Oversight Board says NSA program illegal: N.Y. Times

WHAT TO WATCH:

  • Lenovo to acquire IBM’s server unit for $2.3b in cash, stock
  • EBay says Icahn proposes PayPal spinoff after taking stake
  • Berkshire said to face start of U.S. systemic-risk scrutiny
  • China manufacturing index trails estimates as orders cool
  • Toyota beats GM, VW in 2013 car sales, sees 3% growth this year
  • Microsoft will allow foreign customers to store data overseas
  • Credit Suisse sued by China Green chief over alleged negligence
  • Haniel, Elliott close to agreement over Celesio stake: Boersen
  • Target’s virus linked to 23-year-old southern Russian: WSJ
  • Swiss raise bank capital buffer to rein in real estate market
  • Banks aid U.S. forex probe to fulfill duty in Libor settlements
  • Most JPM employees didn’t get raise due to legal bills: Reuters
  • Iceland traps hedge funds in refusal to discuss bank claims
  • Euro-area January factory output expands more than forecast

AM EARNS:

    • Alaska Air Group (ALK) 6:01am, $1.07
    • AmerisourceBergen (ABC) 6:15am, $0.78 - Preview
    • Avnet (AVT) 8am, $1.11
    • BankUnited (BKU) 7:30am, $0.46
    • Baxter International (BAX) 7am, $1.25  - Preview
    • CapitalSource (CSE) 9am, $0.17
    • Cypress Semiconductor (CY) 8am, $0.08
    • Fairchild Semiconductor Intern (FCS) 7:30am, $0.09
    • Fifth Third Bancorp (FITB) 6:30am, $0.42
    • Janus Capital Group (JNS) 7am, $0.19
    • Johnson Controls (JCI) 7am, $0.70
    • KeyCorp (KEY) 6:14am, $0.25
    • Lockheed Martin (LMT) 7:25am, $2.11 - Preview
    • McDonald’s (MCD) 7:58am, $1.39  - Preview
    • MGIC Investment (MTG) 7am, ($0.02)  - Preview
    • National Penn Bancshares (NPBC) 6:31am, $0.17
    • Popular (BPOP) 8am, $0.65
    • Southwest Airlines Co (LUV) 6:35am, $0.29
    • Union Pacific (UNP) 8am, $2.49
    • United Continental Holdings In (UAL) 7:30am, $0.71

PM EARNS:

    • Altera (ALTR) 4:15pm, $0.31
    • Celanese (CE) 4:30pm, $1.01
    • Compuware (CPWR) 4:05pm, $0.14
    • Cubist Pharmaceuticals (CBST) 4pm, break-even - Preview
    • Discover Financial Services (DFS) 4:05pm, $1.19
    • E*Trade Financial (ETFC) 4:05pm, $0.19
    • Federated Investors (FII) 4:02pm, $0.37
    • Hexcel (HXL) 4:06pm, $0.46
    • Informatica (INFA) 4:05pm, $0.48
    • International Game Tech (IGT) 4:15pm, $0.31  - Preview
    • Intuitive Surgical (ISRG) 4:05pm, $4.02
    • Juniper Networks (JNPR) 4:05pm, $0.36 - Preview
    • KLA-Tencor (KLAC) 4:15pm, $0.80
    • Leggett & Platt (LEG) 4:05pm, $0.33
    • Maxim Integrated Products (MXIM) 4pm, $0.40
    • Microsoft (MSFT) 4:01pm, $0.69 - Preview
    • ResMed (RMD) 4:05pm, $0.64
    • Starbucks (SBUX) 4:03pm, $0.69 - Preview
    • Synaptics (SYNA) 4:05pm, $0.90

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • WTI Crude Trades Near Three-Week High Before U.S. Inventory Data
  • Rubber Output in Thailand Seen Dropping as Growers Join Protest
  • Australia Drought Spurs Beef-Sales Boom on Herd Cut: Commodities
  • Copper Touches One-Week Low as Manufacturing Contracts in China
  • Gold Rises From Two-Week Low as Investors Weigh Demand, Tapering
  • Wheat Climbs on U.S. Freeze Concern and Signs of Import Demand
  • Coffee Rebounds as Vietnam Sales Slow Before Tet; Cocoa Advances
  • Platinum Strike Paralyzes Mines as Intimidation Claims Arise
  • China Rebar Has Biggest Gain in Three Months on Restocking Hopes
  • Iran’s Rouhani Invites Oil Companies to Invest as Sanctions End
  • Arctic Air Blankets Northern U.S. as Texas Set to Receive Snow
  • Alaska Coastal Oil Drilling Challenge Revived by U.S. Court
  • Traders Buying Dutch Weaken U.K. Gas Market: Chart of the Day
  • Platinum Tops Gold by Most Since ’11 on Strike: Chart of the Day

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

 

 

 

 

 

 

 

 

 

 

 

 

 


Opportunity Knocked

This note was originally published at 8am on January 09, 2014 for Hedgeye subscribers.

“There was certainly never a more inopportune time to launch a new business.”

-S.S. McClure

 

That’s what Irish born Samuel Sidney McClure said after the Panic of 1893 as he founded one of the most important investigative research companies in US history – McClure’s Magazine.

 

“He dreamed of creating a full time staff of writers who would be guaranteed salary and generous expense accounts. The job of staff writer was a new concept; in years to come, McClure would claim he himself almost invented it – a justifiable assertion…” (Doris Kearns Goodwin in The Bully Pulpit, pg 169)

 

Old School Research. That was what McClure’s Ida Tarbell, who exposed Standard Oil to America and helped force its breakup, did. Today’s stroking of government officials and storytelling execs in exchange for media access would be considered shameful back then. We started Hedgeye in 2008 to change that. Rather than fearing the system itself, opportunity knocked to change it.

 

Back to the Global Macro Grind

 

With change comes trial and error. The first thing we needed to change was the platform of delivery. Not having the conflicts of interests embedded in a broker-dealer, investment bank, or advertising business was an easy change to make.

 

Changing the process, language, and pace of research communication was tougher. Technology (Google, Twitter, @HedgeyeTV, etc.) is now making this less tough. When your principles are transparency, accountability, and trust – all tech tools can do is expedite your vision.

 

Given the circumstances (a raging bull stock market), I think our analysts have done a great job shining a flashlight on what’s really going on at big US corporations in the last year: Caterpillar (CAT), McDonald’s (MCD) and Kinder Morgan (KMI) – that something is not always good. On macro matters however, some of the best opportunities in the last year have been in revealing what’s actually improving.

 

Today we’ll be hosting our most popular Institutional Research event – our Q1 Global Macro Themes Conference Call. If you’re an institutional investor, please ping Sales@Hedgeye.com for access.

 

Our Macro Research Team does this call quarterly. There are 3 themes per call with anywhere from 45-75 slides of proprietary research and data. The idea of the call is to highlight the big themes in macro that are A) changing or B) trending.

 

In the case of A):

  1. Our models focus on rate of change (2nd derivative, slope of the line)
  2. The 3 Big Macs (macro factors) Growth, Inflation, and Policy (our GIP Model)
  3. Inflation is going to be the biggest change we focus on today (both locally and globally)

In the case of B):

  1. This happens most of the time in macro – that’s why we call them TRENDs (they trend)
  2. @Hedgeye TRENDs can either be cyclical or secular (sometimes both)
  3. On Twitter, I highjack the hash-tag on TRENDs we see developing before consensus does (#RatesRising, for example)

Today’s Hedgeye research hash-tags (Global Macro Themes for Q1) are going to be as follows:

  1. #InflationAccelerating
  2. #GrowthDivergences
  3. #FlowShows

#InflationAccelerating is a reversal from former Hedge Macro Themes #DeflatingTheInflation and #Bubble#3.

 

I know, too many hash-tags!

 

Bubble #3, of course, was Bernanke’s Commodity Bubble (2011-2012). You know, the one where you saw all time highs in Gold, Food, etc. – the one where the Fed would say they “see no inflation, because there is none in iPods.”

 

So that deflated (commodities crashed), and now The Economist has “The Perils of Deflation” on its cover as Ben Bernanke takes a “nailed it” victory lap around the weenie bins.

 

Inflation expectations are already rising. But you already know that – because we don’t do research on a lag. That and the #GrowthDivergences you are seeing manifest between Europe and Asia aren’t new either. With South Korea’s KOSPI -3.3% YTD versus Austria and Denmark’s stock market’s already +4.7% YTD, Mr. Macro Market gives you the research “call” every day.

 

From our un-conflicted and un-compromised financial media distribution platform, all we have to worry about is staying true to our principles. They will inevitably lead us to the truth. And, while there will never be an opportune time to be wrong about the truth, there will always be an opportunity to learn from our mistakes and improve our investigative research process.

 

Our immediate-term Risk Ranges are now:

 

SPX 1825-1850

DAX 9467-9613

KOSPI 1928-1978

VIX 11.91-14.45

USD 80.73-81.34

Gold 1191-1246

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Opportunity Knocked - Chart of the Day

 

Opportunity Knocked - Virtual Portfolio


Attention Students...

Get The Macro Show and the Early Look now for only $29.95/month – a savings of 57% – with the Hedgeye Student Discount! In addition to those daily macro insights, you'll receive exclusive content tailor-made to augment what you learn in the classroom. Must be a current college or university student to qualify.

FIRST DOWN, INDIA

Takeaway: Independent policy proposals put forth today by the RBI & economic affairs committee are structurally positive for India’s GIP fundamentals.

CONCLUSIONS:

 

  1. We continue to think that India makes meaningful progress on the economic reform front in 2014. Specifically, this is likely to be the year that both monetary and fiscal policy finally address the country’s long-standing structural imbalances.
  2. India does, however, remain a certified disaster on our proprietary EM Crisis Risk Index (which was well out front of the INR's mid-summer plunge to all-time lows), so now might not be a good time to load up on your India exposure.
  3. Moreover, a base effect (easy comps) and annualized currency weakness are likely to contribute to #InflationAccelerating in 1H14 and incremental monetary tightening – perhaps beyond the ~two +25bps hikes over the NTM that are currently priced into the OIS market.
  4. That being said, however, long-term investors might just want to think about loading up on some longer-dated call options for India’s capital and currency markets. It's worth noting that the MSCI India Index is up +2.3% since our bullish OCT 29th note titled, “INDIA’S ‘TURNAROUND’ STORY CONTINUES”. That represents a material degree of alpha when benchmarked to the -5.8% decline in the MSCI Emerging Market Index over that time frame.
  5. By the time we are well into 2H14, we could be looking at a setup where easy comps and reform-minded foreign capital inflows have perpetuated a rebound in Indian economic growth and a structurally improved GIP outlook. Moreover, inflation should finally be well on its way to meeting the RBI’s proposed +8% 2014 target by then.

 

Today, we received not one, but two positive pieces of news out of India today. The first was the monetary policy guidelines proposed by the RBI (headed by governor Dr. Raghuram Rajan) and the second was the proposal to ease foreign investment quotas, as well as a general deregulation of foreign investment out of the economic affairs committee (headed by economic affairs secretary Arvind Mayaram).

 

Both proposals are still very much in the early innings (the RBI’s proposals need official support from Indian parliament; there is an APR 3rd deadline to submit a final proposal for the foreign investment rule changes), so we won’t waste any of your time digging into the weeds now. Instead, here are some key highlights we find supportive for the structural economic transformation India is undergoing – as outlined in our OCT 29th note titled, “INDIA’S ‘TURNAROUND’ STORY CONTINUES”:

 

  • RBI Monetary Policy Proposal
    • Adopt CPI as the official target for monetary policy in lieu of the outdated WPI series (it’s 60-plus years-old and does not account for India’s growing services sector);
    • Target +8% YoY CPI by EOY ’14 (at +9.9% YoY as of DEC ’13), +6% YoY by EOY ’15 and then implement a +4% YoY midpoint target in 2016 with a +/- 200bps band;
    • Implement a rolling 2Y time horizon for returning CPI to the midpoint of the target range;
    • Start releasing the minutes of its monetary policy committee meetings;
    • Produce a thorough bi-annual inflation report; and
    • Formally institute an officially independent monetary policy committee.
  • Foreign Investment Deregulation Proposal
    • Scrap separate caps on foreign direct investment (FDI) and foreign portfolio investment (FPI);
    • Apply a broad 49% cap across all sectors and industries in the proposed new composite cap on foreign investment (most sectors are capped at/around 24% currently); and
    • Streamline the registration and compliance processes.

 

The RBI’s proposals are structurally positive for the Indian economy because they directly target the #1 problem holding back Indian economic growth and development: inflation. Indeed, persistently elevated inflation has quashed a great deal of India’s growth potential in recent years, which is something we’ve been consistently pounding the table on over the past 3Y.

 

The issue with the RBI’s proposals lie in the fact that it will require parliamentary approval to set anything in stone, so these may just be soft guidelines that they follow for now.

 

In that vein, we have little color the outcome of the general elections (due by MAY ‘14), though early indications continue to suggest the opposition BJP (led by pro-business Narendra Modi) is likely to overwhelm the “ruling” Congress Party in nationwide polls. Refer to our OCT 21st note titled, “ASIAN POLICY PROPULSION?: JAPAN AND INDIA SOUND OFF” for more details on how investors might capitalize on India’s changing political landscape.

 

Another issue is that their targets incorporate a fair amount of fiscal consolidation into their forecasts (i.e. a budget deficit equivalent to 3% of GDP by 2017, down from 5.7% as of 3Q13) – effectively sending a shot across the bow to fiscal policymakers.

 

FIRST DOWN, INDIA - Budget Balance

 

It remains to be seen if the latter will choose to comply with the former’s call to action; aggressive subsidy expenditures, profligate welfare spending and generally poor revenue forecasting continue to weigh on India’s fiscal position – effectively threatening a credit ratings downgrade to junk status over the intermediate term. Alas, we’ll see…

 

One final hurdle we see preventing the RBI from accomplishing its goals on the inflation front is India’s generally shoddy infrastructure, which contribute to supply bottlenecks, etc. that manifest in largely unchecked inflationary pressures across the economy. Per the World Economic Forum’s 2013-14 Global Competitiveness Report, India remains a Stage #1 factor-driven economy (well behind its peers in the EM space) and its Pillar #2 infrastructure score of 3.7 (1-7 scale) ranks 85th in the 148-country sample.

 

FIRST DOWN, INDIA - Countries at Each Stage of Development

Source: World Economic Forum’s 2013-14 Global Competitiveness Report

 

FIRST DOWN, INDIA - GCI

Source: World Economic Forum’s 2013-14 Global Competitiveness Report

 

FIRST DOWN, INDIA - Infrastructure

Source: World Economic Forum’s 2013-14 Global Competitiveness Report

 

FIRST DOWN, INDIA - MPFFDB

Source: World Economic Forum’s 2013-14 Global Competitiveness Report

 

One way India can help alleviate this headwind, at the margins, is by importing foreign capital to promote sustainable investments in undersupplied sectors such as transportation, storage and power infrastructure. But the only way for capital inflows to be rewarded for targeting “I” – instead of merely financing incremental “G” and “C” in the C+I+G+NX GDP equation – is for India to get inflation under control and its fiscal house in order. A dose(s) of economic reform won’t hurt either.

 

FIRST DOWN, INDIA - Current Account Deficit

 

That’s precisely why the proposal to deregulate foreign investment matters. India is a current account deficit nation, so to the extent policymakers can implement prudent fiscal policy and promote sustainable levels of consumption growth, we can see capital being diverted to much-needed areas in the investment arena.

 

So, India, what’s it gonna be: will 2014 be the year that both monetary and fiscal policy finally address the country’s long-standing structural imbalances or will 2014 come and go like years past with all its promises of reform and nothing to show for it?

 

For now, it appears increasingly likely that the answer to that question is that India makes meaningful progress on the economic reform front in 2014. India remains a certified disaster on our proprietary EM Crisis Risk Index (which was well out front of the INR's mid-summer plunge to all-time lows) , so now might not be a good time to load up on your India exposure.

 

Moreover, a base effect (easy comps) and annualized currency weakness are likely to contribute to #InflationAccelerating in 1H14 and incremental monetary tightening – perhaps beyond the ~two +25bps hikes over the NTM that are currently priced into the OIS market.

 

FIRST DOWN, INDIA - CPI Comps

 

FIRST DOWN, INDIA - FX YoY

 

That being said, however, long-term investors might just want to think about loading up on some longer-dated call options for India’s capital and currency markets. By the time we are well into 2H14, we could be looking at a setup where easy comps and reform-minded foreign capital inflows have perpetuated a rebound in Indian economic growth and a structurally improved GIP outlook. Moreover, inflation should finally be well on its way to meeting the RBI’s proposed +8% 2014 target by then.

 

FIRST DOWN, INDIA - GDP Comps

 

Feel free to email us with follow-up questions. Have a wonderful evening,

 

DD

 

Darius Dale

Associate: Macro Team


EAT: THE BLUEPRINT FOR SUCCESS

Takeaway: It's time for DRI to pay attention.

We often articulate our view that EAT is one of the best managed companies in the restaurant space.  This morning’s press release and subsequent call merely adds conviction to this belief.  It was nothing short of an awesome quarter, as the company managed to surprise the street by beating revenues, EPS, and comp sales expectations.  Mind you, this performance comes amid a less than favorable macro backdrop and a three-month period in which we suspect the majority of casual dining companies struggled. 


The company’s ability to weather an adverse environment speaks volumes to the sound management and solidity of the business model.  What makes Brinker unique in a sense (at least compared to DRI and BLMN), is that they focus on doing one thing right – running the Chili’s brand as efficiently as possible.  This mindset is precisely what inspired the company to dwindle its portfolio down to two brands several years ago.  The casual dining industry has changed and management quickly realized the best way to deal with this fact, whether they liked it or not, was to adapt.  Accordingly, the company, management, and shareholders have been rewarded for this decision – the stock has nearly quadrupled since the beginning of 2009.  In many ways, Brinker should be viewed as the blueprint for success in the new age of casual dining.

 

This proves that when you have the right team in place, with the proper focus, your business can succeed when others don’t.  To this extent, we believe EAT has created a very efficient operating model and has the drivers in place (reimages, new kitchen equipment, tabletop media, Fresh Mex platform, delivery) to drive incremental efficiencies and gains over the long-term.  In addition, the company continues to fulfill its duty to shareholders by returning cash when they cannot justify reinvestment in the business. 

 

To be frank, the only issue we had with the quarter was declining traffic (-1.9%) at Chili’s.  Weather may have played a slight role in this, but we cannot ignore the fact that this comes on top of a -1.9% traffic decline in 2Q13.  This trend is obviously a red flag.  Management is aware of this issue and, when prompted, acknowledged that reversing this trend is a high priority.  We expect current initiatives to drive traffic over the long-term, but would certainly like to see this issue addressed sooner.  A more aggressive marketing strategy, implemented halfway through 2Q, could be a start.

 

What we liked in 2Q14 results:

  • Management maintained FY 2014 guidance.
  • Both revenues ($704.395mm) and adjusted EPS ($0.59) beat expectations by 84 bps and 134 bps, respectively.
  • Chili’s company-owned comp sales (+0.7%) beat expectations (-0.3%).
  • Maggiano’s comp sales (+0.9%) beat expectations (+0.6%), representing the 16th consecutive quarterly increase.
  • After tracking in line with the industry (Knapp Track) in 2HFY13, they began to take share in 1Q14 and accelerated that trend in 2Q14.
  • International portfolio, now at 291 restaurants after 7 openings in 2Q14, continues to grow.
  • Value scores are improving while, at the same time, operators are managing the business more efficiently.
  • Demonstrated the tremendous cost controls they have in place.
  • New kitchen equipment and server initiatives positively impacted labor costs.
  • Aggressively re-imaging restaurants, rolling out tabletop media, and building delivery which should, in our opinion, be able to drive incremental sales and traffic over the long-term.
  • The Fresh Mex platform has tested well and could drive traffic, stronger food scores and margin improvement due to the positive impact it will have on cost of sales.
  • YTD share repurchases of $93.1mm or 2.2mm shares, with $453mm still authorized.
  • $63mm of available cash on the balance sheet.

What we didn’t like in 2Q14 results:

  • Traffic at Chili’s was down -1.9% in 2Q14, after being down -1.9% in 2Q13.
  • Overall domestic franchise comp sales were down -0.7%.

 

EAT: THE BLUEPRINT FOR SUCCESS - chilis

 

EAT: THE BLUEPRINT FOR SUCCESS - maggianos

 

EAT: THE BLUEPRINT FOR SUCCESS - traffic

 

 

Howard Penney

Managing Director


GHL: REMOVING FROM INVESTING IDEAS

Takeaway: We are removing Greenhill & Co. (GHL) from Investing Ideas.

We are removing shares of Greenhill & Co. (GHL) after a strong run. Shares have reached the fair value level we argued for back when we added it to the Best Ideas list.

 

Greenhill was added to Investing Ideas on 11/22/13 and gained over 9% compared to a 2.8% return for the S&P 500.


For those investors who own GHL shares, and have a longer-term time horizon, we continue to see further upside potential over the intermediate to long-term as the M&A cycle renormalization continues, but we estimate that most of the short-term upside from improved M&A sentiment has now been priced in.

 

GHL: REMOVING FROM INVESTING IDEAS - greenhill1

 

 


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