Just Charts - This Bud is for You!

INVESTMENT IDEAS

The table below lists our current investment ideas as well as a list of potential ideas we are in the process of evaluating (watch list).  We intend to update this table regularly and will provide detail on any material changes.

Just Charts - This Bud is for You!  - 1

 

Consumer Staples rose +0.4% week-over-week versus the broader market (S&P500) up +1.3%.  XLP is up 5.2% year-to-date versus the SPX at 5.5%.

 

EVENTS THIS WEEK

6/10/14 HAIN Piper Jaffray Consumer Conference 10:35am EST

6/10/14 REV Annual General Meeting TBD

6/11/14 BNNY William Blair Growth Stock Conference 9am EST

6/11/14 SMG William Blair Growth Stock Conference 3:40pm EST

6/12/14 JAH Annual General Meeting TBD

 

XLP remains bullish on immediate term TRADE and intermediate term TREND durations from a quantitative set-up.

Just Charts - This Bud is for You!  - 2

 

The Hedgeye U.S. Consumption Model has shown steady improvement over the past month, with 5 of the 12 U.S. Economic Indicators flashing green.

Just Charts - This Bud is for You!  - z us consump

 

Despite the bullish quantitative set-up for the sector, we continue to believe that the group is facing numerous headwinds, including:

 

  • U.S. consumption growth is slowing as inflation rises, in-line with the Macro team’s 1Q14 theme of #InflationAccelerating, and Q2 2014 theme of #ConsumerSlowing
  • The economies and currencies of the emerging market – once the sector’s greatest growth engine – remain weak with the prospect of higher inflation in 2014 eroding real growth
  • The sector is loaded with a premium valuation (P/E of 19.9x)
  • Less sector Yield Chasing as Fed continues its tapering program
  • The high frequency Bloomberg weekly U.S. Consumer Comfort Index (recently rescaled for cosmetic and not component reasons) has not seen any real improvement over the past 6 months, but rose to 35.1 versus 33.3 in the prior week

Just Charts - This Bud is for You!  - 44

Just Charts - This Bud is for You!  - 5

Just Charts - This Bud is for You!  - 66

 

TOP 5 WEEK-OVER-WEEK DIVERGENT PERFORMANCES

Positive Divergence:  HSH 10.6%; NWL 5.9%; SAFM 4.3%; NUS 4.0%; SJM 3.0%

Negative Divergence:  BNNY -14.1%; RDEN -8.7%; TSN -5.5%; LO -3.9%; FLO -1.7%

RECENT NOTES

 

QUANTITATIVE SETUP 

In the charts below we look at the largest companies by market cap in the Consumer Staples space from both a quantitative perspective and fundamental aspect where we can offer one.  As you will see over time, sometimes our fundamental view does not align with the quantitative setup (though not often).

 

BUD – big cap-slow-growth-low-beta, this Bud is for you! #confirmed bullish intermediate-term TREND with $106.94 support

Just Charts - This Bud is for You!  - 7

 

DEO - #confirmed bearish to bullish TREND reversal still holding its head above $125.51 TREND support here too

Just Charts - This Bud is for You!  - 8

 

KO – bullish intermediate-term TREND intact with TREND support of $39.97

Just Charts - This Bud is for You!  - 9

 

PEP – breakout to higher-highs is always a thing of beauty – if only there was some volume behind this move; TREND support = $84.17

Just Charts - This Bud is for You!  - 10

 

GIS – since February 2014 this name has looked as good as any on this list; TREND support = $52.91

Just Charts - This Bud is for You!  - 11

 

MDLZ – signaling some exhaustion (overbought) to the upside, bullish TREND with $35.88 support, this remains

Just Charts - This Bud is for You!  - 12

 

KMB – one of the top names on this list for the last 6 months – no change on that front; TREND support = $108.16

Just Charts - This Bud is for You!  - 13

 

PG – worst looking name on the list; bearish TREND breakdown on an absolute basis ($80.73 TREND resistance)

Just Charts - This Bud is for You!  - 14

 

MO – big-cap-slow-growth-low-beta, yep. Bullish intermediate-term TREND support of $38.94 intact

Just Charts - This Bud is for You!  - 15

 

PM – same as the MO mo in all the aforementioned slow-growth #YieldChasing Style Factors; bullish TREND support = $84.71

Just Charts - This Bud is for You!  - 16

 

 

Howard Penney

Managing Director

 

Matt Hedrick

Associate

 

Fred Masotta

Analyst

 


Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more