Don't Call It Bad!

“Don’t call it a beachhead…”

-Adolf Hitler


That’s what Hitler told his field marshals after the Allies took the beaches of Normandy in 1944. He called it the “last French soil held by the enemy… and that Cherbourg was to be held at all costs.” (The Guns At Last Light, pg 105)


Evidently, it was a beachhead.


Don't Call It Bad! - EL chart 2


Back to the Global Macro Grind


A reporter from Marketwatch pinged me this morning asking what I thought the “biggest lie is that investors are telling themselves?” After reading a few consensus Bloomberg headlines that “deflation is good” my answer was simple:


The biggest lie US stock market centric investors are telling themselves right now is that the bond market has it wrong, and US growth isn’t half of what they thought it would be 10 months ago.


But , whatever you do, don’t call it bad. The same consensus that said the upside surprise in #InflationAccelerating from JAN-JUN was “good for stocks” are now saying that the #Quad4 deflation of that inflation is “good” too.


Like two bad golfers who are staring down breaking bogey puts from 9 feet in the rain and wind, it’s all “good, good.”


Back to reality…


Is 1 up week in the last 5 for the SP500 good? How about 2 in the last 8 weeks for the Russell 2000? What about both bond yields (10yr -25% YTD) and Oil prices crashing -25% since June? Oh, and 3 of the 4 BRICs falling like the real ones (Brazil,  Russia, China) - all good?


You show me one of the many consensus economists, strategists, etc. whose 2014 call for - 3.25% on the 10yr; +10-15% on the Dow, SP500,  Russell; and +3-4% GDP growth – was based on worldwide #deflation, and I’ll send them a Hedgeye hat.


Confirmation bias in being bullish on growth all of the time is what it is, but it’s not getting people paid this year. Looking at last week’s #Quad4 deflations (that continued, despite the Russell 2000 bouncing +3.4% to down -3.9% YTD):


  1. WTI crude Oil -1.3% to -12.6% YTD
  2. Russian Stocks -3.4% to -28.1% YTD
  3. Brazilian Stocks -6.8% to +0.8% YTD


And with Dilma Rousseff winning Brazil’s presidency this weekend (stock market indicated down another -5-6% pre-open), it appears that the anti-dog-eat-dog-socialist contract #deflation in that part of the global demand construct isn’t good either. It’s bad.


In Hedgeye #process speak:


  1. Quad 1 (inflation slowing and growth accelerating) is good
  2. Quad 4 (both inflation and growth slowing, at the same time) is bad


That’s it. We’ve already constructed a framework to talk about these trivial matters so that the people I used to pay on the sell-side can be held to account. If both growth equity bulls and bears agree that inflation is deflating, the only debate left is on growth.


If you’re in the #Quad4 camp (and you have to buy stocks) there are only 3 S&P Sector allocations you’d be net long of right now:


  1. Healthcare (XLV)
  2. Consumer Staples (XLP)
  3. Utilities (XLU)


And I’d weight them in that order. Since Healthcare stocks (XLV) led last week’s rally (+6.6% on the week to +17.6% YTD vs. something like the Dow which was only +2.6% on the week to +1.4% YTD), that was only confirmation that we are in #Quad4.


If we were in Quad 1 (and growth was accelerating again), early cycle stocks like housing and consumer discretionary would be leading to the upside (and big things like Retail Sales and New Homes wouldn’t be missing). Consumer Discretionary (XLY) lagged last week and is still down -0.7% YTD.


I’m not saying we’ll never be in Quad 1. That’s where markets went in the 1st half of 2009 and there were very few macro strategists who shifted from bearish on #deflation to bullish on consumption back then. Most were forced to call #Quad4 bad, after missing it the whole way down. Timing matters.


Our immediate-term Global Macro Risk Ranges are now:


UST 10yr Yield 2.12-2.31%


RUT 1055-1127


VIX 14.34-27.86

WTI Oil 80.05-83.78


Best of luck out there this week,



Keith R. McCullough
Chief Executive Officer



Don't Call It Bad! - Chart of the Day

Pardon The Bear

This note was originally published at 8am on October 13, 2014 for Hedgeye subscribers.

“But pardon, gentles all…”



That’s from William Shakespeare’s Prologue to Henry V. It’s also the opening volley from a #history brick my wife gave me for Father’s Day (sorry, just digging into it now!) called The Guns At Last LightThe War in Western Europe 1944-1945.


While I think she sometimes thinks I’m at war with my keyboard in the early mornings, she puts up with my market life – and for that I am forever grateful. From my family to my friends at the firm, getting it done is an all-out team effort.


But whose team is The Bear on? While I received some kind emails while in London last week, I’m not sure that being right this time is a good thing. The #Quad4 Deflation is nastier than a gnarling grizzly. And I fear the war between inflated asset #Bubbles and gravity has just begun.

Pardon The Bear - Bubble bear cartoon 09.26.2014


Back to the Global Macro Grind


The thing about fear is that you need to accept it before you conquer it. Last week’s +46% move in the front-month fear (VIX) index to +54.8% YTD should help pave part of that path towards acceptance. But don’t forget that there’s a long way between denial (1st stage of grief), anger, bargaining, depression, and acceptance.


Maybe using the Five Stages of Grief is a little over the top for a Monday morning. Maybe not (especially if you are a NY Jets fan). Being bearish at 1208 on the Russell (all-time #Bubble high = July 7th) or during the Ali-Bubble (BABA) IPO day (September 19th) at SPX > 2011 wasn’t easy for me. The denial stage for the bulls was equally isolating for our bearish macro view.


So pardon, gentles all – isolation is often where the alpha lives. And we certainly hope you had the Long Bond (TLT) on versus the Russell 2000 (short side) as the performance divergence in being long #GrowthSlowing hit its widest for 2014 YTD (ex-reinvesting interest, TLT = +18.3% YTD vs Russell 2000 -9.5%).


In US Equity terms, here’s how the Def-#Quad4 Deflation looked last week:


  1. SP500 down -3.1% (down for the 3rd straight week) to +3.1% YTD
  2. Russell 2000 down -4.7% (down for the 6th straight week) to -9.5% YTD
  3. US Energy Stocks (XLE) down -5.2% to -5.6% YTD
  4. US Industrial Stocks (XLI) down -4.7% to -3.7% YTD
  5. US Consumer Staples (XLP) up +0.4% to +6.1% YTD


That’s right. In addition to the Long Bond (Treasuries), Munis, and Cash, we’ve noted in our most recent Macro Themes slide deck that Consumer Staples (XLP) is as good as any place to hide as the world clamors for low-beta-big-cap-liquidity.


Typically, when Correlation Risk (commodities trading inversely to USD) is this high, Down Dollar pays the commodity bulls. But last week, that was only true for pockets of the commodity complex (Oil was -4.4%). In addition to Gold +2.4% last week:


  1. Coffee was up another +6.7% to +83.5 % YTD
  2. Palladium was +4.0% to +8.7% YTD
  3. Cocoa was +3.3% to +16.4% YTD


But I am thinking there are more hedge funds who are still carry trading oil futures with a levered long bias than there are 2 and 20 alpha dogs who are long Cocoa on the #Ebola trade.


In fact, if you look at how hedge funds are positioned from a speculative net futures and options perspective:


  1. Crude Oil still has a net LONG position of +299,755 futures and options contracts (vs. 6 month avg of +385,000)
  2. US 10yr Treasury still has a net SHORT position of -51,954 contracts (vs. 6 month avg of -15,000)
  3. SP500 (Index +E-mini) has a net LONG position of +48,616 contracts (vs. 6 month avg of -41,000)


We’re obviously on the other side of every one of these Consensus Macro positions (bearish on Oil, bullish on Treasuries, bearish on SPX), so it was a good week. But the bigger question is where do the US equity bulls (and Treasury bears) go from here?


Within the small cap US equity #Bubble, there are a whole bunch of #bubbles we highlighted on our Q4 Macro Themes call (ping if you want the replay). And some of them play right into hedge fund consensus:


  1. Complacency #Bubble (slide 44)
  2. Levered Beta Chasing #Bubble (slide 45)
  3. Leveraged Speculation #Bubble (slide 46)


We can do a conference call with you to review all of these #bubbles, but the #Complacency one is really easy to show in terms of the number of days where the SP500 has had a > 1% move. After hitting an all-time YTD low, we just had 4 of those days, in a row!


Sure, markets scare people when they do that. I think I scared the hell out of some Institutional Investors in London with some of these slides too. Coming off the all-time lows in complacency, there’s never been this level of #VolatilityAsymmetry, ever.


While never-ever is a very long time – and I certainly don’t mean to be mean (or scare people) - I’d appreciate it if you took it easy on my inbox. My wife thinks of me as a cuddly Thunder Bay Bear, so be gentle with me.


Our immediate-term Global Macro Risk Ranges are now:


SPX 1884-1948

RUT 1037-1086

VIX 16.85-21.67

USD 85.07-86.67

WTI Oil 83.99-88.64

Gold 1210-1234


Best of luck out there this week,



Keith R. McCullough
Chief Executive Officer


Pardon The Bear - Chart of the Day


TODAY’S S&P 500 SET-UP – October 24, 2014

As we look at today's setup for the S&P 500, the range is 132 points or 6.60% downside to 1835 and 0.12% upside to 1967.                                                      













  • YIELD CURVE: 1.88 from 1.88
  • VIX closed at 16.11 1 day percent change of -2.54%


MACRO DATA POINTS (Bloomberg Estimates):

  • 9:45am: Markit US Services PMI, Oct. prelim, 57.8 (prior 58.9)
  • 10am: Pending Home Sales m/m, Sept., est. 1% (prior -1%)
  • 10:30am: Dallas Fed Mfg Activity, Oct., est. 11 (prior 10.8)
  • 11am: U.S. to announce plans for auction of 4W bills
  • 11:30am: U.S. to sell $24b 3M bills, $30b 6M bills



    • U.S. authorities at airports in 6 states begin monitoring people coming from Liberia, Sierra Leone and Guinea for Ebola
    • President Obama hosts Advanced Manufacturing Partnership steering cmte meeting at White House



  • Williams Partners, Access Midstream Agree to Improved Terms
  • ECB Fails 25 Banks in Test as Capital Hole Lurks in Italy
  • Vodafone Starts Audit Into Possible Fraud at Ono Before Buy
  • Venezuela Scraps Plans to Sell Citgo Petroleum, Universal Says
  • Apple Pay Faces Challenge as CVS, Rite Aid Disable Payments
  • U.S. Gasoline Declines to Lowest Since 2010, Lundberg Says
  • Hedge Funds Pare Bullish Coffee Bets as Brazil Drought Eases
  • Keystone Foes Energized as Tumbling Crude Pinches Oil Sands
  • Horror Flick ‘Ouija’ Outdraws Assassin Movie Starring Reeves
  • Rousseff Ready for Great Changes After Tight Brazil Victory
  • CDC Moves Fast on NY Ebola as Soul-Searching Brings Changes
  • BARRON’S ROUNDUP: Charles Schwab, Amazon, Coca-Cola, Aflac



    • Allergan (AGN) 8am, $1.77 - Preview
    • Armstrong World (AWI) 7am, $0.77
    • Franklin Resources (BEN) 8:30am, $0.93
    • Huntsman (HUN) 6am, $0.53
    • Merck & Co (MRK) 7am, $0.88 - Preview
    • Old National Bancorp (ONB) 9am, $0.25
    • Precision Drilling (PD CN) 6am, C$0.17
    • Roper Industries (ROP) 7am, $1.53
    • Seagate Technology PLC (STX) 8am, $1.25 - Preview
    • Tenneco (TEN) 8am, $1.08



    • Allison Transmission (ALSN) 4:05pm, $0.30
    • American Capital Agency (AGNC) 4:01pm, $0.73
    • Amgen (AMGN) 4:02pm, $2.11 - Preview
    • Amkor Technology (AMKR) 4:08pm, $0.24
    • AvalonBay Communities (AVB) 4:05pm, $1.19
    • Cliffs Natural (CLF) 4:30pm, $0.01
    • Cognex (CGNX) 4:06pm, $0.56
    • Compass Minerals Intl (CMP) 4:15pm, $0.81
    • Crane (CR) 6:15pm, $1.17
    • General Growth Properties (GGP) 4:01pm, $0.09
    • Hartford Financial (HIG) 4:15pm, $0.83
    • HealthSouth (HLS) 4:30pm, $0.49
    • Integrated Device (IDTI) 4:05pm, $0.18
    • Manitowoc (MTW) 4:25pm, $0.41
    • Masco (MAS) 5pm, $0.32
    • Owens & Minor (OMI) 5:08pm, $0.47
    • PartnerRe (PRE) 4:15pm, $3.60
    • Plum Creek Timber (PCL) 4:04pm, $0.30
    • PMC-Sierra (PMCS) 4:05pm, $0.10
    • Regal Entertainment (RGC) 4:01pm, $0.15
    • T-Mobile (TMUS) 9pm, $0.05
    • Twitter (TWTR) 4:08pm, $0.01
    • Universal Health (UHS) 5:01pm, $1.34
    • XL Plc (XL) 4:05pm, $0.62



  • Nickel Falls to Lowest Since March as Demand Concern Persists
  • Commodities Drop to Five-Year Low Led by Sugar, Coffee on Brazil
  • Hedge Funds Cut Coffee Bets as Brazil Drought Eases: Commodities
  • Brent Oil Falls Second Day as Goldman Cuts Forecasts; WTI Slips
  • Gold Trades Near 1-Week Low as Investors Weigh Stocks to Buying
  • Sugar Falls on Speculation of Weaker Brazil Real; Coffee Drops
  • Oil Speculators Bet Wrong as WTI Rebound Proves Fleeting: Energy
  • Corn Falls With Soybeans as Drier Weather Seen Aiding U.S. Crop
  • Rebar Extends Weekly Loss on Speculation of Slowing China Demand
  • Goldman Cuts Oil Forecasts as OPEC Loses Influence to U.S.
  • Trade Negotiators Say Balanced TPP Deal Is ‘Crystallizing’
  • BlueScope Sees China Steel Demand Growth in Decline, AFR Says
  • Thai Farmers Fret Over Survival as Sluices Shut: Southeast Asia
  • China Gold Imports Rise to Five-Month High Before Holiday Sales


























The Hedgeye Macro Team


















investing ideas

Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.

October 27, 2014

October 27, 2014 - Slide1



October 27, 2014 - Slide2

October 27, 2014 - Slide3

October 27, 2014 - Slide4




October 27, 2014 - Slide5

October 27, 2014 - Slide6

October 27, 2014 - Slide7

October 27, 2014 - Slide8

October 27, 2014 - Slide9

October 27, 2014 - Slide10

October 27, 2014 - Slide11
October 27, 2014 - Slide12


Takeaway: Our Macro Playbook is a daily 1-page summary of our core ETF recommendations, investment themes and proprietary quantitative market context.

CLICK HERE to view the document. In today’s edition, we highlight:


  1. The rotation out of international Fixed Income and Yield Chasing exposures and into their domestic counterparts
  2. How divergences in momentum between pockets of domestic Fixed Income & Yield Chasing exposures continue to suggest #Quad4 is a highly probable event
  3. The shortable head-fake in homebuilder stocks


Best of luck out there,


Darius Dale

Associate: Macro Team

KSS – Key Questions for Kevin and Wes

Takeaway: Don’t waste time on the CMO or 4Q comp. We’d dig into levers behind whether KSS will ever earn $4.00+ again after ’14

Here are some questions we’d ask at Kohl’s Investor Day on Wednesday. We’re giving these questions to you, because we won’t have the chance to ask them directly. In the spirit of full disclosure we sent management our 61-page slide deck outlining why we think the stock is a short. They didn’t like it very much, apparently. We're fine with that.


We’ll just sit back, listen to the webcast and see how the company’s disclosure about its business challenges or supports our thesis, and will act accordingly. But shy of some massive strategic or financial engineering announcement, we don’t see how the financial community walks away with a whole lot of ammo to think that this company can grow again after 2014 – ever. Our thesis is outlined in the comments below. Also see the link to the replay of our conference call, and the full 60-page slide deck detailing our view.


Here Are A Few Key Questions We’d Have For KSS Management


1. Q: What percent of Kohl’s brands/content do you think the Consumer would be genuinely upset to see go away forever?


Context: No, this question is not a joke. We always ask this of companies that don’t own their own content. Macy’s would probably have a very good answer for this – probably between 80-90%. But its merchants are good enough to fill that void with other content that the consumer wants. For Kohl’s, we have no idea what management would say, but we think it’s as low as 20-30%. That means that 70-80% of its sales could go away forever, and the Consumer would not miss a beat. The irony is that the brands the consumer wants – Nike, Levis, Columbia, Carter’s, Vans – could all be bought at other retailers. Or better yet, online from the brands themselves.


2. Q: Why should the current Kohl’s business model exit?


Context: Maybe you could think of a more articulate way to ask this one, but think about the history here. In the mid-1990s when KSS first roared onto the scene (as THE growth name in Retail), the bankers and analysts all pitched it as ‘an alternative to the mall’. That’s when the concept of mall traffic being in a secular decline found its way into Wall Street Retail lore, and KSS was viewed as the offset. Lower-rent off-mall property that’s much closer to home, providing an extremely attractive alternative to someone that did not want to battle the crowds in overcrowded malls. Back then, even sophisticated consumers did not know about this thing called on-line shopping (KSS IPO was three years before Netscape). Now, the alternative to the mall is something called ‘your living room’ where you shop on your laptop while binge-watching Sons of Anarchy on Netflix.


3. Q: Your e-commerce margins are about 1,200bp below company average. That’s not because you are inefficient, or the model needs to be ‘fixed’, but simply that KSS’ average basket size is too small to accommodate shipping and merchandise handling costs. The real question here is “What happens if your competition moves to free shipping and free returns? If you match that, won’t it crush your margins? If you don’t, won’t it hurt traffic/volume? How is this not lose/lose?”


Context: The evolution toward free shipping is not a function of “If” but “When”. Target is offering free shipping on even the tiniest of basket sizes over the holidays – literally, you can buy a pencil online and TGT ships it for free. AMZN will have to ultimately respond. JWN already offers free shipping both ways. Retailers won’t match each other all at once, but the trend is headed there. In that context – particularly with a weak brand portfolio – how can KSS compete at an acceptable margin?


4. Q: How many square feet of department store square footage exists today? How many should there be?


Context: A seemingly stupid question to ask a CEO. But we’re not so sure that KSS management knows the answer (or many other department store CEOs for that matter). But when 169mm square feet exists today in the department store space – down from 772mm 15 years ago – it’s a perfectly fair question to ask how many the company thinks will exist in another five years. We think we’ll see another 93mm square feet exit the industry. That’s almost as big as KSS is today. We don’t think KSS will be the casualty this time around. But it will hurt – a lot – while it happens.


Q: We’re at the back end of the current industry margin expansion cycle (we’re in year 6). As we transition into the next cycle, whenever that may be, what is the mid-cycle earnings power for this company?


Context: After 2014 passes, we don’t think KSS will ever see $4 in earnings power again. Traffic = down. Basket = deflationary. E-commerce = Up, but at a dilutive margin. No meaningful store closure or cost cutting opportunity. The only growth we see is from stock buyback – at least while the cash flow supports it. We think that KSS EPS eases into an annuity of $3.50 per share over the next five years.  



September 29, 2014



Takeaway: Here are some of the more controversial slides from our 60-slide deck from last week on why we think KSS is a structural short. 

Last week we hosted a conference call to review our 60-page slide deck as to why we think KSS is a short. If you’d like to listen to a replay of the call and download the full materials, please click the link below. We picked out eight slides below that are among the more controversial.


Replay Link: CLICK HERE

Materials: CLICK HERE


Point #1: Expectations Too High

Yes, near-term numbers look doable given several tailwinds facing all retailers. But one we get past this year (only four months away) we think KSS numbers will start to come down materially. The consensus has earnings growing 10% next year, while we think they will be down nearly 10%. Then they’ll be down again, and again, and again. Ultimately, once we’re past 2014, we don’t think that KSS will earn $4 again until the tail end of the next economic cycle.

KSS – Key Questions for Kevin and Wes - kss1


Point 2: Losing Share At A Faster Rate

It’s no secret that department stores are losing share of wallet (3.5% of Retail Sales vs 10% a decade ago), but KSS is losing share within that context. The blue line in the chart below shows KSS’ share gain of the department store space. The first big bubble – from 1Q09 to 4Q10 – came about 3-years after a meaningful square footage growth spurt. That’s when the stores began to hit the sweet spot of the maturation curve. Then the next bubble came a little over a year later when KSS gained what we think (based on our surveys) is $1bn in share from JCP. Our latest survey shows that about $150mm has shifted back to JCP – but that still leaves $850mm at risk for KSS. The punchline is that after gaining share of this space every single quarter since its inception, KSS is now a net share loser.

KSS – Key Questions for Kevin and Wes - kss2


Point 3: This Model Is Broken

There’s no square footage growth – at all. Productivity of $210/ft in brick and mortar stores is trending down. E-commerce is the only growth engine, but unfortunately it is the lowest margin business at KSS by a country mile. As such, gross margins are structurally headed lower. SG&A can’t be cut in line with the gross profit erosion. D&A was just lowered from $950mm to $900mm – which is stunning in itself. That’s not likely to go down much further. Cash flow still remains healthy enough to buy back 7% of the stock this year. Buy with lower net income, we think that repo/financial engineering gets cut by better than 50% for the duration of the model. EBIT should be down 5-8% each year, with share count making up about 3% of the gap. Net/net = EPS declining every year.  

KSS – Key Questions for Kevin and Wes - kss3 


Point 4: Store Productivity Bifurcation

Sales per square foot have been flat for the past four years, but that is only if you include e-commerce. Brick & Mortar productivity is $210, and is at the lowest rate we have ever seen it. There is absolutely no valid argument we can find that this turns around – particularly given that JCP is sitting at just $108 in productivity and has KSS right in its sights. We think those two will converge over time.

KSS – Key Questions for Kevin and Wes - kss4


Point 5: New Brands – Juicy and Izod

This topic absolutely dominates the information flow around KSS. We all know that Juicy Couture and Izod are now available at KSS. That said, our consumer survey shows Kohl’s purchase intent is down year/year, while retailers like JC Penney and Macy’s are up meaningfully. So we know about the brands – but consumers might not know, or might not care. Nonetheless, let’s keep in mind that there’s noise around new brands EVERY year at Kohl’s. Take a look at the graphic below.  Could this years’ additions be better than last years? Possibly. But keep in mind that Izod and Juicy are not exclusive. Izod is all over Macy’s and JC Penney’s. Juicy is in the process of growing distribution through new owner Authentic Brands.  To get a good read you need to quantify the impact (see next exhibit).

 KSS – Key Questions for Kevin and Wes - kss5


Point 5b: Quantifying Juicy and Izod

We know that these brands occupy 525 sq ft and 700 sq ft, respectively, inside the average KSS box. That’s 1.42% of KSS’ total square footage. Now…it can’t just create space out of nowhere, which means that it needs to take out product that is underperforming – but is still productive. Assuming that these brands generate $225/ft in productivity, and that it is replacing private label brands that are doing $110 per foot in the same space, we build up to about $250mm in incremental sales in another two years. That’s about 1.3% accretion to sales, but it comes at a lower margin as these national brands carry lower profitability than the portfolio as a whole. The bottom line = it’s going to take a lot more than a couple of mediocre brands to salvage KSS’ top line.

KSS – Key Questions for Kevin and Wes - kss6 


Point 6: Structural Margin Decline

Gross margins on KSS’ e-commerce business run about 1,200bp below the store-level margins. Some people are hoping/banking on a margin rebound as KSS did not seemingly benefit from the same tailwind the rest of the group has over the past five years. The truth is that it has. Without that tailwind we’d be looking at KSS with margins near 5-6% today. The industry tailwind was masked by the massive growth in KSS’ e-commerce business. In fact, from ’05-’13 KSS put up the highest growth rate of any ecommerce business in the US throughout all of retail. But as this business continues to grow 15-20% annually (the only line item to grow aside from SG&A) it naturally depresses aggregate GM% by 30bps per year. Those are margin points that this model can’t afford to lose.

KSS – Key Questions for Kevin and Wes - kss7 


Point 7: Keep An Eye On KSS Credit

Many retailers have, or maintain, credit cards. It’s a solid tool to keep customers and incentivize them to spend more. But our consumer survey suggests that 18% of KSS shoppers have a rewards card. But more importantly, we know that 57% of purchases are made by that card. That is a simply staggering figure from where we sit. Three years ago KSS shifted its partnership from Chase to Capital One. But median credit scores for Chase customers range between 700-750, which are optimal for a mid-tier retailer. But the 700bps in card penetration that KSS saw under Capital One came at a median credit score of 600-650. Basically, this tells us that incremental sales growth is likely coming from more marginal consumers. This is not exactly a smoking gun on the short side, but taken in context with the other pressures we see to the model, it certainly does not bode well.

KSS – Key Questions for Kevin and Wes - kss8

Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.43%
  • SHORT SIGNALS 78.34%