KORS - Vetting Book. New HedgeyeRetail Product

Takeaway: We're launching our first 'Idea Vetting Book' next week, which will thoroughly vet the bull/bear case (and ultimate EPS power) for KORS.

NEW HEDGEYERETAIL PRODUCT

On Thursday, May 7th at 1:00pm ET we will be releasing a new product for HedgeyeRetail subscribers aimed at Idea generation around battleground stocks in Retail, or those that simply pass through our initial Idea screening process and make it to our Idea Bench. These “Idea Vetting Books” are distinctly different from the Black Books you’ve come to expect from us (and should still expect from us in the same quantity). 

 

While Black Books are focused around our top ideas, the Vetting Books will go through all financial and operational puts and takes across TRADE, TREND, and TAIL durations sourced from a group of roughly 125 stocks. We don’t know where we’ll come out on a given name until the very end of our process – and in some cases, the answer might be that ‘the call’ is to do nothing with the stock. But we’ll explain in detail precisely why that is the case. This is and has been a core part of our internal investment process in sourcing what we consider to be Big Ideas, and with this product, we’re opening it up to our customers.

 

VETTING BOOK #1: MICHAEL KORS (KORS)

Next Thursday’s Vetting Book will be focused around Michael Kors (KORS). The name recently found its way onto our Long bench, after losing $8bn, or 40% of its market value over the past 12-months. How we see it, this name is likely a binary outcome. At $63 it appears to be trading at 14x earnings, but it’s probably not. The ‘e’ part of the equation is wrong. Either the company hits/beats earnings and the stock goes up meaningfully, or numbers come down materially, and the stock looks expensive at a much lower stock price. We’ll focus on vetting the near-term earnings drivers, long-term opportunity for growth as well as the cost of that growth, and ultimately, what the right size and margin structure is for KORS.

 

We’ll be hosting a conference call at 1:00 pm ET on Thursday, May 7th.

 

CALL INFO WILL BE DISTRIBUTED THE WEEK OF MAY 4th.


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more