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McCullough: Get. Out. Of. The. Way.

 

In this brief excerpt from today’s edition of RTA Live, Hedgeye CEO Keith McCullough tells subscribers that he’s raising cash and reducing U.S. and international equity exposure.

 

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Cartoon of the Day: Sheepish

Cartoon of the Day: Sheepish - Sheepish bull cartoon 05.05.2015

"So, that’s what I think you should be doing again – taking down some of your gross exposure to the long side of US Equities." -Hedgeye CEO Keith McCullough to subscribers in this past weekend's Investing Ideas.


Replay: Thought Leader Roundtable - A Detailed Look at the Cereal Category

Takeaway: Below please find a replay of our discussion with David Sprinkle on the cereal category.

Thank you for those you were able to make the call today.  We wanted to provide those who did not have a chance to tune in, to listen to what we learned about the cereal category today. Please click on links at the bottom of the page to listen or view the presentation.

 

Key Takeaways:

  • The cereal category is not in decline, it is merely at a point of maturity
  • Manufacturers have to lead in innovation to lead in the category
  • Cold breakfast cereal has the second highest household usage rate for breakfast, eggs are #1
  • Opportunities for additional growth are in niche markets, such as ancient grains and muesli
  • Breakfast is the most important meal in the eyes of the consumer

 

Audio Replay: Click Here

 

Presentation: Click Here

 


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Macro Minute: What's The Next Stop For Oil?

Hedgeye Director of Research Daryl Jones recaps the results of today's Poll of the Day and outlines some of the key bullish and bearish elements in this “battleground commodity.”

 

 


Under Armour Strikes Gold With These Three Epic Athletes | $UA

Editor's Note: This is an edited excerpt from a research note sent out earlier this morning by our Retail team. Click here for more information on how you can subscribe to Hedgeye research.

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Under Armour has struck gold in the first 4+ months of 2015.

 

Stephen Curry? Nails all year long. That ultimately culminated in his MVP award announced yesterday. From overlooked college recruit to NBA's Most Valuable Player.

Under Armour Strikes Gold With These Three Epic Athletes | $UA - z curry

 

Add to that 21-year-old Jordan Spieth's record-breaking first major victory at Augusta last month...

Under Armour Strikes Gold With These Three Epic Athletes | $UA - z spieth

 

And don't forget Tom Brady's win at the Super Bowl in February...

Under Armour Strikes Gold With These Three Epic Athletes | $UA - z tom brady

 

It makes sense why Under Armour Founder/CEO Kevin Plank dedicated a significant amount of real estate to the company's athletes roster during the last conference call.

 

But, that's been expensive for UA as endorsements as a percentage of sales climbed around 400 basis points over the past two years with the top line growing at an average of 30%.

 

If there’s any real takeaway here it’s that as UA grows and succeeds in its own right, it is competing increasingly against the big boys (NKE, Adidas, Reebok, Puma) for marketable talent. It has a great advantage in that the brand is so hot, authentic and relevant. But those factors do not trump the economics associated with a higher ante-chip for sponsorship deals.

 

We can see what’s coming on the cost side, now we just need the revenue to follow. It’ll probably come. But anyone looking for margins to go up might be in for a surprise.


ZOES: Removing Zoe's Kitchen from Investing Ideas

Takeaway: We are removing ZOES from Investing Ideas today.

Please be advised that we are removing ZOES from Investing Ideas today. Below is a brief note explaining why from Hedgeye CEO Keith McCullough.

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This is a not a fundamental research call from Hedgeye Restaurants Sector Head Howard Penney – if your investment horizon is 1-3 years, this note may not matter to you.

 

From an intermediate-term risk management perspective (in line with my note from this weekend) this is a “grossing” down call of most things equities ahead of what may very well be a real US equity market correction.

 

ZOES: Removing Zoe's Kitchen from Investing Ideas - z yell

 

Other things to consider with a move like this (we call these Style Factors):

  1. Liquidity – total US equity market volume continues to decelerate on the up moves
  2. Size (meaning market cap) – Russell 2000 is signaling a potential phase transition from bullish to bearish
  3. Sector – with the company “news” out of the way, sector pressure associate with higher gas prices matters

KM

 


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.

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