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REPLAY | Healthcare Q&A With Tom Tobin | $HCA $HOLX $ATHN

Hedgeye Healthcare Sector Head Tom Tobin and Analyst Andrew Freedman hosted a Q&A session today in our studio.

 

 

They provided their thoughts on the recent jobs report and how it will influence the healthcare space, discussed updates to their monthly OB/GYN survey, and gave their latest thoughts on HCA Holdgings (HCA), Hologic (HOLX) and athenahealth (ATHN).

 

Tune in next week for another live Q&A from Tom and Andrew.

 

 


VIDEO | Agricultural Equipment: How Long, How Deep? $DE $AGCO $CNHI

Hedgeye's Industrials Sector Head Jay Van Sciver sat down with Director of Research Daryl Jones to discuss his upcoming black book and conference call on Agricultural Equipment being released this Friday.

 

Jay hits on various aspects of the agricultural equipment sector including why he's getting loud on Deere & Company (DE) AGCO Corp (AGCO) and CNH Industrial (CNHI) now and the influence of commodity prices.

Attendance on this call is limited. Please note if you are not a current subscriber to our Industrials research there will be a fee associated with this research call and related material. Ping sales@hedgeye.com for more information.

HIBB: Adding Hibbett Sports to Investing Ideas (BEAR SIDE)

Takeaway: We are adding Hibbett Sports (HIBB) to Investing Ideas as a short..

Editor's Note: We received considerable positive feedback from our subscribers this past weekend after we decided to highlight one of our favorite names on the short side right now ... Royal Caribbean. In light of the fact that we have grown increasingly bearish on U.S. equities, and do not see many attractive long opportunities currently, we give you Hibbett Sports.

 

Below is a brief note from Hedgeye CEO Keith McCullough explaining why we are adding HIBB to Investing Ideas as a short. Retail Sector Head Brian McGough will provide a fuller explanation in this weekend's update.

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HIBB: Adding Hibbett Sports to Investing Ideas (BEAR SIDE) - 36

 

Getting bearish (on US Equities) is a process... and I think we waded into what will now be a net short position (more shorts in US Equities than longs) at a measured pace.

 

We're short a few index/sector exposures (IWM and XLF) and now adding single stocks, as we received overbought signals.

 

The Bear case for Hibbett from Brian McGough has not changed.


Sell/Short Green (from Chicago),

KM


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REMINDER: KSS – New Black Book. Putting Our Credit Thesis To The Test

Takeaway: Our new Black Book/consumer survey will test our thesis that 25% of KSS’ EBIT is at risk of going away – contrary to management’s guidance.

Please join us tomorrow, Tuesday May 12 at 1pm for a call in conjunction with our latest Black Book on Kohl’s, which is a Best Idea Short. Note that the call will be two days before KSS 1Q results. Despite the obvious strength in the stock and the business year to date, we think that earnings growth will decelerate sharply as the year progresses, and that earnings power will prove to have peaked at $4.26 last year. We think consensus estimates are high by 15% this year (after we pass 1Q), and by 30-40% over the following two years. Ultimately we think that KSS will shift from trading at a peak multiple on peak earnings, to more of a mid-cycle multiple on something closer to $3.50. That suggests a stock in the low $40s, or about 45% downside from here.

 

The key issue as we see it links back to the company’s credit card and rewards program. Specifically, we think that the rationale behind the recent change in KSS Rewards is evidence that KSS is in the 10th inning as it relates to finding new customers. About 85% of profits are linked to the credit card, and we think that 25% of EBIT is at risk due to the recent changes implemented by KSS management.

 

In order to put our thesis to the test, we are in the process of completing a very detailed consumer survey of 1,000 KSS shoppers who either hold a Kohl’s credit card or the new Yes2You rewards program. The results should give us an accurate picture as to who is shopping, how much they are spending, and how much of a customer’s incremental purchases are flowing through KSS Card or some other Third Party Card (Visa, MC, etc).

 

Participant Dialing Instructions (We’ll Also Have A Live Streaming Presentation in Conjunction with the Call)

US Toll Free:

US Toll:

Confirmation Number: 39610531

Materials Link: CLICK HERE


Burger Bubble: Shake Shack Is One of the Most Overvalued Stocks Out There | $SHAK

"The Shake Shack (SHAK) charade is over,” outspoken Hedgeye Restaurants Sector Head Howard Penney wrote last week.  “And I mean over and done. It’s just a matter of time.”

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Burger Bubble: Shake Shack Is One of the Most Overvalued Stocks Out There | $SHAK - zen

 

Penney (who has a long and successful track record shorting restaurant stocks and pointing out Market Emperors Wearing No Clothes) took to Twitter recently to reiterate his bear case on SHAK's ballooning stock price.

 

One point in particular that stands out: Trading at $64 million per store Shake Shack is 5.9x time more expensive than Chipotle's (CMG) ever was!

Highlights below.

 

Burger Bubble: Shake Shack Is One of the Most Overvalued Stocks Out There | $SHAK - zen 99

 

Burger Bubble: Shake Shack Is One of the Most Overvalued Stocks Out There | $SHAK - zen 1

 

Burger Bubble: Shake Shack Is One of the Most Overvalued Stocks Out There | $SHAK - zen 2

 

Burger Bubble: Shake Shack Is One of the Most Overvalued Stocks Out There | $SHAK - zen 3

BOTTOM LINE? "It can’t defy gravity for much longer," Penney says.

 

If you're an institutional investor and would like more information on Penney's research ping sales@hedgeye.com.


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