Invite | Avian Flu ― Thought Leader Call with Dr. Thomas Elam

Takeaway: In this call we will discuss what losing 25% of your breaking eggs supply will do to food and restaurant industry supply chains.

Please join us on June 3, 2015 at 11:00am EST for a thought leader call on the Avian Flu (AI) and the effect it is having on the food and restaurant industries with Dr. Thomas Elam.


AI has reached epidemic levels and as we have been keeping you updated, we are bringing in an thought leader to speak to the affects AI is having on the food and restaurant industry. 


Dr. Thomas Elam, President of FarmEcon LLC will be meeting with us to discuss the topic and provide his insights that have been built up over his 40 year career. Dr. Elam has been recognized for his knowledge on the industry in numerous publications and written in-depth research on the topic. Dr. Elam brings a real business mind to the conversation, having been a professor of both economics and statistics. His education includes a BS degree in Economics with a minor in mathematics from Union University, Jackson, TN (1969), he also earned MS (1971) and PhD (1973) degrees in Agricultural Economics from the University of Tennessee, Knoxville.


Eggs are an important input for many products besides just table eggs, such as, baked goods, pasta, chocolate, ice cream, cosmetics, etc. The amount of companies that are currently being affected is large. The following is a selected list of affected publicly traded companies: MCD, PNRA, POST, CALM, HRL, TSN, DIN, ADM, GIS, K, DNKN, NESN, BDBD.


In this call we will discuss what losing 25% of your breaking eggs supply will do to food and restaurant industry supply chains and when it will make an impact on the bottom line.


Call details and materials to be provided on the morning of the call.


If you have any questions heading into the call please let us know.


Howard Penney




Speaker Series Call - The Impact of Currency Wars on S&P500 Earnings

Takeaway: We are hosting a call with Jack Ciesielski, the CEO of the Accounting Observer on the ongoing financial impact of global currency wars.

The Financials team at Hedgeye is hosting the call with Jack Ciesielski as part of their Guest Speaker Series. If you'd like to request a trial of the team's work please email 




We will be hosting a Speaker Series call with Jack Ciesielski, the CEO of the Accounting Observer (AO) next Tuesday, June 9th at 11 a.m. EST. Our topic will be the ongoing impact of overly volatile foreign currencies on the financial statements of some of America's most important companies. While most analysts and portfolio managers are up-to-speed on the earnings impact of FX translation, there are less obvious consequences including: 

  • Devaluation of foreign cash reserves which impacts cash flow
  • Common equity degradation which increases financial leverage
  • ROE implications depending on the direction of financial leverage


The AO will outline which sectors in the S&P 500 have the most sensitivity to various FX implications and also distill impact to the company specific level for the largest constituents of the index.


Speaker Series Call - The Impact of Currency Wars on S&P500 Earnings - chart1


Speaker Series Call - The Impact of Currency Wars on S&P500 Earnings - chart2


Speaker Series Call - The Impact of Currency Wars on S&P500 Earnings - chart3


CLICK HERE to add this call to your Outlook Calendar for Tuesday, June 9th at 11 a.m. EST or simply dial:


Toll Free Number:

Direct Dial Number:

Conference Code: 39894189# 

Call Materials HERE


About Jack Ciesielski and the Accounting Observer:


Jack Ciesielski is the owner of R.G. Associates, Inc., an investment research and portfolio management firm located in Baltimore, MD. Mr. Ciesielski is the publisher of The Analyst's Accounting Observer, which is an accounting advisory service for security analysts. Before founding R.G. Associates in 1992, Jack spent seven years as a security analyst with the Legg Mason Value Trust. Prior to that, he worked in the accounting profession as an auditor with Coopers & Lybrand, as an internal auditor with Black & Decker, and as an educator at the University of Maryland. The AO focuses on deep dive issues to assist analysts and portfolio managers to completely understand a financial problem set.  



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McCullough: Front-Run the Sell-Side Herd and Get Paid


In this brief excerpt from today's edition of The Macro Show, Hedgeye CEO Keith McCullough answers a subscriber’s question on how much merit to give sell-side consensus estimates. Keith explains that our job as risk managers is to front run the consensus circus act and move ahead of the herd to get paid.


Subscribe to The Macro Show today for access to this and all other episodes. 


RTA Live: June 1, 2015


Retail Callouts (6/1): RL- New Idea Vetting Book, RH

Takeaway: RL - New Vetting Book. Call to be held Monday June 8th, 1:00 pm. RH - Management Incentivized to Deliver


Retail Callouts (6/1): RL- New Idea Vetting Book, RH - 6 1 chart1





Why We’re Doing This Now

Our next Idea Vetting Book will be on Monday, June 8th, and the topic will be Ralph Lauren. This is hardly a new name for us -- having covered it for the better part of two decades.  But we can't remember a time when there was more opacity in the model, less investor confidence in the Brand, or in management’s ability to execute on this story.   Ultimately we think there are critical questions to answer over both short-term and long-term durations, and we think we have the tools, insight, and historical perspective to more fully flesh out the debate.


Remember that Mr. Lauren in 75 years old, and is the sixth oldest CEO in the S&P. But his next layer of executives have only been at the company for an average of 3-5 years, which is very young for a company like this. It's no surprise then that the company just finished 'an investing year' and then promptly started another one.


Importantly, Mr. Lauren has 81.5% of the voting power at RL. He owns the Board outright, and details around its long-term strategic plan (presuming there is one) are extremely scant.  In addition to reviewing some of the near-term puts and takes for Ralph, we're also going to review some of the bigger strategic options facing the company (whether RL knows it or not).


More details to come.



RH - Management Incentivized to Deliver


We received some questions about RH's proxy statement (filed last Thurs) -- which is no surprise as people seem to be obsessed with everything and anything related to Gary Friedman, and his compensation is no exception.  According to this years proxy statement the RH CEO didn't take a pay bump for the 2nd straight year, but the top end of his achievable bonus scale climbed by 25%.


The way his bonus payout is structured, Freidman would take home a fixed percentage of his base pay dependent on the RH's performance. 'On plan' equates to a bonus equal to 100% of his annual salary. At 2x the current internal plan the payout climbs to 250% of the annual salary. Meaning if the company beats its internal pre-tax EBIT plans (around $200mm) by a factor of 2, Friedman could take home a total of $4.375mm this year ($1.25mm base + $3.125mm in incentives). At face value, that seems like a pretty cheap deal for shareholders, and it is. 


But it also outlines what happens when a CEO is compensated in stock in the early years. Freidman owns a 6% stake in RH, currently worth $212mm. At 2x the top of end of RH's current guidance, that would equate to $6.00 in earnings power. Apply a 30x multiple and we are talking an additional $200mm added to Friedman's net worth in 2015. $6.00 is more than a little bit ambitious for this year, but we like that the incentive is there.


If RH wins, then Friedman wins, and shareholders win.


Still our top name in all of Retail.



Retail Callouts (6/1): RL- New Idea Vetting Book, RH - 6 1 chart2





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