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The Macro Show Replay | June 17, 2015

 


Call Invite | Long WhiteWave Foods

Please join us live for our Black Book presentation on The WhiteWave Foods Company (WWAV) on Thursday, June 18th at 1:00 pm ET. We have had WWAV on our Best Idea List since 4/11/14, and will provide a detailed 90+ page updated presentation. 

 

Call Invite | Long WhiteWave Foods  - WWAV Invite Chart 1

 

Yes valuation is rich, but rightfully so, WWAV has been lapping its competitors in the marketplace. We strongly believe that this name still has more room to run. WWAV operates in many segments that are nowhere near their full potential, and are still gaining popularity among mainstream consumers.

 

Their brands are all number one or two in their respective categories, with the ability to transcend across categories. We have seen it with Horizon, entering the center-of-store with Mac & Cheese and other snacks and Earthbound into frozen, So Delicious into creamers, the list goes on and will continue to get longer.

 

Bottom line this growth story is not over, and we are very excited to tell you more about our thought process during our live presentation.

 

Longer term there are many way you can win with WWAV:

  1. Growth of the base business ― distribution growth & category expansions
  2. Growth through acquisitions ― string of pearls approach
  3. Sell the company ― many large CPG companies are looking for growth

 

CALL DETAILS

US Toll Free:

US Toll:

Confirmation Number: 39984323

Materials: CLICK HERE

 

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

 

Howard Penney

(O)

(E)

 


FNGN: Adding Financial Engines to Investing Ideas

Takeaway: We're adding Financial Engines (FNGN) to Investing Ideas today.

Please note that we are adding Financial Engines (FNGN) to Investing Ideas today. Below is a note from Hedgeye CEO Keith McCullough explaining why. We will include additional, in-depth research color from Financials analyst Jonathan Casteleyn in this weekend's edition of Investing Ideas.

 

FNGN: Adding Financial Engines to Investing Ideas - z fin9

 

According to McCullough:

 

I've been trying to get longer (net) in signal/idea terms (on red, patiently) ahead of this Fed decision tomorrow. If the Fed does nothing but reiterate what it has been saying all year long ("data dependence") I go with the "buy everything" call on that (just like I did at the March 18th Fed decision). 

 

"Buy everything" is more of a generalization obviously - what I mean by that is a dovish Fed means A) Rates Down (bonds up) B) Dollar Down (stocks and commodities up). With Financial Engines specifically, we have a very much hated high short interest stock whose fundamentals have recently shifted from slowing to #accelerating.

 

Here's Jonathan Casteleyn's latest take on that front:

  • Financial Engines (FNGN) reported an in line quarter on both top and bottom line last night but boosted its full year 2015 guidance for revenue and EBITDA. The newest outline for revenues is now $315-$321 million, an increase of $2 million from the prior midpoint with the firm’s annual EBITDA marker now $97-$101 million, a $1 million increase from the midpoint in the last communication in 4Q14. With the firm’s revenue result of $75 million in the period, this creates a consistent ramp up in top line for the rest of the year with guidance outlining a $79 million result on average per quarter.
  • The firm’s seasoning rates while flat were guided to higher levels as well. The crux of this story will be the firm’s ability to turn its $1.0 trillion in assets-under-contract (AUC) into assets-under-management (AUM). While FNGN’s 26 month seasoning rate was flat year-over-year at 13.0%, the firm’s mark-to-market at quarter end hit a 13.1% penetration rate. In addition, the firm outlined that several large plans with lower penetration levels entered the 26 month cohort, which is blending overall penetration lower (but masking higher penetration outside of these plans).
  • With the increase in guidance and a generally favorable outline for the firm to improve its penetration rate, the setup is still too bearish in our view. With new highs in short interest and still marginally positive progress in core financials we maintain our positive disposition. We estimate fair value is $55 per share based on a $1.3 trillion AUC opportunity for the firm. We should know in the next several quarters if the firm’s penetration level can really improve which will drive the stock in the mean time.  

Buy signal here at the low-end of the FNGN risk range (power users of the #Process note that this recent correction in the stock came on decelerating volume, whereas the recent highs came on accelerating volume.

 

Cheers from London where its Pub time,

KM



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Is Chesapeake a Takeout Target? Kaiser Weighs in on The Macro Show | $CHK

 

In this one-minute excerpt from today's edition of The Macro Show, Hedgeye Energy sector head Kevin Kaiser is asked if his short thesis on Chesapeake Energy could be upended by an acquisition.

 

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

 

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INSTANT INSIGHT: If the Fed Opts for One Rate Hike…

Good morning from London.

 

So, we got another nice pullback for bond yields off of last week’s panic highs. The US 10-year yield down -22 basis points in less than a week after the US Dollar failed to reclaim TREND support.

 

I’ve been looking for a dovish Fed since the March 18th meeting, so I’ll reiterate what they should do (see 3 Charts - Don't Hike) given the slowing data – USD agrees.

 

So, if the Fed opts for one rate hike “just because it’s time” … then I think stock, bond, and commodity market risks ramp.

 

INSTANT INSIGHT: If the Fed Opts for One Rate Hike… - z ben ryan

 

Editor's Note: This comes from research written by Hedgeye CEO Keith McCullough earlier this morning. If you're serious about stepping up your market game we encourage you to take a look at our offerings.


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