ZOES + FNGN: Removing Zoe's Kitchen and Financial Engines from Investing Ideas

Takeaway: We are removing Zoe's Kitchen and Financial Engines from Investing Ideas today.

According to Hedgeye CEO Keith McCullough: 

 

This is not a research call (our all-star Restaurant Analyst, Howard Penney, remains long-term bullish on the ZOES business model). This is another opportunity to give you a Portfolio Manager’s Risk Management call.

 

I’ve only reduced the number of long positions in Investing Ideas for risk management reasons once before, and the feedback I received from many of you was that you appreciated both the #timing and perspective.

 

Despite the Global Macro market’s most recent bounce to lower-highs on Greece saving itself from itself (allegedly) again, the liquidity risk in the equity market (especially small caps like ZOES and FNGN) remains.

 

So I wanted to amplify my concern about this risk with an action, taking something  off the list that I actually like. This may sound counterintuitive, but that is precisely the point. By the time the crowd has to sell what they “like”, it will be probably be too late.

 

Happy Canada Day from the homeland,

Keith 

 


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