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The Macro Show Replay | July 28, 2015

 


Replay | Q&A with Hedgeye Healthcare Sector Head Tom Tobin

ARE you a healthcare investor? you can't afford to miss this call... 

 

Earlier today Healthcare Sector Head Tom Tobin and Healthcare Analyst Andrew Freedman discussed new developments to their Best Ideas and shared updated analysis.

 

A few of their Best Ideas report this week including CPSI (Best Idea short), HOLX (Best Idea long), and ZBH (Best Idea short). They also touched on ATHN and answered questions from viewers. 

 


Cartoon of the Day: Inflation?

Cartoon of the Day: Inflation? - Inflation cartoon 07.27.2015

 

***Below is a brief excerpt from this morning's Early Look by Hedgeye CEO Keith McCullough.

 

...Uh, maybe we should be long, “decoupling”? Nope. We’ll stick with the #Quad4 asset allocations, which should have you long low-beta and yield chasing sectors (short Commodities). Currently I like Healthcare (XLV), REITS (VNQ), and Utilities (XLU); not the following:

 

  1. Inflation expectations (5yr breakevens) dropped another -13bps = down -28 bps in the last month (1.42%)
  2. Energy (XLE) and Basic Material (XLB) stocks down -4.0% and -5.4% (-9.1-9.3% in the last month) respectively
  3. Industrial stocks (XLI) deflated another -3.7% to -6.5% YTD (down -4.5% month-over-month)

 

If you’re levered long to inflation expectations another way to look at your risk... 


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.64%
  • SHORT SIGNALS 78.61%

UUP: Adding U.S. Dollar to Investing Ideas

Takeaway: We are adding the U.S. Dollar to Investing Ideas on the long side.

Editor's Note: The note below was written by Hedgeye CEO Keith McCullough.

*  *  *  *  *

UUP: Adding U.S. Dollar to Investing Ideas - z doll

With the Euro overbought here, the US Dollar Index is signaling immediate-term TRADE oversold within it's bullish intermediate-term TREND. 

 

Catalyst for the US Dollar this week could be the GDP report (Thursday). It's obviously a lagging report (it's a Q2 report and most of the economic #deflation has been in Q3) but the way Wall St reads it is sequentially vs. the Q1 bomb. That report will be good.

 

It won't be until Q3 GDP is reported that GDP looks as bad as it did in Q1 (to headline chasers). Net net, being bearish on Euros and Yens (and Emerging Market FX) keeps us long-term bullish on USD anyway.

KM


ZOES + FNGN: Adding Zoe's Kitchen and Financial Engines Back to Investing Ideas

Takeaway: We are adding Zoe's Kitchen and Financial Engines back to Investing Ideas.

Editor's Note: The note below was written by Hedgeye CEO Keith McCullough.

*  *  *  *  *

Fundamental research views from our analysts Howard Penney (Restaurants/Consumer Staples) and Jonathan Casteleyn (Financials) didn’t change. I was trying to help risk manage what ended up being a 5% correction in the Russell 2000 (small cap) and High-Beta as a risk management Style Factor.

 

Going forward, we don’t plan on removing names from Investing Ideas unless the fundamental story (from our analysts' perspective) changes.

 

Thanks for bearing with us as we evolve the Investing Ideas product. We’re always trying to learn from our mistakes.

 

KM

ZOES + FNGN: Adding Zoe's Kitchen and Financial Engines Back to Investing Ideas - z1


Monday Mashup

Monday Mashup - CHART 1

 

RECENT NOTES

7/27/15 HAIN | ORGANIC DECEPTION PART TWO

7/24/15 HAIN | COSMETIC DECEPTION

7/23/15 CPB | Analyst Day Notes

7/21/15 GIS | Green Giant Divestiture is the Worst Kept Secret

 

RECENT NEWS FLOW


Friday, July 24

DF | Resumed neutral at JPMorgan, target is $18.

HAIN | Acquires the Mona Group, a European plant-based drink manufacturer (click here for article) or for our take click here


Wednesday, July 22

UNFI | Downgraded to neutral from outperform at Wedbush; removed from Best Ideas list, target cut to $60 from $74

UNFI | Downgraded to equal-weight from overweight at Morgan Stanley, target cut to $63 from $78

 

Tuesday, July 21

KHC | Initiated outperform at RBC with $88 target

GIS | Upgraded to outperform from sector perform at RBC; target increased to $65 from $58

 

Monday, July 20

GIS | Rumor, Bounduelle prepares bid for Green Giant (click here for article) or for our take click here

UNFI | Announces early termination of distribution contract with Albertsons (click here for article)

 

SECTOR PERFORMANCE

Food and organic stocks that we follow, in aggregate, underperformed the XLP last week. The XLP was down -0.8%, the top performer from our list was MJN posting an increase of 3.2%, although MJN is down -14.8% for the year.

Monday Mashup - CHART 2

 

QUANTITATIVE SETUP

From a quantitative perspective, the XLP remains bullish on a TRADE and TREND duration.

Monday Mashup - CHART 3

 

Food and Organic Companies

Monday Mashup - CHART 4

Monday Mashup - CHART 5

 


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