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July 28, 2015

July 28, 2015 - Slide1

 

BULLISH TRENDS

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BEARISH TRENDS

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AHS | ADDING TO SHORT BENCH (UPDATED POSITION MONITOR)

Takeaway: We're adding AHS to our short bench as a way to play the ACA Tailwind/ACA Headwind Theme. Dropping DGX to Long Bench.

  • AHS SHORT BENCH (NEW)
  • DGX CLOSING LONG, MOVING TO LONG BENCH (Link to Note)

ADDING AHS TO SHORT BENCH | ACA HEADWIND THEME

AHS is a nurse staffing company who's current sentiment rank is among the highest across our universe of companies (short signal) and may be a good candidate for our ACA Tailwind/ACA Headwind Theme.   The theme assumes that the ACA Tailwind, which brought with it a massive one-time expansion of insured medical consumers, will mean revert in terms of enrollment growth and per member spending.  Our ACA Tracker looks at monthly data which currently shows slowing enrollment and flattening per enrollee spending which is significantly elevated compared to pre-ACA levels.  AHS has done well as the marginal supplier of nurse staffing while the ACA drove demand across the Healthcare landscape, including HCA and other hospitals where volume growth is at multi-year highs.  We expect the ACA Headwind will emerge as early as 2H15 and carry into 2016 as new enrollment and pent-up demand work through the medical delivery system.  Below are specific monthly time series which we'll use to track AHS business trends as we build out the work on AHS and while monitoring our ACA Tracker for deceleration.

 

AHS | ADDING TO SHORT BENCH (UPDATED POSITION MONITOR) - 2015 07 27 Position Monitor

AHS | ADDING TO SHORT BENCH (UPDATED POSITION MONITOR) - 2015 07 27 AHS Health Care Employment

AHS | ADDING TO SHORT BENCH (UPDATED POSITION MONITOR) - 2015 07 27 AHS Jolts

 


The Macro Show Replay | July 28, 2015

 


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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... 


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


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 80.28%
  • SHORT SIGNALS 78.51%
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