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Takeaway: We are adding SABR to the short side today.

Editor's Note: Our Technology analyst Ami Joseph will send subscribers a full report outlining our high-conviction thesis. In the meantime, below is a brief summary written by Hedgeye CEO Keith McCullough earlier today.

SABR: Adding Sabre Corp to Investing Ideas (SHORT SIDE) - sabre

The beauty of covering shorts on down days is that you can come right back and re-short some of your favorite ideas on up days. 

Buy/Cover on red; Sell/Short on green. Rinse & Repeat.

As a reminder on the Sabre Corp (SABR) SELL idea from our new Tech Sector Head, Ami Joseph, here are some key points:

  • Not enough FCF to justify the current price
  • Not enough organic revenue growth to justify the current price
  • As we face 2H16 and into 2017, the bulk of inorganic revenue benefit in comparisons is behind us (other than Trust Group at $10-11m per Q, or 1% per Q), leaving estimates subject to downward estimate revisions.

KM