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.
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.