Below is a note written by CEO Keith McCullough on why we're adding Davita (DVA) to the short side of Investing Ideas today:
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Looking for some of my research team's Best SELL Ideas on this market bounce to lower-highs? You should be. Inasmuch as consensus wasn't looking for longs in late December, they're not looking for shorts in mid-February. DaVita (DVA) remains one of Tom Tobin's SELL ideas (Institutional Research product). Here's an excerpt from one of his recent notes on the name: "The company suggested a number of headwinds other than the demographic headwinds we discussed in our Black Book presentation. Management cited rising opioid deaths as a driver of available organ donors and subsequently a reduction in commercially insured patients who disproportionately receive available kidneys. This may be true, but we have not heard any anecdotes suggesting an uptick in transplants. Second was a reduction in out of network and subsequently high reimbursement patients, something we have heard from facility operators, but assumed DVA was bringing more patients in network at lower rates." Sell the bounce, KM |