Hedgeye CEO Keith McCullough is adding Guardant Health (GH) to the long side of Investing Ideas. Below is a brief note.
On down days (yes the US stock market still has those from the trumped up highs), we'll do what our risk management #process always has us doing, buying/covering on red.
Today we're registering a buy signal on a name Healthcare Analyst Tom Tobin's team likes on the long side. Remember, both Organic Growth #Accelerating (in a top-down GDP #slowing quad) and Healthcare (as a Sector Style) are longs in #Quad3.
Here's Tom's latest Institutional Research summary on Guardant Health (GH):
|
Our claims data pointed to revenue upside heading into 3Q19. Guardant stock had fallen from a peak of $110 to a low of $60 alongside the collapse in other Softbank names such as UBER. From our perspective, the key driver for GH shares was slowing revenue. Our analysis shows that the correlation between revenue and enterprise value, and more specifically the expected change between these metrics, is the key fundamental driver of the GH share price. For a TAM story, a tight correlation to revenue should not be surprising. If consensus isn't wrong, forward estimate trends will resume an upward expansion, taking the shares with it. |
Buy on red,
KM