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Replay: Position Monitor | MD Top Long | GH and NVTA Claims Index Updates | ILMN Benefits From NIH Health Care Public: CLICK HERE for event details (includes video link and materials link). Contact Sales@Hedgeye.com for more information. |
OVERVIEW
Trends within the US Medical Economy have been positive for over a year and many of our longs have performed extremely well through 3Q19 and into 4Q19. As we head into 2020 we expect to see the HC Macro support the sector and our longs through earnings season. As we get further into 1Q20 we expect to see some deceleration begin to creep into estimate trends, guidance, and stock prices. Depending on how quickly the data trends develop, we will fill out our list of active shorts over the coming weeks and months to take advantage of this trend.
CALL OUTS
MD | New Best Idea Long | When we adjust same unit volume growth for changes in same unit physician headcount, MD's reported volume was way worse than it looked. However, as management focuses on their attention on the turnaround, 3Q19 by comparison is better than it seems. We will be hosting a call to review the thesis and our outlook Monday December 30. LINK TO INVITE
GH | Patient Volume and Claims Index trending positive for 4Q19. We'll be watching to see if the Medicare final Local Coverage Decision has an impact on volumes by diagnosis code, and a move away from lung cancer patients. LINK TO NOTE
NVTA | Patient Volume and Claims Index are trending below guidance for 4Q19. Congress's decision to delay implementation of PAMA until 2022 is not a game changer but still nice to have. LINK TO NOTE
ILMN | NIH funding is off to a good start in 2020 and the approval of the FY2020 budget secures a 7% increase in appropriations across all Centers and Institutes. NIH, capital raising for genetic testing related companies, and testing volume across a sample of important labs point to a re-acceleration in revenue growth.. LINK TO NOTE
Thomas Tobin
Managing Director
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Emily Evans
Managing Director – Health Policy
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