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Call Invite | Position Monitor | EXAS, XHS, TDOC, GH, HC Labor Demand Please join us on Monday, March 9, 2020 @ 10AM ET - Add to Outlook Calendar Public: CLICK HERE for event details (includes video link and materials link). |
POSITION MONITOR
Join us for our weekly Position Monitor update. Last week we tried to push as much COVID-19 exposure to the bench as we could. We added some shorts (EXAS), and hold on to longs that should weather the storm better than others, such as AMN. We've also prioritized others such as TDOC that should benefit. The challenge is to think through what comes next. The problem of patients avoiding the doctor and hospitals is a big one and the reason we pushed EXAS over the line when we did. We are also pulling together the data and running scenarios on the over-under for hospital admissions. We should have the tool built by Monday that allows us to punch in infection rates, care avoidance, and see the impact on hospital discharges.
Fundamental Equity Quads for the XHS | In conjunction with the Hedgeye Macro Quads that our subscribers, we will further discuss the implementation of Fundamental Quads into our process. Elemental to the process is taking a reading of the Fundamental Equity Quad which measures consensus estimates in terms of slope and acceleration. Unfortunately, estimates have only just begun to accelerate to the downside consensus grapples with Quad4 and COVID-19.
TDOC App Downloads | We have found the analysis of App Download data to be an effective way to follow trends of in- office visits versus telehealth alternatives. Most recent data seems to sign that care is trending favorably toward virtual options. We suspect care that converts under COVID-19 will persist for some time.
Health Care Labor Demand, ADP Employment, and BLS Data | The Health Care Labor picture continues to point to a positive demand environment in the near term, but signs of slowing are steadily creeping in. A key indicator in this signal may be the trend in pricing. Despite the growth in demand, pricing trends have not risen accordingly. The result may already be telling us that demand is softening. This week's health care labor trends remained strong for February, but at this point, that's is clearly beside the point.
Guardant Tracker | Our Proprietary Data Source has given us unique visibility into the claims of many public and private genetic testing labs. We have used this data to create NEW trackers to best mimic their source companies and better forecast for the future. Guardant has been a great example of the potential value in this data and has taken our top spot in the Hedgeye Health Care Best Idea Longs.
COVID-19 Call Announcement | Health Care and Health Care Policy will be co-hosting a call with Dennis Grimaud, the Co-Founder and former CEO of DIATHERIX Laboratories. DIATHERIX, which has been acquired by Eurofins, is a leader in the development of diagnostic tools to aid in the identification and treatment of viral disease including H1N1 and a host of coronavirus. On the call, Dennis, Tom, and Emily will discuss those topics which have been top of mind as investors try and assess the impact of COVID-19 testing, diagnosis and treatment, including:
- What may have gone wrong in China and how that impacted mortality rates
- Missteps by US in containment and the implications for the spread of disease
- At-risk populations and complications that may give rise to hospitalizations or not.
- Rate if Change in Testing v Rate of Change in Disease Spread
- Regional hot-spots or national impact
The call will take place on Tuesday, March 10th, 2020 at 3:15pm ET and will be open to all Hedgeye subscribers.
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Call Invite | SPREAD AND IMPACTS OF COVID-19 IN THE US Dennis Grimaud, CEO of RED Consulting and Former CEO and Co-founder of DIATHERIX Laboratories Tuesday, March 10 at 3:15PM ET Participating Dialing Instructions Toll Free: Toll: UK: 0 Confirmation Number: 13700019 |
EXAS | Best Idea Short | Notwithstanding a -25% decline in the shares since February 20, we think EXAS is a good short here. We've found several problems with the consensus forecast for Exact Sciences and the consensus outlook for Cologuard. As of 4Q19, Cologuard quarterly test volume represents a 5.4% patient share of the colon cancer screening market, and on its surface, appears to be low and offers substantial upside as the company drives toward their goal of 40% patient share. However, our data shows peak patient share is more likely 20%, it will take longer to get there, and blood based testing lurks as an existential long term threat. Weakening economic growth (Hedgeye Quad 4) and COVID-19 are intermediate term headwinds that will make matters worse. We see up to 30% downside from here.
Our EXAS Short presentation will focus on the the economic impact of Quad4 and slowing growth, US Medical Economy data pointing toward a 2H20 deceleration in utilization, the difference between compliance with colon cancer screening guidelines and the annual testing opportunity for Cologuard, our Colon Cancer Screening Tracker that measures the colon cancer screening patient population, our Genomic Health Tracker that details test volume by CPT code and diagnosis code, and the long list of competitors working toward blood- based testing for colon cancer.
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EXAS | Best Idea Short | There Will Be Blood Please join us on Monday, March 9, 2020 @ 2 PM ET - Add to Outlook Calendar Participating Dialing Instructions Toll Free: Toll: UK: 0 Confirmation Number: 13699947 Healthcare & Health Policy Subscribers: CLICK HERE for event details (includes video link, materials link and dial-in). |
All data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
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Emily Evans
Managing Director – Health Policy
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