In this clip from THE PITCH, we give you an inside look at how a research analyst's high-conviction stock idea becomes a manager's winning position.
Watch below as Industrials analyst Jay Van Sciver pitches Hedgeye CEO Keith McCullough on Spirit Airlines (SAVE), Van Sciver's new 'Best Idea' Long position.
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Van Sciver: We’re going to talk about Spirit Airlines (SAVE), because it brings so many of the themes we’ve been talking about into one stock. I’m usually an airline-bear, but airlines are one of the best places to be coming out of a recession (based on most prior recessions). It’s very hard to get more leverage than in a post-recession airline. It’s a smaller-cap name; it does have a 14% short-interest as airlines generally do, so there’s potential for a lot of covering. It’s exposed to a lot of the leisure travel recovery, and it’s going to have the COVID comp. The compares for airline traffic that will be coming out in April and May will be up hundreds of percent. It’s an ESG winner. The flows into the stock market are into ESG, and the compares will be very favorable to $SAVE. We model that out to a very reasonable $8 in earnings in 2022; the Street is at about $1.70. The potential upside is substantial. |
