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 Healthcare analyst Tom Tobin pitches Hedgeye CEO Keith McCullough on National Vision Holdings (EYE), his new 'Best Idea' Long position.
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Tom Tobin: "I'm going to cover National Vision (EYE); they basically sell eyewear, and this stock is a Covid-comp positive. One of the reasons we picked this up is because as we were looking at where healthcare had been deferred and delayed. As acuity (your vision) continues to deteriorate over time, people are going to have to come back to dental, vision, colonoscopies, etc.
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The first component of our thesis is the return to turned in in-person care. This has already begun to happen; we've been hearing from providers that they're getting closer to back to trend, or maybe 5%-10% below (which is still a significant gap). However what hasn't happened, or has only just begun to happen, is this element of the backlog from deferrals coming back, basically getting us to "trend-plus" and leading to some outsized returns. There's also an element here of this being a low-cost provider, and as Emily Evans mentioned earlier, there's been a lot of labor issues within the Healthcare sector. That being said, $EYE has been doing a pretty good job of opening up stores and driving volume. |
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The CDC's survey (of over 50,000 people) shows the material drop in delays of in-person care over the past couple months, it's now breaking below that 30% floor. In our own Hedgeye Consumer Survey, we had about 40% of respondents say they were waiting from some type of in-person care until being fully vaccinated. Again, people have been deferring and delaying visits, and there's a lot of evidence of growth ahead of us.
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The Call is our morning research call hosted by Hedgeye CEO Keith McCullough with our 40+ analyst research team. It helps small and large investors alike make better decisions via unique and investable stock/sector updates. Click here to learn more.
