For several months we have been monitoring an important dynamic – manufacturing production vs. consumption in various industries. Inventory will be the single most important KPI during Q3 earnings. For large cap stocks, inventory-to-sales is near all-time highs. The industries and stocks that are at particular risk of material downward revisions are… 202209_Inventory_Trivariate-1Download
In most of our client meetings in New York, Boston, and South Florida this week there was substantial focus on what we discussed in last week’s Level Set – corporate earnings. Here is what we know… It is now the consensus view that 2023 earnings expectations are excessively optimistic. As we showed last week, 2022
Is generating alpha harder right now? We looked at several common investment approaches, including price-to-forward earnings, free cash flow yield, stock buybacks, short interest, and others, and found that reversals and volatility in performance are at their highest levels in over 15 years. Using a consistent investment discipline has never been more challenging. Free cash
It is widely known that corporate earnings expectations are too high and are coming down. We and others have been talking about it for months. The question that everyone is trying to answer now is how much are corporate earnings coming down and what does that imply for a trough in the SP500? Several investors we
We have been surprised that during recent meetings the subject of the inverted yield curve rarely surfaces. The market sell-off earlier in the year was at least partially the result of a higher probability being assigned to stagflation. The 2-year, 5-year, and 10-year yields have been fully inverted since July 5th (it was April 1st for the 2-year vs. the 10-year) and the market sold off hard in anticipation. Of the nine inverted-curve cycles in the last half century, SP500 returns this cycle have been the most volatile, indicative of the differing paths that may unfold, and the challenge to forming an “inverted yield curve playbook” for equity investors.
Our latest market overview: a comprehensive document containing the best of our recent work and up-to-date views.
Today’s research focuses on the consumer from three lenses (the Trivariate way): macro, fundamental, and quant. We then assess the available alpha to look for investment opportunities in the consumer sector.
What does a CEO want said about them a decade from now when they step down? We surmise that very high on that “legacy list” is that they were good stewards of capital, and that their decisions about capital use directly benefited shareholders and employees.
Over the past several months we have researched the implications of corporate decision-making, by analyzing various capital uses and their consequences.
Risk management is critical for the success of any investor – especially with regards to their high conviction positions, which often carry disparate and opaque risks. Today’s research shows how to best to hedge / replicate the returns of such positions with the goal of being exposed to only the company’s idiosyncratic risk, thereby avoiding unwanted exposures that are not part of the high conviction thesis.
Our latest market overview: a comprehensive document containing the best of our recent work and up-to-date views.
