Archive for May, 2012

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The Apparent Link Between Employment and Healthcare Demand

Privately insured US persons (and presumably households) consume 2.7x the healthcare of age- and health-status adjusted persons (and households) who are uninsured As employment rises and falls, households shift from one category (un-/under-employed, un-/under-insured) to another (employed / insured), and

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We Should Be Deal Shy

Eaton Corp’s plan to buy Cooper Industries (announced this month), reminds us that the Industrials and Basics group has flexible balance sheets and is generating plenty of free cash.  Outside Metals and Mining, companies in these sectors rarely generate shareholder

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Video Advertising: The Incredible Disappearing Audience

  Advertisers turn to broadcast TV to get to a big audience fast, but this selling point is quickly deteriorating.  Top programs are drawing fewer viewers every year as the audience is spread over a wider range of choices, and

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Quick Thoughts: Resisting Facebook

  –       The Facebook IPO has priced at $38, at the high end of its revised range, representing a market cap of $108.6B, assuming exercise of vested options. –       The price is about 26 times trailing revenues and 104 times

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Why HMOs are Cheap, Despite Rising Utilization

Utilization rises as the economy strengthens; with economic strength comes rising employment. For commercial HMOs, the question is whether the benefits of employment growth (which brings enrollment growth, sales growth, operating leverage, and improving underwriting risks at the margin) can

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SSR Index of Current-Quarter Healthcare Services Demand Estimates Growth within 50bps, Before Earnings are Reported

‘Unit demand’ for US healthcare ties closely to underlying economic measures, including but not limited to rates of employment. A critical mass of these measures is available during or immediately after a given quarter; using these we model current-quarter unit

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The Internet Revolution: It’s Not Social OR Mobile, It’s Apps

We believe that the Internet economy is in the midst of a revolutionary paradigm shift from the neutral browser of the PC era to the tightly managed App model.  While the growth of social and mobile applications have spawned significant

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Chemicals Skepticism – A Wide Divergence – Commodities vs Coatings

Extending our Skepticism Analysis (SSR Skepticism Index – SSRI) to look at the sub-industries within Chemicals we confirm lack of investor conviction in commodity chemicals – valuations underestimate current and expected returns.  History shows that this corrects through relative outperformance

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April “Employment Situation” Report Mixed on Healthcare Hours. A Flu Effect?

The Bureau of Labor Statistics on Friday published the April 2012 Employment Situation report, which includes payrolls and hours worked at the industry level through March 2012. While aggregate healthcare hours, and medical / surgical hospital hours were slightly up

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Introducing: The SSR Industrials and Basic Materials Skepticism Index

We have extended our “normal valuation” analysis to look at skepticism/optimism, defined as whether the valuation of a sector adequately reflects the underlying current profitability or expected profitability of the sector.  Because I have been covering basic industries for so

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