Archive for December, 2013

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Quick Thoughts: TWTR – Let the Haters Hate, I’m Still a Buyer … For Now

–        Given the dizzying pace of TWTR’s December run from $39 to more than $74, this pull back is understandable. Still, TWTR is poised to soundly beat consensus for quarters to come. –        4Q consensus expects a 32% seasonal QoQ

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The Great Ethylene Debate

Basic chemical stocks have had a very good 2013; LYB has risen 37%, WLK 45%, and DOW (which is a more diverse portfolio) has managed 36%.  Earnings are very strong in North America for many based on the advantage derived

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SSR Index of Current-Quarter Healthcare Demand Growth: Interim 4Q13 Estimates

We expect 3.5% (nominal) y/y growth in US health services demand during 4Q13, the product of 2.3% growth in unit demand, and 1.2% price growth. The 2.3% unit growth forecast would be a 30bp improvement over actual 3Q13 growth of 

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BAC: Closing the Margin Gap with WFC

Over the last three years, the net interest margin at BAC has risen from 64% to 72% of that reported by WFC (with the corresponding figures being 80% and 90% if we adjust for the adverse impact of BAC’s trading

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Why Adverse Selection is Likely on the HIEs: A Simple Model of Enrollment Behavior

We believe it is more likely than not that premiums paid by (or on behalf of) enrollees on the health insurance exchanges (HIEs) will be insufficient to cover both claims costs, and the operating costs of the health insurers participating

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December 11, 2013 – TMT: The Good, the Bad and the MEH

TMT: The Good, the Bad and the MEH We recently published research (“TMT: How the Mighty Can Fall”) detailing the trajectory of companies and market sectors that have been overtaken by innovation. Threats to incumbents typically take 4-6 years from

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Quick Thoughts – FIS/MCX: Access to ACH

A risk to the thesis in the attached note that FIS will offer lower-cost routing (4 cents/transaction of which 2 cents is to be paid to banks to contribute to the cost of an ACH-enabled debit) for MCX than Visa

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FIS: The MCX Opportunity for PayNet

FIS will allow merchants participating in the MCX payments system (which we expect to pilot in 2014Q1 and roll-out nationally before year-end) to accept card payments for an all-in cost of 4 cents/transaction versus the network fees charged by Visa/MasterCard

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Quick Thoughts: ‘Tis the Season to be Amazon

–          Amidst stories of tepid brick-and-mortar spending, on-line sales were up roughly 19% YoY for Thanksgiving and Black Friday, with mobile nearly 22% of total e-commerce. –          Sales from desktops were up 16% on Black Friday, compared to 43% growth

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Dow – Setting Up For A Spin

Dow Chemical’s announcement today sends a very clear message that the company does not expect to be able to sell the chlorine related assets it has talked about divesting for the last 6 months, and that some sort of spin

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