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Optimism In Estimates At Odds With Economic Pessimism

As we look forward to 2013 we see the usual early optimism in company earnings estimates, which to us appear to be at odds with the economic reality.  In the Industrials and Basic Materials Sectors, the lowest growth estimate is

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The Fickle Face of Fuel and Feedstocks

Never put your trust in an energy commodity and certainly never let it hold on to your money while you go away for a few days. One thing that we have learned over the last 40 years is that energy

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An Index of the Value in Large Cap PharmaCos’ Mid- to Early-Stage Pipelines

Pre-phase III pipelines in some cases represent more than a quarter of a company’s enterprise value (EV). Companies’ disclosures of pre-phase III details are extremely limited, thus the market cannot reliably value a substantial percentage of EV using traditional information

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Slower Growth – Companies talking the talk; will they walk the walk?

Today we have published our regular monthly Industrials round-up.  In that piece we referenced briefly the earnings season so far and one particular point of interest. The tone of the guidance and the discussion around the third quarter point to

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Storage: All Roads Lead to the Cloud

The massive paradigm shift in the TMT landscape has profound implications for data storage and the companies involved in storage technologies.  Web-based applications for both consumers and enterprises are driving a rapid expansion in data.  At the same time, the

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Why Premiums Should Grow Faster than Health Costs under ACA; and, Why a Staged Rollout of Health Insurance Exchanges is a Feasible Budget Compromise

The Affordable Care Act (ACA) subsidizes eligible households’ purchase of health insurance; in the first year of operation subsidies are geared to keep households’ premium costs below certain percentages of income Subsidies are subject to two layers of indexing: ‘regular’

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Slowdowns Breed Commoditization

It was interesting today to watch the two sides of the CAT story emerge; the “it’s a cyclical low” versus “there is something more sinister here on pricing” stories.   While we are not in a recession, we are in a

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SSR Index of Current-Quarter Healthcare Demand Growth, Final 3Q12 Estimate

We expect 3.8% y/y health services demand growth during 3Q12, the product of 1.8% growth in unit demand and 2.0% growth in pricing. Total demand growth is 20 bps lower than our previous 3Q12 estimate – both the unit demand

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US Healthcare Demand Part 4: Cyclical Effects

Per-capita intensity (unit demand) rises and falls with the employment cycle; on an age- and health status-matched basis, privately insured households consume 2.7x the care of uninsured households. As a rough benchmark, a 1 percent change in adjusted (for labor

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Coatings Expensive? The Sellers Seem to Think So!

For some time we have been talking about how expensive the coatings space is in the US.  The stocks have done very well and the multiples are very high – too high in our opinion as they discount earnings growth

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