LEGAL DISCLAIMER TERMS OF USE

Transcription

1 HEDGEYE 1

2 LEGAL DISCLAIMER Hedgeye Risk Management is a registered investment advisor, registered with the State of Connecticut. Hedgeye Risk Management is not a broker dealer and does not provide investment advice to individuals. This research does not constitute an offer to sell, or a solicitation of an offer to buy any security. This research is presented without regard to individual investment preferences or risk parameters; it is general information and does not constitute specific investment advice. This presentation is based on information from sources believed to be reliable. Hedgeye Risk Management is not responsible for errors, inaccuracies or omissions of information. The opinions and conclusions contained in this report are those of Hedgeye Risk Management, and are intended solely for the use of Hedgeye Risk Management s clients and subscribers. In reaching these opinions and conclusions, Hedgeye Risk Management and its employees have relied upon research conducted by Hedgeye Risk Management s employees, which is based upon sources considered credible and reliable within the industry. Hedgeye Risk Management is not responsible for the validity or authenticity of the information upon which it has relied. TERMS OF USE This report is intended solely for the use of its recipient. Re-distribution or republication of this report and its contents are prohibited. For more detail please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at HEDGEYE 2

3 HEALTHCARE POSITION MONITOR Sentiment Investment Ideas - Longs Trade Trend Tail Sentiment Investment Ideas - Shorts Trade Trend Tail Score 1 LONG Score 1 SHORT 6 ATHN athenahealth, Inc ZBH Zimmer Biomet Holdings, Inc AHS AMN Healthcare Services, Inc MD MEDNAX, Inc. 45 HOLX Hologic, Inc. 24 MDRX Allscripts Healthcare Solutions, Inc. --- Sentiment Long Bench Sentiment Short Bench Score 1 LONG Score 1 SHORT 35 CSLT Castlight Health, Inc. Class B n/a CPHD Cepheid EVH Evolent Health Inc Class A MDSO Medidata Solutions, Inc CERN Cerner Corporation ILMN Illumina, Inc WOOF VCA Inc ICLR ICON Plc CYH Community Health Systems, Inc Q Quintiles Transnational Holdings, Inc CRL Charles River Laboratories International, Inc DVA DaVita HealthCare Partners Inc LPNT LifePoint Health, Inc QSII Quality Systems, Inc LH Laboratory Corporation of America Holdings HCA HCA Holdings, Inc PRXL PAREXEL International Corporation DGX Quest Diagnostics Incorporated CPSI Computer Programs and Systems, Inc DATA SOURCE: FACTSET HEDGEYE 3

4 HEALTHCARE JOLTS SLOWING 50.0% JOLTS: HC Job Openings Rolling 3-Mo YoY % 2-Yr Average 40.0% December % 30.0% 20.0% 10.0% 0.0% April % -10.0% -20.0% -30.0% -40.0% DATA SOURCE: BLS HEDGEYE 4

5 HEALTHCARE JOLTS SLOWING 60.0% JOLTS: HC Job Openings Rolling 3-Mo YoY % ROC 50.0% 40.0% 30.0% April % 20.0% 10.0% 0.0% -10.0% April % -20.0% -30.0% April % -40.0% -50.0% DATA SOURCE: BLS HEDGEYE 5

6 HEALTHCARE JOB OPENINGS (JOLTS) 1,150.0 JOLTS - HC Job Openings Average +1 Std Dev -1 Std Dev 1, DATA SOURCE: BLS HEDGEYE 6

7 HEALTHCARE JOLTS % EMPLOYMENT 3.0x 2.5x HC JOLTS % of HC Employment 2.0x 1.5x 1.0x Z-Score 0.5x 0.0x -0.5x -1.0x -1.5x -2.0x -2.5x DATA SOURCE: BLS HEDGEYE 7

8 HEALTHCARE EMPLOYMENT GAINS Rolling 12-month Healthcare Employment Gains April December Months April March Months DATA SOURCE: BLS HEDGEYE 8

9 HEALTHCARE EMPLOYMENT 4.0% Employment - Health care y/y growth % 3.5% 3.0% May +3.2% 2.5% 2.0% 1.5% 1.0% 0.5% - DATA SOURCE: BLS HEDGEYE 9

10 HEALTHCARE EMPLOYMENT SLOWING 2.0% Rate of Change YoY % Employment Health Care 1.5% 1.0% 0.5% - (0.5%) (1.0%) (1.5%) DATA SOURCE: BLS HEDGEYE 10

11 HOSPITAL EMPLOYMENT 4.5% Employment - Hospitals y/y growth % 4.0% May +3.9% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% - (0.5%) (1.0%) DATA SOURCE: BLS HEDGEYE 11

12 AHS ORGANIC GROWTH FORECAST 35.0% AHS: Total Organic Growth YoY % AHS Organic Growth Forecast - HC Employment Model 30.0% 25.0% Correlation = 0.94 Organic Growth YoY % 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% DATA SOURCE: COMPANY FILINGS AND BLS HEDGEYE 12

13 HCA ADMISSIONS VS JOLTS 45.0% 35.0% JOLTS: Health Care and Social Assistance - Job Openings y/y growth % HCA SS Equivalent Admissions (y/y growth %) Correlation = % 7.0% 6.0% JOLTS YoY % 25.0% 15.0% 5.0% 5.0% 4.0% 3.0% 2.0% 1.0% HCA SS AdmissionsYoY% -5.0% 0.0% -1.0% -15.0% -2.0% DATA SOURCE: COMPANY FILINGS AND BLS HEDGEYE 13

14 ATHN LATEST THOUGHTS POSITIVE Winning Hospitals and FQHCs Large Population Health Deals Strong Enterprise Backlog Former AMZN CFO Joins Board Q2/Q4 Active Quarter for Enterprise Deals Valuation Near All Time Low NEGATIVE athena-tracker Slowing Weak Small-Group Bookings / Light Leads Disruption from Streamlined Rollout CFO Departure Other High Level Employee Departures Deteriorating Culture Short Interest Down HEDGEYE 14

15 ATHENA-TRACKER YOY GROWTH 35.0% 30.0% # of medical practices on athenanet 12/4/ % 5/22/ % YoY % Medical Practices on athenanet 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Note: 8/2014 7/2015 CAGR; 8/2015 Present YoY % DATA SOURCE: HEDGEYE TRACKER HEDGEYE 15

16 ATHN WEEKLY NET NEW ADDITIONS 70 Net New # Net New Medical Practices Q16 Avg Q16 Avg DATA SOURCE: HEDGEYE TRACKER HEDGEYE 16

17 ATHN GLASSDOOR.COM REVIEW DATA SOURCE: GLASSDOOR.COM HEDGEYE 17

18 ATHN STREAMLINED REVIEWS DATA SOURCE: SOFTWAREADVICE.COM AND FACEBOOK HEDGEYE 18

19 ATHN HISTORICAL SHORT INTEREST 40% SI % Float Average +1 Std Dev -1 Std Dev 35% 30% 25% 20% 15% 10% DATA SOURCE: FACTSET HEDGEYE 19

20 ATHN RELATIVE EV/EBITDA S&P x Relative EV/EBITDA SPX Average -1 Std Dev +1 Std Dev 6.0x ATHN NTM EV/EBITDA Relative to SPX 5.0x 4.0x 3.0x 2.0x 1.0x 0.0x DATA SOURCE: HEDGEYE TRACKER HEDGEYE 20

21 ATHN HISTORICAL EV/SALES NTM 10.0x EV/Sales NTM Average +1 Std Dev -1 Std Dev 9.0x 8.0x NTM EV/Sales 7.0x 6.0x 5.0x 4.0x 3.0x 2.0x HEDGEYE 21

22 APPENDIX

23 BIOTECH EMPLOYMENT 8.0% Employment - Biotechnology research y/y growth % 6.0% April +4.9% 4.0% 2.0% - (2.0%) (4.0%) (6.0%) DATA SOURCE: BLS HEDGEYE 23

24 OFFICE OF PHYSICIANS EMPLOYMENT 4.0% Employment - Offices of physicians y/y growth % 3.5% 3.0% 2.5% May +3.0% 2.0% 1.5% 1.0% 0.5% - DATA SOURCE: BLS HEDGEYE 24

25 HEALTHCARE JOB OPENINGS (JOLTS) 70.0% 60.0% 50.0% JOLTS: Health Care and Social Assistance - Job Openings y/y growth % 2-Yr Average Rolling 12-mo Average 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% DATA SOURCE: BLS HEDGEYE 25