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SSR LLC

is a differentiated investment research boutique built to provide an essential, yet missing, element of research: the weighting of sub-sectors within broad industrial categories.  By simultaneously maintaining both a broad view of our industries, a fundamentally detailed view of the sub-sectors that make up these industries, and the most interesting stocks that make up those industries, we offer guidance on portfolio composition that we believe is both highly impactful, and otherwise unavailable. Learn More…

Healthcare

Hospitals are a full 1 s.d. below their usual relationship to the broader SP500 on price to FY+2 EPS. And, such low relative multiples have historically signaled subsequent outperformance. Fundamentally however, Hospitals’ relative performance tracks the rate of acceleration or deceleration in revenues – so we view low multiples as a secondary consideration, and the question of whether revenues are accelerating or decelerating as the primary question…Read more

Tech / Media / Telecom

The TMT sector is in the midst of a comprehensive once-in-a-generation paradigm shift driven by the contemporaneous maturation of several key innovations that offer consumers and businesses new and significantly better ways to use information.  In this, we expect the few platforms that control user experiences (AAPL, GOOG, MSFT, maybe AMZN) will capture a disproportionate share of value… Read more

Industrials / Materials

While we think we have a willing buyer and seller on this deal, clearly negotiations have hit a stumbling block, with MON making it very clear that it is looking for other possible partners and BASF mentioned again in the recent press. Bayer’s response today with only a slightly higher bid as well as some payment guarantee if the deal does pass regulatory scrutiny may be explained by the perception of higher risk, on both sides….Read more

Financials

Financials Picture Web SizeThe large-cap US banks are emerging from the shadow of regulatory capital constraints and legal expenses with simplified organizations and more focused businesses. They are highly capital generative boosted, in the case of C and BAC, by the run-off of legacy portfolios and tax-effects; the resulting buyback of stock at or about tangible book value is accretive and will drive valuations higher with or without an improved rate environment. When rates do begin to normalize, the combination of widening net interest margins and lower costs-to-serve as customers shift to digital channels opens the jaws of operating leverage and will lift returns-on-equity and valuation. More broadly, the digitization of banking favors scale-players by shifting cost from variable (e.g. teller compensation) to fixed (e.g. platform investment) and by breaching the competitive moat created by the local network effects of branch distribution… Read more