Featured Research

Consumer

RV Having Fun Yet? Initiating Coverage of the Recreational Vehicle Industry
Demand has been particularly strong over the past 10-plus years since the Great Recession. The key driver here appears to be a more diverse demographic and an influx of first-time buyers seeking safe, socially distanced and family-oriented activities, with the RV lifestyle checking all the boxes.

Financial Services

Rating Agencies 101
The major credit rating agencies – S&P Global Ratings, Moody’s, and Fitch Ratings – came into being during the early 1900s and since then the services they provide have been quietly woven into the fabric of the global financial system. We believe the credit rating industry’s strong growth track record and oligopoly economics make for interesting investment opportunities, and we intend for this report to serve as a thorough review of the industry.

Healthcare

Screening Passes Our Screens: Initiating on Genomic Diagnostics
We are expanding our coverage in diagnostics with a key focus on genetics and oncology, particularly on players entering the large and exciting minimal residual disease (MRD) and early detection/screening markets. These markets, while still relatively nascent, are some of the largest opportunities in all of healthcare and rightfully have garnered significant investor attention.

Key Trends to Watch as We Start Saying Goodbye to COVID-19
More than 14 months after our country's "two weeks to stop the spread," the U.S. is finally seeing activities, schools, and businesses reopen – and some semblance of "normal." As vaccines and sustained improvement provides light at the end of the tunnel, we are watching to see what life looks like when we emerge. In this report, we take an in-depth approach to analyzing three pandemic-caused trends that we believe will impact healthcare policy for the long haul – a heightened emphasis on mental health, a widespread resolve to improve health equity, and a pedal-to-the-metal approach to expanding health technology.

Industrial

Forest Products: US Commerce Department Bombshell and Futures Head Fake Provides Investors with Alpha Opportunity
Building materials stocks have exhibited increased volatility during 2021 as commodities have soared to previously uncontemplated levels, offset by negative fund flows as investors have taken profits. While we expect continued volatility, our positive outlook for U.S. housing, improving Asian and European markets, and an inability for a material near-term supply response greatly reduces the probability of a commodity price crash. We also highlight the growing investor realization of the strong FCF and favorable ESG merits of the forest stocks as further material positives.

Agtech Rising: The Accelerating Collision of Technology, Digitization and Consumer-Driven Change
Technology, digitization, and rapidly shifting consumer preferences are poised to effect sweeping change across the world’s traditional agriculture and food industries, in our view. On the farm, these secular forces are expected to usher in a fourth major productivity revolution, affecting not only how we grow and where we grow, but also how we quantify agriculture's environmental footprint—predominantly for the better, in our view.

Institutional Equity Strategy

This is Now the Most Significant Forward Year Positive Earnings Revision in at Least 20 Years
We normally see forward earnings revisions positive in the first one to two years of an economic recovery, but consensus earnings estimates have now moved higher in the most severe fashion in at least 20 years, as analysts/management teams/this strategist continue to underestimate the positive impact fiscal support is having on corporate earnings.

Impact of Russell Reconstitution on Sector Level Fundamentals and Valuations
Our report highlights likely upcoming changes to the Russell 2000 index and analyzes expected changes in industry weightings, sales growth, EV/EBITDA, EV/sales, and P/E resulting from the reconstitution. With about $1.52 trillion benchmarked to the Russell 1000 and Russell 2000 alone, this event triggers some of the largest passive flows in the U.S. equity market.

Real Estate

Canadian Self-Storage Association Highlights Robust Demand, Rising Construction Costs and Falling Cap Rates
Throughout the pandemic in 2020, the Canadian self-storage industry remained resilient as operators quickly moved many functions online, while physical stores remained open with added safety measures. In 2021 YTD, storage facilities have experienced greater move-in activity and lower move-outs, which has increased occupancy levels and improved storage pricing power.

Resuming Coverage of Shopping Center REITs
The shopping center REITs continue to trade on the expected recovery in earnings over the next several years, and we expect the combination of positive macro data points, the re-opening of some of the more restrictive markets/states, and healthy leasing volumes will offset a weak 1Q, declining occupancies in 1H21, and elevated capex spend.

Initiating Coverage of Industrial REITs
The Industrial REIT sector remains ideally positioned to deliver strong results, impressive growth rates, as well as growing dividend and net asset value, driven by the seemingly unquenchable demand for distribution space.

Technology and Communications

Hybrid is the End Game
Enterprise storage suppliers have embraced the concept of “If you can't beat them, join them” when it comes to the adoption of public cloud support and capabilities. We assert that the real endgame is a hybrid or multi-cloud environment that will include on-premises private clouds and public clouds. Enterprise buyers have come to recognize the high expense of the public cloud rental economy, while appreciating the value of flexibility.

Initiating Coverage of Digital Auto
The Digital Auto sector is a highly dynamic space that is disrupting one of the largest consumer categories, both in the U.S. and globally. We believe that the used auto dealership industry has been slow to move online and to digitize relative to other verticals, which presents a large opportunity for innovative and disruptive operators to gain meaningful share over the next decade.

Transportation

Sustainable Aviation Fuel 101: What It Is, Who Is Making It and Why This Matters for ESG
Within the transport sector, aviation presents the toughest challenge for decarbonization. Broadly speaking, four options are available to airlines: two that are already in common use (fuel efficiency and carbon offsetting) and two that are still in the early stages of scaling (renewable jet fuel and electric aircraft).

Washington Policy

Cannabis Reform: Slow Burn on Legislative Process Amid Shifting Politics
As we await a comprehensive cannabis reform bill in the Senate, the political landscape in D.C. continues to shift in favor of some sort of action to liberalize federal cannabis regulations. However, the lack of a concrete catalyst and an immediate focus on other urgent policy priorities leaves the overall timing of any action uncertain.