Surgical Stock Shorts: No Landing + Bullwhip Effect
- Covid resulted in the mother of all bullwhip effects that is still causing distortions today, with an inverted relationship between customer inventories vs manufacturer inventories.
- To find shorts exposed to over-optimism on an imminent inventory re-build, we looked for industrial names where: 1) inventories are rising faster than sales, 2) are in capital-abundant industries, 3) score high on VP's Crowding score
- To find longs to buy on dips we screened for industrial names that are in capital-scarce sectors, which are less crowded.
- Short screen tickers: ATKR, AME, NVT, ROK, NDSN, ERII, HLIO, SNA, CMCO, EPAC
- Long screeen tickers: IMCD NA, CCRO3 BZ, GEBN SW, ASURB MM, FERG US, KRX GR, AHT LN, GAPB MM, ALLE US, BNZL LN
Portfolio WatchIndustrialCyclicalUSInventoryInventories
