Last night WDAY offered guidance during their analyst day and people fucking hated it. The subsequent result has been bloodshed this morning, as people shimmy the fuck out of high valuation software name and into retail shit-houses like PIR and BBBY.
BMO came away from WDAY Rising with neutral incremental views. They remain positive on WDAY opportunities in financial solutions, though they believe that a gradual slowdown in HCM could limit consolidated growth, particularly given the relative size differential, with HCM being about 81% of subscription revenues. They believe that management signaled that M&A could play a meaningful role to generate new revenue/market opportunities. They think valuation is reasonable though not inexpensive given growth metrics; Market Perform, $225 tgt.
Without question, high valuation names have been adversely affected by the We Work IPO debacle. There is now a disconnect between private valuations and public. As such, the sectors with the highest valuations, namely SAAS, have been sold. This of course is also the case due to a slowing economy. But I am not sold on this idea entirely, since software creates high productivity and also opportunities for cost savings. Nevertheless, this is where we are now. As such, I sold out of my SAAS names today.
The sector is off sharply, nearly 3% for the session.
The best sector in the market continues to be residential construction, an obvious winner with rates sinking and the price of real estate near record highs.
Here are the top industries ranked by Sharpe ratios now.
Tough tape for tech and healthcare. If you’re managing accounts now and don’t know where to go, go to cash. If you must be invested, try diversifying you fucking brainlet. We’re in a rate sensitive environ, so gain exposure to industries that offer yield, such as the one’s on the list above.If you enjoy the content at iBankCoin, please follow us on Twitter