By: Scott Davis
3Q17 has been full of drama, noise, and debate but underlying all the usual non-sense is a clear up-cycle, a full 3 quarters in and gaining momentum. When we launched Melius just a few weeks ago, we noted that we were above consensus on 75% of the names we cover by about 15% on average, 2 years out. We were surprised that after a summer of positive data points that numbers had not budged – not a penny over the summer. Having been gone for 3 months though, we couldn’t figure out exactly where buy-side consensus was. With about 16/28 of our co’s under coverage having reported and 11/16 stocks going up on the prints, it’s clear the consensus was/is still too conservative. Numbers are still too low and we remain above consensus on most names with a clear upward bias.