The Call @ Hedgeye [FREE EDITION] | January 28, 2026

Key Concepts

• Earnings Acceleration is Key: Strong and accelerating earnings growth, particularly within the S&P 500 and Russell indices, is driving market performance.
• Signal-Driven Investing: A proprietary, quantitative signal-based approach is prioritized over consensus opinions and mainstream financial media narratives.
• Contrarian Positioning: Identifying and capitalizing on opportunities by positioning against prevailing market sentiment is a core strategy.
• Meta’s Potential: Meta (META) is showing positive signals with potential for significant revenue growth, but requires careful risk management due to potential downside.
• Geopolitical Risk & Oil: Geopolitical tensions, particularly involving Iran, present a monetizable risk factor in the oil market.

Market Overview & Earnings Acceleration

The market is currently driven by accelerating earnings growth. The S&P 500 is experiencing growth of 21.5% based on current reports, exceeding the 15.1% seen in the best quarter of 2021, while the Russell index shows even stronger growth at 23%. This positive momentum is often downplayed by mainstream financial media like Bloomberg and CNBC. The core thesis is that revenue and cash flow acceleration are the primary drivers of stock prices. A “quad” framework is used to assess market conditions, with Quad 1 associated with dollar weakness and strength in gold and metals.

Stock-Specific Analysis & Trading Strategies

Brinker International (Chili’s): Previously highlighted as a successful long position, demonstrating the effectiveness of the signal-driven approach with 8.6% same-store sales growth despite challenging comparisons.

Meta (META): Analysts anticipate Q4 revenue growth exceeding consensus at 24%, potentially guiding Q1 towards 27%. While the signal is positive, one analyst remains cautious, prioritizing risk management and avoiding aggressive positioning during “game time” (around earnings releases). The preference is to enter positions when a stock is “puking” into a catalyst, rather than being long into a positive catalyst. Meta is currently “just above trend,” making it a difficult setup.

Apple (AAPL) & Microsoft (MSFT): Both are considered difficult setups, being “inside trend” or “just above trend.” The recommendation for Apple is to reduce positions on any strength.

Nvidia (NVDA): Nvidia received approval from China to receive H200 chips, supporting the bullish outlook.

Once Upon a Farm: An upcoming IPO with 40-60% growth, valued at approximately $1 billion, potentially an acquisition play similar to Annie’s.

HCA Healthcare: Previously discussed as a potential short opportunity.

GE Vernova (GEV): Highlighted as potentially overvalued despite long-term potential.

Macroeconomic & Geopolitical Considerations

Iran & Oil: The return of the USS Abraham Lincoln to the Gulf and warnings regarding Iran present a monetizable risk factor in oil. Analysts recommend buying dips in both WTI and Brent crude, given the inverse correlation between the dollar and the CRB index.

DC Political Situation: Legislative progress in DC is stalled, with a potential solution involving passing current bills and addressing Homeland Security concerns later.

Anthropic: The AI lab increased its revenue target to $18 billion (300% year-over-year growth), but profitability is now expected in 2028 due to high training costs (projected to exceed $100 billion this year, leading to $10-15 billion in losses).

Trading Philosophy & Methodology

The analysts emphasize a “winning or learning” approach, prioritizing continuous improvement and adaptation. A defined process is crucial, letting the signal dictate decisions rather than relying on personal opinions. They advocate for an intra-quarter reset of positions after earnings releases. The importance of understanding the tools and risk management is paramount, likened to understanding the safety function on a chainsaw. They utilize a signal-based trading methodology, focusing on stocks that “break trend” (bullish or bearish) and employing a “stop-loss” or “off-switch” for risk management.

Conclusion

The analysis presented highlights a disciplined, data-driven investment approach centered on identifying opportunities driven by accelerating earnings growth and capitalizing on market inefficiencies through contrarian positioning. A strong emphasis is placed on risk management, utilizing proprietary signals, and adapting to changing market conditions. The analysts advocate for a process-oriented approach, prioritizing objective data over subjective opinions and acknowledging the importance of continuous learning and refinement. Geopolitical risks are contextualized within a broader analytical framework, offering a pragmatic perspective on navigating complex investment landscapes.