Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

In our second report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we analyse issuers in the speciality finance sector. We believe this sector will be affected by the current crisis with a lag, due to two adverse trends: i) mounting concerns about unsecured consumer credit; and ii) knock-on effects from significantly reduced economic activity (e.g. lower real-wage growth and higher unemployment).

  In our second report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we analyse issuers in the speciality finance sector.   We believe this sector will be affected by the current crisis with a lag, due to two adverse trends: i) mounting concerns about unsecured consumer credit; and ii) knock-on effects from significantly reduced economic activity (e.g. lower real-wage growth and higher unemployment). 

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 2 (Speciality Finance) - Lucror Analytics

Europe has already been suffering anaemic growth in recent years, and the region will likely be severely affected by the COVID-19 pandemic. With the virus having spread like wildfire through the continent and various countries under lockdown, we are re-assessing the liquidity positions of companies in our European HY coverage universe amid the crisis. In our first report for this series, we analyse issuers in the gaming and oil & gas / refining sectors.

  Europe has already been suffering anaemic growth in recent years, and the region will likely be severely affected by the COVID-19 pandemic. With the virus having spread like wildfire through the continent and various countries under lockdown, we are re-assessing the liquidity positions of companies in our European HY coverage universe amid the crisis.   In our first report for this series, we analyse issuers in the gaming and oil & gas / refining sectors. 

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 1 (Gaming, Oil & Gas) - Lucror Analytics

While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread rapidly across continents.آ  In our view, key concerns include: [1] potential demand impact on industries with significant human interaction; [2] potential impact on the economy if consumer sentiment deteriorates materially; [3] potential impact on labour force productivity; [4] potential impact on the supply chains of industries; and [5] potential impact on financial markets. We are cautious on companies which are highly levered, cyclical, have limited liquidity or significant debt maturities in the near term. In the report, we assess the impact of COVID-19 on: [1] Europe, China/Asia and the Americas; [2] supply chains; and [3] the sectors and companies under our coverage.

  While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread rapidly across continents.آ    In our view, key concerns include: [1] potential demand impact on industries with significant human interaction; [2] potential impact on the economy if consumer sentiment deteriorates materially; [3] potential impact on labour force productivity; [4] potential impact on the supply chains of industries; and [5] potential impact on financial markets. We are cautious on companies which are highly levered, cyclical, have limited liquidity or significant debt maturities in the near term.   In the report, we assess the impact of COVID-19 on: [1] Europe, China/Asia and the Americas; [2] supply chains; and [3] the sectors and companies under our coverage. 

COVID-19: Impact On Global High Yield - Lucror Analytics

As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an uncontrolled Brexit averted for the time being, almost all asset classes recorded strong performance during the year, including European HY. Going forward, Brexit and US-China trade relations may well remain major market drivers. Other potential drivers include the coronavirus outbreak in China, tensions in the Middle East and the development of US-EU trade relations. Our HY investment outlook opens with a discussion on the key macro developments that defined 2019, and the outlook for 2020. We then provide an overview of the HY market performance, and offer our top trade ideas for the year. Finally, we zoom in on the developments for key sectors and companies in our coverage universe, including outlooks and trade recommendations.

   As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an uncontrolled Brexit averted for the time being, almost all asset classes recorded strong performance during the year, including European HY. Going forward, Brexit and US-China trade relations may well remain major market drivers. Other potential drivers include the coronavirus outbreak in China, tensions in the Middle East and the development of US-EU trade relations.    Our HY investment outlook opens with a discussion on the key macro developments that defined 2019, and the outlook for 2020. We then provide an overview of the HY market performance, and offer our top trade ideas for the year. Finally, we zoom in on the developments for key sectors and companies in our coverage universe, including outlooks and trade recommendations. 

European High Yield Outlook 2020 - Lucror Analytics

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

The laundry list of current market conditions consistent with the profile of a bull market continues to grow, helping support our ongoing belief that global equities are in the early stages of a broad-based advance. We explore and highlight actionable investment themes and opportunities across the EM space and within materials, Energy, Manufacturing, Health care and Apparel/Luxury Goods

The laundry list of current market conditions consistent with the profile of a bull market continues to grow, helping support our ongoing belief that global equities are in the early stages of a broad-based advance. We explore and highlight actionable investment themes and opportunities across the EM space and within materials, Energy, Manufacturing, Health care and Apparel/Luxury Goods

France

Valeo designs and manufactures automobile components. The Company offers clutches, engine cooling parts, lighting, electrical systems, windshield wipers, motors and actuators, security systems, electronics, and connective systems. Valeo serves automotive industry worldwide.

Plastic Omnium SA provides solutions tailored to meet the needs of worldwide carmakers and community residents.  The Company's products include automotive body modules and fuel systems as well as waste containerization products and services.  Plastic Omnium focuses on innovations which reduce car weight and fuel consumption.

Burelle SA, through subsidiaries, manufactures plastic products and street signage, and invests in real estate.  The Company produces plastic automobile body parts and fuel tanks, waste collection and recycling containers, playground equipment, high-performance resins, diagnostic disposables, inhalers and injection devices, and owns office buildings.

MGI Coutier designs, manufactures, and sells plastic and metal components. These products are used in building ventilation (vents and ducts), automobile bodies, carburetors, and window and door handles, and building materials.  The Company has factories and sales branches in France, Spain, Turkey, and the United States.

Eutelsat Communications is a KU-band satellite operator.  The Company offers television and radio broadcasting, video broadcasting, corporate networks, Internet access, and mobile communications.  Eutelsat serves Europe, the Middle East, Africa, Asia, eastern North America, and South America.

Metropole Television SA owns and operates the television entertainment channel M6.  The Company, through its subsidiaries, holds interests in other television stations, films, audio and video editing and distribution, teleshopping, and specialty television productions and programming.  Metropole is also involved in multimedia diversification, music, interactive TV, and the Internet.

Societe Television Francaise 1 operates the French television channel TF1.  The Company produces news, drama, documentaries, sports, and children's programs. In addition, TF1 publishes and distributes videocassettes, publishes and records music on tapes and CD's, and operates a home shopping program via television and the Internet.

Trigano S.A. manufactures recreational vehicles.  The Company produces, sells, and rents motor homes and travel and industrial trailers.  Trigano also manufactures garden equipment and accessories for motor homes and trailers.

Criteo SA is a global commerce marketing technology company. The Company helps commerce companies and brand manufacturers acquire, convert and re-engage their customers, using shopping data, predictive technology and large consumer reach. Criteo prices its offering on a cost-per-click and measures its value based on post-click sales.

Ipsos conducts market research.  The Company offers advertising, marketing, media, public opinion, and social research.  All of Ipsos's research is derived from surveys.  The Company operates in Europe, Latin America, Asia/Pacific Rim, the United States, and the Middle East.

NIFCO INC. manufactures synthetic resinous fasteners and plastic components for automobiles and home electronic appliances.  The Company has its subsidiaries in Korea, Hong Kong, Australia, Malaysia, Singapore, and the US.

Dana Incorporated engineers, manufactures, and distributes components and systems for worldwide automotive, heavy truck, off-highway, engine, and industrial markets. The Company also provides leasing services in selected markets.

NOK CORPORATION manufactures oil seals and industrial rubber products for automobiles.  The Company also produces electronic equipment used for cellular phones and PCs.  NOK has production facilities in Taiwan and Thailand.

Zhejiang Yinlun Machinery Co.,Ltd. develops, manufactures and markets steel plate oil cooler, concentric oil cooler, shell and tube oil cooler. The company's products are used in automobile engine systems and automatic transmission systems.

Zhejiang Yinlun Machinery Co,Ltd. (002126 CH)

Sumitomo Rubber Industries, Ltd. manufactures automobile and motorcycle tires, industrial rubber products and sports equipment.  The Company's products include golf balls, tennis rackets, rubber gloves, and artificial turf. Sumitomo Rubber sells its products under Dunlop brand around the world.

TS TECH CO., LTD. manufactures seats for two-wheeled and four-wheeled vehicles. The Company also produces other automobile accessories.

Minth Group Ltd. manufactures exterior automobile body parts.  The Company produces structural body parts, decorative parts, and trim.  Minth supplies multinational automobile manufacturers operating in China.

Hanon Systems manufactures a variety of automotive air control equipment.  The Company's products include air conditioners, heaters, cooling modules, compressors, radiators, fans, evaporators, and condensers. Hanon Systems distributes its products on an original equipment manufacturing (OEM) basis.

LCI Industries manufactures recreational vehicles and equipment. The Company offers toolboxes, truck caps, running boards, side-outs, mattresses, alignment systems, shock absorber, power stabilizer jacks, baggage doors, and sliders. LCI Industries markets its products worldwide.

Wanxiang Qianchao Co., Ltd. manufactures and markets a variety of auto parts. The Company's products include universal joints, car vibration absorbers, transmission systems, bearings, and other related parts.  Wanxiang also trades merchandises.

Faurecia manufactures automobile parts.  The Company produces seats, vehicle interiors, exhaust systems, and front-end body parts.  The Company's customers include Peugeot Citroen, Renault, Volkswagen, DaimlerChrysler, Fiat, General Motors, Ford, and Toyota.

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Faurecia (EO FP)

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 2 (Speciality Finance) - Lucror Analytics

In our second report on the liquidity positions of companies in our European HY coverage universe amid the COVID-19 pandemic and oil shock, we...

Lucror Analytics

COVID-19 / Oil Shock: Liquidity Analysis Of Europe Corporates - Part 1 (Gaming, Oil & Gas) - Lucror Analytics

Europe has already been suffering anaemic growth in recent years, and the region will likely be severely affected by the COVID-19 pandemic. With...

Lucror Analytics

COVID-19: Impact On Global High Yield - Lucror Analytics

While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread...

Lucror Analytics

European High Yield Outlook 2020 - Lucror Analytics

As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an...

Lucror Analytics

EM Breakout -- Add Exposure

The laundry list of current market conditions consistent with the profile of a bull market continues to grow, helping support our ongoing belief...

Vermilion Research

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