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

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

Global Equity Strategy: Constructive Pullback; Overweight Value

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul><li>
<a href="https://www.smartkarma.com/entities/christian-dior-se" target="_blank" data-smartkarma-citation="entities:21415:1" rel="noopener">Christian Dior SE (CDI FP)</a>’s 41.2% owned listed subsidiary, <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a>, has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer <a href="https://www.smartkarma.com/entities/tiffany-co" target="_blank" data-smartkarma-citation="entities:14729:1" rel="noopener">Tiffany &amp; Co (TIF US)</a>.</li></ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/184/744/original/image_9822495321611673131890.png?1611673132" class="editor-image img-responsive" data-smartkarma-image-id="184744"></figure><ul>
<li>After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7th January for $15.8bn, a 3% discount to LVMH’s original offer.</li>
<li>Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.</li>
<li>Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.</li>
</ul>


Christian Dior SE (CDI FP)’s 41.2% owned listed subsidiary, Lvmh Moet Hennessy Louis Vuitton (MC FP), has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer Tiffany &amp; Co (TIF US).
After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7th January for $15.8bn, a 3% discount to LVMH’s original offer.
Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.
Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.


Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. We see global equities as being in a goldilocks scenario where market dynamics and technicals are arguably 100% bullish. Of course, at some point this almost too good to be true scenario is likely to result in a pullback, but for now we see no signs of this rally letting up.  In our December International Strategy, we highlight areas of the market where we see actionable opportunities in Technology, Consumer Discretionary, Materials and Manufacturing.

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. We see global equities as being in a goldilocks scenario where market dynamics and technicals are arguably 100% bullish. Of course, at some point this almost too good to be true scenario is likely to result in a pullback, but for now we see no signs of this rally letting up.  In our December International Strategy, we highlight areas of the market where we see actionable opportunities in Technology, Consumer Discretionary, Materials and Manufacturing.

Global Equity Strategy: Bullish Outlook Intact

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>Despite the elevated valuation, family-controlled Hermes demonstrates its superior quality from a business-owner perspective, and hence, is worth following among patient investors;</li>
<li>At the same time, we find that the French heritage name has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in the foreseeable future.</li>
</ul>


Despite the elevated valuation, family-controlled Hermes demonstrates its superior quality from a business-owner perspective, and hence, is worth following among patient investors;
At the same time, we find that the French heritage name has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in the foreseeable future.


Hermes: An Increasingly APAC-Driven Story

We continue to be encouraged by market dynamics that are supportive of an ongoing equity bull market. Additionally, there continues to be an absence of breakdowns on the major global indexes (MSCI ACWI, ACWI ex-US, EM, &amp; EAFE). As a result, our outlook remains bullish.  In this report we show some love to various Sectors that have not been big attention-grabbers for us in recent months, but still have plenty of attractive stocks. The stocks highlighted hail from a variety of countries. Sectors covered include Services, Communications, Staples, Financials, and Utilities.

We continue to be encouraged by market dynamics that are supportive of an ongoing equity bull market. Additionally, there continues to be an absence of breakdowns on the major global indexes (MSCI ACWI, ACWI ex-US, EM, &amp; EAFE). As a result, our outlook remains bullish.  In this report we show some love to various Sectors that have not been big attention-grabbers for us in recent months, but still have plenty of attractive stocks. The stocks highlighted hail from a variety of countries. Sectors covered include Services, Communications, Staples, Financials, and Utilities.

Global Equity Strategy: Market Dynamics Remain Positive, And So Are We

France

Christian Dior SE manufactures luxury products such as upscale clothing, champagne and wines, cognac and spirits, luggage and leather goods, perfumes and cosmetics, and jewelry and watches.  The Company markets its products internationally.

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Christian Dior SE (CDI FP)

Global Equity Strategy: Constructive Pullback; Overweight Value

As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we...

Vermilion Research

Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition

Dior’s current NAV discount is 23.9%, compared to an undisturbed long-term average discount range of 10-18%. As trading volumes of LVMH normalises...

Oshadhi Kumarasiri

Global Equity Strategy: Bullish Outlook Intact

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. In this report, we...

Vermilion Research

Hermes: An Increasingly APAC-Driven Story

The French heritage story has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in...

Steven Chen

Global Equity Strategy: Market Dynamics Remain Positive, And So Are We

We show some love to various Sectors that have not been big attention-grabbers for us in recent months, including Services, Communications,...

Vermilion Research

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