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

<ul>
<li>Last week we noted that the bullish reversals had begun, with the MSCI ACWI (ACWI-US), STOXX Europe 50, and SPX the first few to reverse topside their 4-month downtrends.</li>
<li>As we discuss below, bullish reversals are proliferating globally, something that continues to support our belief that global equities are bottoming.</li>
<li>Global growth Sectors continue to gain momentum and have emerged as leadership -- overweight growth. Sectors covered today include Technology, Consumer Discretionary, and Industrials -- add exposure</li>
</ul>


Last week we noted that the bullish reversals had begun, with the MSCI ACWI (ACWI-US), STOXX Europe 50, and SPX the first few to reverse topside their 4-month downtrends.
As we discuss below, bullish reversals are proliferating globally, something that continues to support our belief that global equities are bottoming.
Global growth Sectors continue to gain momentum and have emerged as leadership -- overweight growth. Sectors covered today include Technology, Consumer Discretionary, and Industrials -- add exposure


Bullish Reversals Proliferate; Stick With Growth; Buy Ideas in Tech, Discretionary, & Industrials

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration (LNK AU)</a> scheme meeting is scheduled for 22 August. The independent expert has concluded that the revised Dye &amp; Durham/DND offer is fair and reasonable.</li>
<li>There are several conditions precedents which could yet derail the deal. The key hurdles are the ACCC approval, ongoing FCA investigation and regulatory approval for certain DND shareholders.</li>
<li>At the last close, the gross and annualised spread to a 27 September payment is 9.3% and 79.1%, respectively. Ongoing satisfaction of conditions is the key catalyst.</li>
</ul>


The Link Administration (LNK AU) scheme meeting is scheduled for 22 August. The independent expert has concluded that the revised Dye &amp; Durham/DND offer is fair and reasonable.
There are several conditions precedents which could yet derail the deal. The key hurdles are the ACCC approval, ongoing FCA investigation and regulatory approval for certain DND shareholders.
At the last close, the gross and annualised spread to a 27 September payment is 9.3% and 79.1%, respectively. Ongoing satisfaction of conditions is the key catalyst.


Link’s New Scheme Meeting on 22 August but Deal Break Risks Remain

<ul>
<li>
<a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration (LNK AU)</a> has entered a revised scheme implementation deed with Dye&amp;Durham/DND at A$4.81 per share. The scheme meeting will be held in mid-August.</li>
<li>Shareholders will be supportive due to deal fatigue, and the offer price is 11% above the undisturbed price and at the low end of the original IE valuation range.</li>
<li>Regulatory approvals are a key risk. DND is presumably confident in its undertakings to gain ACCC approval. At last close, the gross spread is 7.8%.</li>
</ul>



Link Administration (LNK AU) has entered a revised scheme implementation deed with Dye&amp;Durham/DND at A$4.81 per share. The scheme meeting will be held in mid-August.
Shareholders will be supportive due to deal fatigue, and the offer price is 11% above the undisturbed price and at the low end of the original IE valuation range.
Regulatory approvals are a key risk. DND is presumably confident in its undertakings to gain ACCC approval. At last close, the gross spread is 7.8%.


<ul>
<li>The <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration (LNK AU)</a> Board will not recommend Dye&amp;Durham/DND’s revised lower offer of A$4.57 per share due to shareholder feedback, the underlying value and alternative options.</li>
<li>The slightly above guidance is designed to show that Link's contribution to DND's build a billion objective remains on track and there is little chance of triggering the MAC clause.</li>
<li>DND needs to secure a deal this week to use its attractive deal financing, according to AFR. This could be the cue for DND to give a little more.</li>
</ul>


The Link Administration (LNK AU) Board will not recommend Dye&amp;Durham/DND’s revised lower offer of A$4.57 per share due to shareholder feedback, the underlying value and alternative options.
The slightly above guidance is designed to show that Link's contribution to DND's build a billion objective remains on track and there is little chance of triggering the MAC clause.
DND needs to secure a deal this week to use its attractive deal financing, according to AFR. This could be the cue for DND to give a little more.


<ul>
<li>Dye &amp; Durham/DND has bumped its lowered offer by 6.3% to A$4.57 per share. The <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration (LNK AU)</a> Board has postponed the 13 July scheme meeting to facilitate discussions. </li>
<li>DND's "sweetened" A$4.57 base consideration plus the potential BCM consideration of A$0.13 totals exactly A$4.70 per share. This suggests that Board is aiming for a A$4.70 base consideration.  </li>
<li>DND is clearly interested in Link. Bridging the 2.8% price gap between the buyer’s and seller’s price aspirations is not onerous and suggests a deal can get done.</li>
</ul>


Dye &amp; Durham/DND has bumped its lowered offer by 6.3% to A$4.57 per share. The Link Administration (LNK AU) Board has postponed the 13 July scheme meeting to facilitate discussions. 
DND's "sweetened" A$4.57 base consideration plus the potential BCM consideration of A$0.13 totals exactly A$4.70 per share. This suggests that Board is aiming for a A$4.70 base consideration.  
DND is clearly interested in Link. Bridging the 2.8% price gap between the buyer’s and seller’s price aspirations is not onerous and suggests a deal can get done.


Link Narrows the Price Gap as DND Bumps Its Lowered Offer

Australia

Iress Limited provides real-time information services to businesses that specialize in the equity, equity options and future information markets in Australia and New Zealand. The Group supplies a range of pricing data, charting, news and equity and equity derivatives and also offers real-time trading tools, including a domestic order routing product and financial

Link Administration Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides fund administration, corporate markets, information, and digital and data services. Link Administration Holdings serves customers worldwide.

Data#3 Limited provides Information Technology (IT) solutions to business and government markets in Australia.  These solutions integrate equipment and software from leading suppliers with Data#3's own design, management, installation and support services including procurement, recruitment and application services.

NEXTDC Ltd. develops data centers. The Company develops and operates carrier and systems integrator neutral data centers in Australia. NEXTDC's customers will also be able to use the data centers as connectivity and content hubs.

Altium Limited develops electronic design automation (EDA) software for the Microsoft Windows operating system.  Altium's products facilitate and aid in the design of electronic products such as printed circuit boards.  The Group's products are utilized by telecommunications, automotive, defense, science and consumer electronics industries.

Technology One Limited is an Australian-based company that is engaged in the development, marketing, sales, implementation, support, and distribution of financial management and enterprise software solutions. The Company has operations in New Zealand, the United Kingdom, the South Pacific, and Malaysia.

Appen Ltd is a language, search, and social technology company. The Company provides solutions to improve internalization of products, management of data, and project management for companies.

Megaport Limited operates as a software-based elastic connectivity provider. The Company develops an elastic connectivity platform that provides customers interconnectivity and flexibility between other networks and cloud providers connected to the platform. Megaport serves customers worldwide.

Objective Corporation Limited manufactures knowledge management application software.  The Company's products allow users to access and manage word processing documents, spreadsheets, web page content and e-mails.  Objective also develops branded software which provides template-based conversion of documents to HTML.

Hansen Technologies Limited develops, supports and integrates billing systems software for the telecommunications and utilities sectors in Australia.  The Company also provides IT outsourcing services such as facilities management and develops software and services for workforce management.

Samsung SDS Co., Ltd. provides information technology services, such as consulting and technical services. The Company also offers outsourcing services including application outsourcing, IT infrastructure outsourcing, and cloud computing.

OBIC Co., Ltd. provides computer system integration, office automation, consultation, and system support services primarily for small and medium size companies.  The Company sells, leases, and maintains computers, peripherals, and related systems.  OBIC also develops and sells customized software and network systems.

Genpact Limited designs and manages business operations to manage risk and compliance. The Company focuses on the areas of finance and procurement, financial services account servicing, claims management, regulatory affairs, and industrial asset optimization. Genpact operates worldwide.

ITOCHU Techno-Solutions Corporation develops and constructs computer network systems and software.  The Company also provides system maintenance services. Itochu Techno-Solutions also offers solution consulting services.

MAXIMUS, Inc. provides program management and consulting services to state and local governments throughout the United States.  The Company's services are designed to make government operations more efficient and cost effective while improving the quality of the services provided to program beneficiaries.

CACI International Inc. provides information technology products and services. The Company delivers client solutions for systems integration, information assurance and security, reengineering, logistics and engineering support, electronic commerce, and other solutions.  CACI serves government and commercial markets primarily in North America and Western Europe.

OTSUKA Corporation designs, constructs, and develops computer information system and software.  The Company also sells computer peripherals, facsimiles, copy machines, and telecommunication equipment.  Otsuka offers computer training classes for its customers.

Mphasis Limited is a global IT and BPO service provider to G2000 companies around the globe, assists its clients in innovating and streamlining their business processes by offering custom solutions for technology and operations outsourcing. The Company focuses on financial services, logistics and technology verticals.

Persistent Systems Limited offers outsourced software product development. The Company offer services that include testing, support, and professional services.

WEX Inc. provides payment processing and information management services to the United States commercial and government vehicle fleet industry. The Company markets services directly to businesses and government agencies with vehicle fleets, automotive manufacturers, fuel retailers.

Computershare Limited operates share registries and computer bureaus which includes the administration of employee share and option plans and the provision of software that specializes in share registry, financial and stock markets. The Company also provides corporate trust services and acts as a trustee for clients' debt offerings in certain markets.

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Computershare Ltd (CPU AU)

Bullish Reversals Proliferate; Stick With Growth; Buy Ideas in Tech, Discretionary, & Industrials

Bullish reversals begun last week in $ACWI, $SPX, and $STOXX Europe 50, with each reversing topside their 4-month downtrends. Now, bullish...

Vermilion Research

Link’s New Scheme Meeting on 22 August but Deal Break Risks Remain

There are several conditions precedents which could yet derail the deal. Ongoing satisfaction of conditions is the key catalyst. At the last close,...

Arun George

Link and DND Shake Hands at A$4.81

Shareholders will be supportive of the A$4.81 offer. Regulatory approvals are the key risk. At the last close, the gross spread to the offer is 7.8%.

Arun George

Link’s Board Shows Its Hand

Link's Board is holding out for a little more and the guidance supports its case. DND is running out of time to use its deal financing. A marginal...

Arun George

Link Narrows the Price Gap as DND Bumps Its Lowered Offer

A A$4.70 base consideration is likely the magic number for the buyer and seller to shake hands. Bridging the 2.8% price gap is not onerous and...

Arun George

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