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

Our outlook remains bullish and we continue to believe that the path of least resistance remains higher for global equities (MSCI ACWI). As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EM (EEM-US), and EAFE (EFA-US) are above their respective intermediate-term support levels we believe a positive outlook is warranted. Support levels to watch include $75 on ACWI-US, $44 on ACWX-US, $41 on EEM-US, and $60 on EFA-US. We recap significant technical levels across major markets and highlight specific opportunities within the Technology and Materials Sectors.

Our outlook remains bullish and we continue to believe that the path of least resistance remains higher for global equities (MSCI ACWI). As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EM (EEM-US), and EAFE (EFA-US) are above their respective intermediate-term support levels we believe a positive outlook is warranted. Support levels to watch include $75 on ACWI-US, $44 on ACWX-US, $41 on EEM-US, and $60 on EFA-US. We recap significant technical levels across major markets and highlight specific opportunities within the Technology and Materials Sectors.

Global Equity Strategy: Bullish Outlook Intact

Director | Exposing Creative Accounting, Bucephalus Research Partnership

Robert Medd

Director | Exposing Creative Accounting

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

​Bucephalus Research Partnership:
- Is an independent fee-based research service
- Does not take proprietary positions, long or short
- Does not solicit business or fees from the corporates we review

Forensic Accounting

WiseTech trumpeted its H1 results: revenue +31% and EBITDA +29% as vindication of the model.  The problem is that growth is M&amp;A driven, revenue at key customers was flat or down, like-for-like profit margin fell, pre-financing cashflow was negative, acquisitions are performing worse than expected and, having said “no capital raises” in April, they issued equity in May. The metrics they use are obtuse and useless for measuring their real performance, but it is quite clear that asset returns are collapsing. A roll-up with a 4% return on investment on 15x sales and 300x business cashflow looks over-priced. SELL

WiseTech trumpeted its H1 results: revenue +31% and EBITDA +29% as vindication of the model.  The problem is that growth is M&amp;A driven, revenue at key customers was flat or down, like-for-like profit margin fell, pre-financing cashflow was negative, acquisitions are performing worse than expected and, having said “no capital raises” in April, they issued equity in May. The metrics they use are obtuse and useless for measuring their real performance, but it is quite clear that asset returns are collapsing. A roll-up with a 4% return on investment on 15x sales and 300x business cashflow looks over-priced. SELL

WiseTech (WTC AU): Smoke and Mirrors, Sell

We continue to see coronavirus concerns as helping correct the excess bullish sentiment across global equity markets in the short-term. Additionally, considering the dearth of breakdowns, we continue to believe this is a bull market until proven otherwise and a “buy the dip” strategy remains warranted. We recap importat technical levels across markets and highlight opportunities within the Services, Technology, Financial Services, and Staples Sectors.

We continue to see coronavirus concerns as helping correct the excess bullish sentiment across global equity markets in the short-term. Additionally, considering the dearth of breakdowns, we continue to believe this is a bull market until proven otherwise and a “buy the dip” strategy remains warranted. We recap importat technical levels across markets and highlight opportunities within the Services, Technology, Financial Services, and Staples Sectors.

Global Equity Strategy: Growth Over Value

WiseTech asked to see our report and questions. There were no direct answers, simply a standardised email that stated that recent disclosures “firmly and comprehensively refuted our claims”, that they “reject misunderstanding, selective representation or mis-representation” and that they comply with all the local standards. This is odd because our questions came after the October filings,  they didn’t note any errors or incorrect conclusions and we think they are the ones using selective representation or mis-representation. We wonder if WiseTech has chosen to “take the fifth”, i.e. silence over self-incrimination.

WiseTech asked to see our report and questions. There were no direct answers, simply a standardised email that stated that recent disclosures “firmly and comprehensively refuted our claims”, that they “reject misunderstanding, selective representation or mis-representation” and that they comply with all the local standards. This is odd because our questions came after the October filings,  they didn’t note any errors or incorrect conclusions and we think they are the ones using selective representation or mis-representation. We wonder if WiseTech has chosen to “take the fifth”, i.e. silence over self-incrimination.

Adobe (ADBE US), the original Software as a Service (SaaS) success story, showed that online conversion could drive revenue, operating leverage and cash generation.  The Australian logistics software company WiseTech (WTC) isan accounting fiction,Slowing growth, negative operating leverage, overvalued intangibles, no profits or cashflow, black box accounting and related party deals.  living the SaaS dream, on 25x sales.It is time for wise technology investors to wake up and move on.

Adobe (ADBE US), the original Software as a Service (SaaS) success story, showed that online conversion could drive revenue, operating leverage and cash generation.  The Australian logistics software company WiseTech (WTC) isan accounting fiction,Slowing growth, negative operating leverage, overvalued intangibles, no profits or cashflow, black box accounting and related party deals.  living the SaaS dream, on 25x sales.It is time for wise technology investors to wake up and move on.  

SELL WiseTech (WTC AU): Slowing Growth, Negative Real Cashflow and Blackbox Accounting

Canada

The Descartes Systems Group Inc. provides inter-enterprise software for the execution of supply-chain management, especially for delivery-intensive companies.  The Company's products allow users to share and process information via the Internet.  Descartes licenses software to customers worldwide.

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Descartes Systems Grp (DSG CN)

Global Equity Strategy: Bullish Outlook Intact

Our outlook remains bullish and we continue to believe that the path of least resistance remains higher for global equities (MSCI ACWI). As long as...

Vermilion Research

WiseTech (WTC AU): Smoke and Mirrors, Sell

WiseTech trumpeted its H1 results: revenue +31% and EBITDA +29% as vindication of the model. The problem is that growth is M&A driven, revenue...

Bucephalus Research Partnership

Global Equity Strategy: Growth Over Value

We continue to see coronavirus concerns as helping correct the excess bullish sentiment across global equity markets in the short-term....

Vermilion Research

Wisetech: Taking the Fifth

WiseTech asked to see our report and questions. There were no direct answers, simply a standardised email that stated that recent disclosures...

Bucephalus Research Partnership

SELL WiseTech (WTC AU): Slowing Growth, Negative Real Cashflow and Blackbox Accounting

Adobe (ADBE US), the original Software as a Service (SaaS) success story, showed that online conversion could drive revenue, operating leverage and...

Bucephalus Research Partnership

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