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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.</li>
<li>We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI <a href="https://www.smartkarma.com/entities/ishares-msci-acwi-etf" target="_blank" data-smartkarma-citation="entities:24402:1" rel="noopener">iShares MSCI ACWI ETF (ACWI US)</a> .</li>
<li>$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US</li>
</ul>


Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.
We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI iShares MSCI ACWI ETF (ACWI US) .
$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US


Normal Pullback, or Something More?; Watching Resistance on DXY and 10-Yr Treasury Yield; Value Buys

EURO STOXX 50 Price EUR / Technical Analysis

<ul>
<li>As discussed in our previous Int'l Compass (June 29, 2023), we are bullish on global equities (MSCI ACWI) as long as ACWI-US is above $93, targeting $110</li>
<li>Bullish developments have continued: DXY breaking below $101-$101.50, RS bottoming for small-caps, MSCI ACWI ex-U.S. (ACWX-US) 1+ year breakout above $50, Italy's FTSE MIB breaking above multi-year resistance at 28,100.</li>
<li>This is only further evidence supporting our bullish outlook. We are getting the breakout above 4400-4415 on the EURO STOXX 50 that we've been expecting. Buys in Energy, Materials, Financials</li>
</ul>


As discussed in our previous Int'l Compass (June 29, 2023), we are bullish on global equities (MSCI ACWI) as long as ACWI-US is above $93, targeting $110
Bullish developments have continued: DXY breaking below $101-$101.50, RS bottoming for small-caps, MSCI ACWI ex-U.S. (ACWX-US) 1+ year breakout above $50, Italy's FTSE MIB breaking above multi-year resistance at 28,100.
This is only further evidence supporting our bullish outlook. We are getting the breakout above 4400-4415 on the EURO STOXX 50 that we've been expecting. Buys in Energy, Materials, Financials


Bullish Developments Continue; MSCI ACWI Ex-US 1-Yr Breakout; Buys in Energy, Materials, Financials

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Greiner AG is intensifying its battle to acquire <a href="https://www.smartkarma.com/entities/recticel-sa" target="_blank" data-smartkarma-citation="entities:33316:1" rel="noopener">Recticel SA (REC BB)</a>.
<ul>
<li>On 14 May, Greiner <a href="https://www.greiner.com/en/newsroom/greiner-ag-agrees-to-acquire-a-2703-stake-in-recticel-sa/" target="_blank" rel="noopener">communicated that it had reached a preliminary deal</a> to acquire a 27.03% stake in Recticel from Compagnie du Bois Sauvage SA (COMB BB), for a total of €203.8 mn, subject to conditions.</li>
<li>Both Compagnie du Bois Sauvage and Recticel were halted from trading on Friday, pending statements.</li>
<li>The purchase price is €13.5/share, post dividend distribution of €0.26.</li>
<li>
For an implied equity value (fully diluted) of €778.6 mn and an implied EV of €798.4 mn (dividend adjusted).
</li>
<li>
This represents 7.1x EV/21e EBITDA and 18.5x Fwd P/E.
</li>
</ul>
As for the timing, Recticel is holding an AGM on 25 May AGM, which will be followed by an EGM in which the Board will ask shareholders permission to issue more warrants (representing up to 25% of the shares now issued). Interestingly, Greiner intends to maintain Recticel’s listing on Euronext Brussels.
Based on my DCF calculations, my implied per share value is €18.71, a 38.6% discount to the prospective offer. Therefore, I believe the prospective offer price undervalues Recticel.
On a comparables basis (median EV/Fwd EBITDA), the implied price per share is €23.62. ING says the offer significantly undervalues Recticel, and it values the remaining shares at €23.5-25. Other issues is that we do not have any visibility in either Greiner's balance sheet (more specifically whether it will be able to fund any increase to the offer price) or the level of synergies.
I believe that Recticel's Board will fight, as it has done before, and it will not let the company get snapped cheaply. On the other hand, the 27% stake that Greiner is planning to acquire will act as a deterrent to other potential bidders. The shares are on an upward trajectory, trading c. 5% above the prospective offer price, thus I believe the downside risk is limited. Recommendation is long REC BB, TP €18.71.

Greiner AG is intensifying its battle to acquire Recticel SA (REC BB).

On 14 May, Greiner communicated that it had reached a preliminary deal to acquire a 27.03% stake in Recticel from Compagnie du Bois Sauvage SA (COMB BB), for a total of €203.8 mn, subject to conditions.
Both Compagnie du Bois Sauvage and Recticel were halted from trading on Friday, pending statements.
The purchase price is €13.5/share, post dividend distribution of €0.26.

For an implied equity value (fully diluted) of €778.6 mn and an implied EV of €798.4 mn (dividend adjusted).


This represents 7.1x EV/21e EBITDA and 18.5x Fwd P/E.


As for the timing, Recticel is holding an AGM on 25 May AGM, which will be followed by an EGM in which the Board will ask shareholders permission to issue more warrants (representing up to 25% of the shares now issued). Interestingly, Greiner intends to maintain Recticel’s listing on Euronext Brussels.
Based on my DCF calculations, my implied per share value is €18.71, a 38.6% discount to the prospective offer. Therefore, I believe the prospective offer price undervalues Recticel.
On a comparables basis (median EV/Fwd EBITDA), the implied price per share is €23.62. ING says the offer significantly undervalues Recticel, and it values the remaining shares at €23.5-25. Other issues is that we do not have any visibility in either Greiner's balance sheet (more specifically whether it will be able to fund any increase to the offer price) or the level of synergies.
I believe that Recticel's Board will fight, as it has done before, and it will not let the company get snapped cheaply. On the other hand, the 27% stake that Greiner is planning to acquire will act as a deterrent to other potential bidders. The shares are on an upward trajectory, trading c. 5% above the prospective offer price, thus I believe the downside risk is limited. Recommendation is long REC BB, TP €18.71.

Greiner/Recticel: Two-Year Old Takeover Battle

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is bullish and will continue to be as long as there is an absence of breakdowns. On the other hand, Europe’s EURO STOXX 50 and Japan’s TOPIX have struggled to break above resistance and their RS remains near the lows -- be selective. In addition to covering important technical levels across all markets, we highlight additional ideas in the following Sectors: Services, Communications, Industrials, and Transportation.

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is bullish and will continue to be as long as there is an absence of breakdowns. On the other hand, Europe’s EURO STOXX 50 and Japan’s TOPIX have struggled to break above resistance and their RS remains near the lows -- be selective. In addition to covering important technical levels across all markets, we highlight additional ideas in the following Sectors: Services, Communications, Industrials, and Transportation.

Global Equity Strategy: Bullish Outlook Intact

The probability for a breakout for global equities (MSCI ACWI) has increased in the past week based on several positive technical developments which we highlight below. Still, there are several indicators that continue to tell us we are not yet out of the woods. In this report we outline key technical levels and drivers across major markets, and highlight attractive set ups in the following areas: European &amp; UK Banks, Exchanges/Markets, Asset Managers, and Insurance, Major Autos and Communications.

The probability for a breakout for global equities (MSCI ACWI) has increased in the past week based on several positive technical developments which we highlight below. Still, there are several indicators that continue to tell us we are not yet out of the woods. In this report we outline key technical levels and drivers across major markets, and highlight attractive set ups in the following areas: European &amp; UK Banks, Exchanges/Markets, Asset Managers, and Insurance, Major Autos and Communications.

Global Equity Strategy: Bullish Breakout Probability on the Rise

Ireland

Kingspan Group PLC is a global market player in high performance insulation and building envelope technologies.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Kingspan (KSP ID)

Normal Pullback, or Something More?; Watching Resistance on DXY and 10-Yr Treasury Yield; Value Buys

Normal Pullback, or Something More for global equities?; Watch Resistance on $DXY and 10-Yr Treasury Yield; Value Buys in Consumer Discretionary...

Vermilion Research

Bullish Developments Continue; MSCI ACWI Ex-US 1-Yr Breakout; Buys in Energy, Materials, Financials

We remain bullish on global equities as long as $ACWI remains above $93, targeting $110; Bullish developments continue: $DXY below $101.50, small...

Vermilion Research

Greiner/Recticel: Two-Year Old Takeover Battle

I believe that Recticel's Board will fight, as it has done before. The shares are on an upward trajectory and I believe the downside risk is...

Jesus Rodriguez Aguilar

Global Equity Strategy: Bullish Outlook Intact

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is...

Vermilion Research

Global Equity Strategy: Bullish Breakout Probability on the Rise

The probability for a breakout for global equities (MSCI ACWI) has increased in the past week based on several positive technical developments...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)