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

NASDAQ Composite Index / Technical Analysis

<ul>
<li>Following last week's pullback, a consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports.</li>
<li>As long as these base supports continue to hold, it tells us this is likely just a normal pullback within the overall bullish trend.</li>
<li>Important supports that we need to see hold in order to remain bullish include 4600 on the S&amp;P 500 and 14,400 on the Nasdaq Composite.</li>
</ul>


Following last week's pullback, a consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports.
As long as these base supports continue to hold, it tells us this is likely just a normal pullback within the overall bullish trend.
Important supports that we need to see hold in order to remain bullish include 4600 on the S&amp;P 500 and 14,400 on the Nasdaq Composite.


Major Base Supports Holding; DXY Testing the 2-Month Downtrend; 4600 on SPX Remains Key Support

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

<ul>
<li>Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar. </li>
<li>In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B. </li>
<li>My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps. </li>
</ul>


Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar. 
In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B. 
My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps. 


Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

<ul>
<li>Waystar Holding, a cloud-based technology company and healthcare RCM solution provider, filed for a $100M placeholder IPO.</li>
<li>Founded in 2017 through the merger of two healthcare firms, ZirMed and Navicure, Waystar Holding provides mission-critical cloud software to healthcare organizations in the United States. </li>
<li>The company has ~$2.3B of outstanding borrowings and plans to use net proceeds from an upcoming IPO to repay outstanding indebtedness under credit facilities. </li>
</ul>


Waystar Holding, a cloud-based technology company and healthcare RCM solution provider, filed for a $100M placeholder IPO.
Founded in 2017 through the merger of two healthcare firms, ZirMed and Navicure, Waystar Holding provides mission-critical cloud software to healthcare organizations in the United States. 
The company has ~$2.3B of outstanding borrowings and plans to use net proceeds from an upcoming IPO to repay outstanding indebtedness under credit facilities. 


Waystar IPO Preview: Debt-Fueled Expansion Through M&A Deals In A High-Interest Rate Environment

<ul>
<li>Expectations since late-September remain unchanged; if $SPX is above 4165-4200/200-day MA, we're bullish, as most signs point to this being a normal pullback within the ongoing bullish trend in SPX.</li>
<li>As discussed last week (10/11/23), we have growing confidence that lows are likely in on the SPX, which made a low at 4216 (with 4200 hit exactly overnight 10/4/23).</li>
<li>We also discussed Russell 2000 breadth bottoming last week, and this has continued with bullish breadth divergences on Russell 2000 % of stocks above their 50- and 200-day MAs</li>
</ul>


Expectations since late-September remain unchanged; if $SPX is above 4165-4200/200-day MA, we're bullish, as most signs point to this being a normal pullback within the ongoing bullish trend in SPX.
As discussed last week (10/11/23), we have growing confidence that lows are likely in on the SPX, which made a low at 4216 (with 4200 hit exactly overnight 10/4/23).
We also discussed Russell 2000 breadth bottoming last week, and this has continued with bullish breadth divergences on Russell 2000 % of stocks above their 50- and 200-day MAs


Russell 2000 With Bullish Breadth Divergences; Buys in Insurance and Health Care Distributors

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>McKesson managed an all-around beat in the last quarter, closing out a solid fiscal 2023 with full-year revenues of $277 billion and adjusted earnings per diluted share of $25.94.</li><li>The core Pharmaceutical Distribution business supported growth in the U.S.</li><li>Pharmaceutical segment, and they divested their European operations to streamline their portfolio.</li></ul>

McKesson managed an all-around beat in the last quarter, closing out a solid fiscal 2023 with full-year revenues of $277 billion and adjusted earnings per diluted share of $25.94.The core Pharmaceutical Distribution business supported growth in the U.S.Pharmaceutical segment, and they divested their European operations to streamline their portfolio.

McKesson Corporation: A Streamlined Portfolio After Recent Divestitures – Key Drivers

United States

McKesson Corporation distributes pharmaceuticals, medical-surgical supplies, and health and beauty care products throughout North America. The Company also develops, implements, and supports software that facilitates the integration of data throughout the health enterprise.  In addition, McKesson offers analytic, care management, and patient solutions for payers.

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Mckesson Corp (MCK US)

Major Base Supports Holding; DXY Testing the 2-Month Downtrend; 4600 on SPX Remains Key Support

A consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports...

Vermilion Research

Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

In my insight, I will focus on the IPO valuation of Waystar Holding, a healthcare IT unicorn and provider of mission-critical cloud software to...

Andrei Zakharov

Waystar IPO Preview: Debt-Fueled Expansion Through M&A Deals In A High-Interest Rate Environment

Waystar Holding IPO looks risky in a high-interest rate environment, given the company’s debt-fueled expansion through a series of M&A deals.

Andrei Zakharov

Russell 2000 With Bullish Breadth Divergences; Buys in Insurance and Health Care Distributors

Our view since late Sept remains unchanged: if $SPX is above 4165-4200 and the 200-day MA, we are bullish, as most signs point to this being a...

Vermilion Research

McKesson Corporation: A Streamlined Portfolio After Recent Divestitures – Key Drivers

McKesson managed an all-around beat in the last quarter, closing out a solid fiscal 2023 with full-year revenues of $277 billion and adjusted...

Baptista Research

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