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

<p style="text-align: justify;">Our weight of the evidence approach leads us to believe the market remains in the early stages of a broad-based advance, meaning a buy-the-dip mentality is warranted. While we want to acknowledge that the potential for a US-China tariff escalation remains a risk for the market, we believe this is likely to be the case for the foreseeable future. In our December International Strategy, we highlight various themes which lead to our positive outlook, including actionable trade ideas in technology, health care and manufacturing.</p>

Our weight of the evidence approach leads us to believe the market remains in the early stages of a broad-based advance, meaning a buy-the-dip mentality is warranted. While we want to acknowledge that the potential for a US-China tariff escalation remains a risk for the market, we believe this is likely to be the case for the foreseeable future. In our December International Strategy, we highlight various themes which lead to our positive outlook, including actionable trade ideas in technology, health care and manufacturing.

Global Equities Headed Up and to the Right: Technology, Health Care Leading

TSE Tokyo Price Index TOPIX / Technical Analysis

<p style="text-align: justify;">In this report we highlight attractive and actionable themes within developed int’l markets: Technology and Industrials continue to be two of the most attractive Sectors globally -- overweight. These two Sectors account for half of today’s individual recommendations Countries that are (1) developing positively in terms of price and RS and (2) have significant representation in this report include: Japan (<strong>TOPIX</strong>), Switzerland (<strong>SMI</strong>), and France (<strong>CAC 40</strong>).</p><p style="text-align: justify;">Outside of the above themes, a bottoms-up approach is required to uncover attractive and actionable stocks. On page 4 we include a table of all stocks highlighted in this report<em>. </em></p>

In this report we highlight attractive and actionable themes within developed int’l markets: Technology and Industrials continue to be two of the most attractive Sectors globally -- overweight. These two Sectors account for half of today’s individual recommendations Countries that are (1) developing positively in terms of price and RS and (2) have significant representation in this report include: Japan (TOPIX), Switzerland (SMI), and France (CAC 40).Outside of the above themes, a bottoms-up approach is required to uncover attractive and actionable stocks. On page 4 we include a table of all stocks highlighted in this report. 

Overweight Global Technology & Industrials

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<div><p>Last evening, <a href="https://www.smartkarma.com/entities/ngk-insulators-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:12580:1">Ngk Insulators (5333 JP)</a> announced a buyback for up to 7mm shares (around 2.2% of shares outstanding excluding Treasury shares) and up to ¥10 billion to be conducted between 1 November 2019 and 21 February 2020. The company also announced results where net sales and profits were down yoy and management lowered their revenue and profit forecasts for the full year.</p></div><div>
<p>We take a look at some of the details around the buyback and the impact of the previous buyback on the share price over the buyback period. From the earlier buyback we notice that management is price sensitive and will not chase the stock higher.</p>
<p>With the stock being a constituent in the Nikkei 225 Index, the buyback will increase future company EPS (and DPS) and could have a positive impact on the Nikkei 225 dividend futures market.</p>
</div>

Last evening, Ngk Insulators (5333 JP) announced a buyback for up to 7mm shares (around 2.2% of shares outstanding excluding Treasury shares) and up to ¥10 billion to be conducted between 1 November 2019 and 21 February 2020. The company also announced results where net sales and profits were down yoy and management lowered their revenue and profit forecasts for the full year.
We take a look at some of the details around the buyback and the impact of the previous buyback on the share price over the buyback period. From the earlier buyback we notice that management is price sensitive and will not chase the stock higher.
With the stock being a constituent in the Nikkei 225 Index, the buyback will increase future company EPS (and DPS) and could have a positive impact on the Nikkei 225 dividend futures market.


Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Thematic (Sector/Industry)

<p>Since 2013 when the % of Buy recommendation to total hit a recently low of 43%, that percentage has slowly been inching upward to the current level of 50%. Over the same time, the % of Sell recommendation has fallen to a 10-year low of 6%. That means that 44% of recommendations are Hold, but that is a different story.</p><h2>TOPIX - % of BUY Recommendations to Total</h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/049/241/original/4.png?1523310567" class="editor-image img-responsive" data-smartkarma-image-id="49241"></figure><p>As you can see from the chart above, the % of Buy recommendations bottomed out during the GFC and rebound up to 56% in 2010. Since 2012 the…</p>

Since 2013 when the % of Buy recommendation to total hit a recently low of 43%, that percentage has slowly been inching upward to the current level of 50%. Over the same time, the % of Sell recommendation has fallen to a 10-year low of 6%. That means that 44% of recommendations are Hold, but that is a different story.TOPIX - % of BUY Recommendations to TotalAs you can see from the chart above, the % of Buy recommendations bottomed out during the GFC and rebound up to 56% in 2010. Since 2012 the…

Half of Recommendations on TOPIX Companies Are BUY. Highest Since 2011....

<p>We looked back over the last 16 years and found that names that are down in the first 11 months tend to outperform in December. To calculate the information coefficient (IC) we only used names that were down in the first 11 months. That way we eliminate names that were up in the first 11 month and went down in December. We did not want those names to affect the IC calculations for this exercise.  </p><p>When we compared the first 11 month performance to December performance we got an average IC of…</p>

We looked back over the last 16 years and found that names that are down in the first 11 months tend to outperform in December. To calculate the information coefficient (IC) we only used names that were down in the first 11 months. That way we eliminate names that were up in the first 11 month and went down in December. We did not want those names to affect the IC calculations for this exercise.  When we compared the first 11 month performance to December performance we got an average IC of…

Names Down in the First 11 Months Tend to Go up in Japan.....

Japan

NGK Insulators, Ltd. manufactures and sells electrical insulators, industrial ceramic products, environmental systems, and electronic parts. The Company's products include ceramic catalyst carrier for exhaust gas purification, automotive honeycombs for exhaust filtering, gas analyzers, high pressure compaction systems, and sewer cleaning equipment.

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NGK Insulators (5333 JP)

Global Equities Headed Up and to the Right: Technology, Health Care Leading

Our weight of the evidence approach leads us to believe the market remains in the early stages of a broad-based advance, meaning a buy-the-dip...

Vermilion Research

Overweight Global Technology & Industrials

In this report we highlight attractive and actionable themes within developed int’l markets: Technology and Industrials continue to be two of the...

Vermilion Research

NGK Insulators - Conducting A Buyback

Last evening, Ngk Insulators (5333 JP) announced a buyback for up to 7mm shares (around 2.2% of shares outstanding excluding Treasury shares) and...

Brian Freitas

Half of Recommendations on TOPIX Companies Are BUY. Highest Since 2011....

Since 2013 when the % of Buy recommendation to total hit a recently low of 43%, that percentage has slowly been inching upward to the current level...

Custom Products Group

Names Down in the First 11 Months Tend to Go up in Japan.....

We looked back over the last 16 years and found that names that are down in the first 11 months tend to outperform in December. To calculate the...

Custom Products Group

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Market Cap (USDm)

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