President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

Equity Bottom-Up

<ul>
<li>Has the Russia/Ukraine Conflict's Impact On Tire Retail Distribution and Manufacturing Been Priced In?</li>
<li>Have The Impact of Higher Raw Materials Costs Already Been Factored Into Margin Expectations?</li>
<li>Will Gasoline Prices Negatively Impact Miles Driven and Slow Replacement Cycles?</li>
</ul>


Has the Russia/Ukraine Conflict's Impact On Tire Retail Distribution and Manufacturing Been Priced In?
Have The Impact of Higher Raw Materials Costs Already Been Factored Into Margin Expectations?
Will Gasoline Prices Negatively Impact Miles Driven and Slow Replacement Cycles?


After Falling 50%+ in a Few Months Is Nokian Renkaat (TYRES FH) A "Buy" Or "Sell"?

For a company that already had problems generating positive mix/price prior to COVID, the sharp rebound in raw material prices may pressure margins more than estimates indicate.  The multiples applied to these estimates are above historical averages and peers, including the recent transaction between <a href="https://www.smartkarma.com/entities/goodyear-tire-rubber-co" target="_blank" data-smartkarma-citation="entities:17765:1" rel="noopener">Goodyear Tire &amp; Rubber Co (GT US)</a> and <a href="https://www.smartkarma.com/entities/cooper-tire-rubber" target="_blank" data-smartkarma-citation="entities:16681:1" rel="noopener">Cooper Tire &amp; Rubber (CTB US)</a> .  Tariffs, the RUB/EUR forex rate, and other items may also lead to further pressure on results and the share price.

For a company that already had problems generating positive mix/price prior to COVID, the sharp rebound in raw material prices may pressure margins more than estimates indicate.  The multiples applied to these estimates are above historical averages and peers, including the recent transaction between Goodyear Tire &amp; Rubber Co (GT US) and Cooper Tire &amp; Rubber (CTB US) .  Tariffs, the RUB/EUR forex rate, and other items may also lead to further pressure on results and the share price.

Nokian Renkaat (TYRES FH)- Tire Manufacturer Facing Multiple Headwinds

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 is higher for global equities. We see global equities as being in a goldilocks scenario where market dynamics and technicals are arguably 100% bullish. Of course, at some point this almost too good to be true scenario is likely to result in a pullback, but for now we see no signs of this rally letting up.  In our December International Strategy, we highlight areas of the market where we see actionable opportunities in Technology, Consumer Discretionary, Materials and Manufacturing.

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. We see global equities as being in a goldilocks scenario where market dynamics and technicals are arguably 100% bullish. Of course, at some point this almost too good to be true scenario is likely to result in a pullback, but for now we see no signs of this rally letting up.  In our December International Strategy, we highlight areas of the market where we see actionable opportunities in Technology, Consumer Discretionary, Materials and Manufacturing.

Global Equity Strategy: Bullish Outlook Intact

We continue to be encouraged by market dynamics that are supportive of an ongoing equity bull market. Additionally, there continues to be an absence of breakdowns on the major global indexes (MSCI ACWI, ACWI ex-US, EM, &amp; EAFE). As a result, our outlook remains bullish.  In this report we show some love to various Sectors that have not been big attention-grabbers for us in recent months, but still have plenty of attractive stocks. The stocks highlighted hail from a variety of countries. Sectors covered include Services, Communications, Staples, Financials, and Utilities.

We continue to be encouraged by market dynamics that are supportive of an ongoing equity bull market. Additionally, there continues to be an absence of breakdowns on the major global indexes (MSCI ACWI, ACWI ex-US, EM, &amp; EAFE). As a result, our outlook remains bullish.  In this report we show some love to various Sectors that have not been big attention-grabbers for us in recent months, but still have plenty of attractive stocks. The stocks highlighted hail from a variety of countries. Sectors covered include Services, Communications, Staples, Financials, and Utilities.

Global Equity Strategy: Market Dynamics Remain Positive, And So Are We

Global TMT, Consumer, Korea, Deep Fundamental

Julian Yoon

Hankook Tire & Technology / Equity Bottom-Up

Hankook Tire has the strongest growth profile amongst its global tire peers over the next few years from robust unit volume growth combined with a supportive pricing environment, driving a solid earnings trajectory which is further amplified by operating leverage and mix improvements.   Despite having industry leading margins, the company is trading at a P/B of just 1.4x, a 46% discount to its peers and trades at 20% discount on a forward P/E basis. In this second part on Hankook Tire, we will deep dive on the following: <ul><li>Value drivers</li><li>Catalysts</li><li>Valuation perspectives</li><li>Risks</li></ul>

Hankook Tire has the strongest growth profile amongst its global tire peers over the next few years from robust unit volume growth combined with a supportive pricing environment, driving a solid earnings trajectory which is further amplified by operating leverage and mix improvements.   Despite having industry leading margins, the company is trading at a P/B of just 1.4x, a 46% discount to its peers and trades at 20% discount on a forward P/E basis. In this second part on Hankook Tire, we will deep dive on the following: Value driversCatalystsValuation perspectivesRisks

The Cheapest and Most Profitable Tire Company in the World:  Catalysts and Valuation (Part 2 of 2)

Finland

Nokian Renkaat Oyj develops and manufactures premium tires for passenger cars and heavy machineries. The company primarily operates in the tire replacement market, and its products are sold in more than 60 countries worldwide. The Group also includes the Vianor chain, specialising in vehicle maintenance and tire services.

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Nokian Renkaat Oyj (TYRES FH)

After Falling 50%+ in a Few Months Is Nokian Renkaat (TYRES FH) A "Buy" Or "Sell"?

Nokian's massive exposure to the Russian/Ukraine conflict is creating short term volatility that may present a solid entry point for longer term...

Robert C Prather Jr

Nokian Renkaat (TYRES FH)- Tire Manufacturer Facing Multiple Headwinds

Rising input costs, likely new tariffs that may result in tires dumped in Europe, increasing accounting adjustments amid C-Suite changes & above...

Robert C Prather Jr

Global Equity Strategy: Bullish Outlook Intact

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. In this report, we...

Vermilion Research

Global Equity Strategy: Market Dynamics Remain Positive, And So Are We

We show some love to various Sectors that have not been big attention-grabbers for us in recent months, including Services, Communications,...

Vermilion Research

The Cheapest and Most Profitable Tire Company in the World: Catalysts and Valuation (Part 2 of 2)

Hankook Tire has the strongest growth profile amongst its global tire peers over the next few years from robust unit volume growth combined with a...

Julian Yoon

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