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

<ul>
<li>Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).</li>
<li>The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.</li>
<li>Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors</li>
</ul>


Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).
The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.
Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors


Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The IFA supported the demerger by stating that “<em>in the absence of a fully priced takeover offer from a third party, the demerger is the most attractive course of action.</em>”</li>
<li>IFA concedes that “<em>it is not possible to form a definitive view</em>” if the demerger will generate higher shareholder returns. The report is light on qualitative analysis. </li>
<li>Mike Cannon-Brookes continues to gain retail support for a NO vote at <a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a>'s 15 June scheme meeting. Our SoTP points to upside absent a demerger.</li>
</ul>


The IFA supported the demerger by stating that “in the absence of a fully priced takeover offer from a third party, the demerger is the most attractive course of action.”
IFA concedes that “it is not possible to form a definitive view” if the demerger will generate higher shareholder returns. The report is light on qualitative analysis. 
Mike Cannon-Brookes continues to gain retail support for a NO vote at AGL Energy Ltd (AGL AU)'s 15 June scheme meeting. Our SoTP points to upside absent a demerger.


AGL Energy’s Demerger Booklet Provides an Underwhelming Justification

<ul>
<li>Mike Cannon-Brookes (Grok Ventures) has become the largest <a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a> shareholder, by acquiring an 11.28% interest through derivatives transactions. </li>
<li>Mr Cannon-Brookes will vote against the demerger scheme (vote on 15 June) and has launched an <a href="https://www.keepittogetheraustralia.com.au/" target="_blank" rel="noopener">online campaign</a> to influence the retail heavy share register.</li>
<li>The rationale for the demerger remains unconvincing. Our SoTP points to upside absent a demerger. If the demerger fails, the long-term play could still be to revisit the privatisation plan.</li>
</ul>


Mike Cannon-Brookes (Grok Ventures) has become the largest AGL Energy Ltd (AGL AU) shareholder, by acquiring an 11.28% interest through derivatives transactions. 
Mr Cannon-Brookes will vote against the demerger scheme (vote on 15 June) and has launched an online campaign to influence the retail heavy share register.
The rationale for the demerger remains unconvincing. Our SoTP points to upside absent a demerger. If the demerger fails, the long-term play could still be to revisit the privatisation plan.


AGL Energy’s Demerger Vote in the Balance with Grok Ventures’ Move

<ul>
<li>Since March we have consistently said we believe any bottoming process would likely take weeks or months and could come with more tests of the lows, or even an undercut.</li>
<li>We are testing the March lows now in several global indexes, including the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US).</li>
<li>While this is a logical spot for a bounce, we see rallies as selling opportunities at the index level</li>
</ul>


Since March we have consistently said we believe any bottoming process would likely take weeks or months and could come with more tests of the lows, or even an undercut.
We are testing the March lows now in several global indexes, including the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US).
While this is a logical spot for a bounce, we see rallies as selling opportunities at the index level


MSCI ACWI, ACWI Ex-US, EM Testing Logical Support; Actionable Themes: Defensives & Reopening Stocks

<ul>
<li>
<a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a> has rejected the Brookfield consortium’s bid of A$7.50 cash per share largely due to the mediocre 4.7% premium to the undisturbed price.  </li>
<li>The Brookfield consortium strategy seems to nudge shareholders to force the Board to engage to seek better terms and increase the uncertainty on the scheme vote on the demerger. </li>
<li>At last close, the shares are trading 5% above the terms suggesting a higher bid. A takeout price of A$9 is entirely possible. </li>
</ul>



AGL Energy Ltd (AGL AU) has rejected the Brookfield consortium’s bid of A$7.50 cash per share largely due to the mediocre 4.7% premium to the undisturbed price.  
The Brookfield consortium strategy seems to nudge shareholders to force the Board to engage to seek better terms and increase the uncertainty on the scheme vote on the demerger. 
At last close, the shares are trading 5% above the terms suggesting a higher bid. A takeout price of A$9 is entirely possible. 


AGL Energy in Brookfield and Grok Ventures’ Crosshairs

Australia

Origin Energy Limited is an integrated energy company. The Company is an energy retailer in Australia across electricity, gas and LPG. Origin Energy also holds a generation portfolio and fuel position and a renewable energy portfolio, as well as unconventional gas and LNG interests.

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Origin Energy (ORG AU)

Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

Despite the intact downtrend on Japan's TOPIX, relative strength is reversing topside a 4.5-year downtrend; this tells us Japan is emerging as...

Vermilion Research

AGL Energy’s Demerger Booklet Provides an Underwhelming Justification

While the IFA supports the demerger, the report is light on qualitative analysis. Mike Cannon-Brookes continues to gain retail support for a NO...

Arun George

AGL Energy’s Demerger Vote in the Balance with Grok Ventures’ Move

Mr Cannon-Brookes (11.28% stake) will vote against the demerger scheme on 15 June. The rationale for the demerger remains unconvincing. Our SoTP...

Arun George

MSCI ACWI, ACWI Ex-US, EM Testing Logical Support; Actionable Themes: Defensives & Reopening Stocks

We are testing the March lows in several global indexes, including the MSCI $ACWI, ACWI ex-US $ACWX, and EM $EEM. While this is a logical spot for...

Vermilion Research

AGL Energy in Brookfield and Grok Ventures’ Crosshairs

The Brookfield consortium clearly knew that a near no-premium bid would be rejected. The strategy seems to nudge the Board to seek better terms and...

Arun George

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