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

With major indexes testing support last week, we highlighted that while we expect to see indexes firm up based on YTD trends, the potential for breakdowns was not far off. In today’s report we assess the damage and highlight key support levels.  We also highlight attractive Groups  and stocks within the Materials, Utilities, and Consumer Staples Sectors.

With major indexes testing support last week, we highlighted that while we expect to see indexes firm up based on YTD trends, the potential for breakdowns was not far off. In today’s report we assess the damage and highlight key support levels.  We also highlight attractive Groups  and stocks within the Materials, Utilities, and Consumer Staples Sectors.

Key Support Levels Being Tested for U.S. Indexes

Equity Analyst, LightStream Research

Chacko Jacob

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/6246" target="_blank" data-smartkarma-citation="entities:6246:1">Unicharm Corp (8113 JP)</a> is a Japanese consumer goods company that manufactures hygiene products for adults and infants. The company has a presence in 18 countries globally and is the market leader in Asia for baby and feminine products. Unicharm's overseas segment currently accounts for 60% of consolidated revenue and continues to buoy its growth story. In this report, we take a look at the Unicharm's operations and strategy in India and China specifically. We also look at the company's valuation which, at current levels, we think might have already priced in future growth and appears overvalued. The stock has already retreated 13% since touching the overbought line in September 2018 and could drop further.

Unicharm Corp (8113 JP) is a Japanese consumer goods company that manufactures hygiene products for adults and infants. The company has a presence in 18 countries globally and is the market leader in Asia for baby and feminine products. Unicharm's overseas segment currently accounts for 60% of consolidated revenue and continues to buoy its growth story. In this report, we take a look at the Unicharm's operations and strategy in India and China specifically. We also look at the company's valuation which, at current levels, we think might have already priced in future growth and appears overvalued. The stock has already retreated 13% since touching the overbought line in September 2018 and could drop further.

Unicharm (8113 JP): High Valuation Overshadows Steady Growth Story

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<a href="https://www.smartkarma.com/entities/231" target="_blank" data-smartkarma-citation="entities:231:1">Unilever Indonesia (UNVR IJ)</a> has long been dubbed as the proxy for the rising middle-class domestic consumption story in Indonesia and enjoyed a rich PE multiple despite less favorable externalities that could potentially reduce its margin; namely a weakening IDR, increasing competition, as well as changing consumer behavior. In this report, we will discuss the following:
<ul>
<li>Its Products and their performance</li>
<li>The Competitive Landscape</li>
<li>Premiumization and Innovation</li>
<li>Costs and Externalities</li>
<li>Changing Consumer Behavior</li>
<li>Valuation and the Investment Thesis</li>
</ul>

Unilever Indonesia (UNVR IJ) has long been dubbed as the proxy for the rising middle-class domestic consumption story in Indonesia and enjoyed a rich PE multiple despite less favorable externalities that could potentially reduce its margin; namely a weakening IDR, increasing competition, as well as changing consumer behavior. In this report, we will discuss the following:

Its Products and their performance
The Competitive Landscape
Premiumization and Innovation
Costs and Externalities
Changing Consumer Behavior
Valuation and the Investment Thesis


UNVR IJ: Stiff Competition to Reduce Unilever Indo's Lofty Valuation Premium

Director | Exposing Creative Accounting, Bucephalus Research Partnership

Robert Medd

Director | Exposing Creative Accounting

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

​Bucephalus Research Partnership:
- Is an independent fee-based research service
- Does not take proprietary positions, long or short
- Does not solicit business or fees from the corporates we review

Forensic Accounting

Vinda International / Forensic Accounting

In 2017, Vinda introduced a new compensation scheme that specifically targets share price performance. This appears to be part of Essity’s plan to improve returns across the group. Historically, management prioritised growth over margins and the stock underperformed. Changing the incentives should change the outcomes.Their overall Governance, Accounting risk and Peer performance score, 104, is unexceptional. We worry about their payables, leverage and the fixed margin related party contracts…

In 2017, Vinda introduced a new compensation scheme that specifically targets share price performance. This appears to be part of Essity’s plan to improve returns across the group. Historically, management prioritised growth over margins and the stock underperformed. Changing the incentives should change the outcomes.Their overall Governance, Accounting risk and Peer performance score, 104, is unexceptional. We worry about their payables, leverage and the fixed margin related party contracts…

Buy Vinda (3331 HK): New Incentives, Leverage & Margins - Target HK$25.2 (Up 80%+)

Hengan International Group / Forensic Accounting

We are concerned that Hengan’s governance leaves minorities vulnerable, their accounts create false confidence in credit quality; and that business performance is unsustainable.The overall Governance, Accounting risk and Performance score of 119 is not very bad, but the aggregate hides extreme scores for debt churn, margins and leverage.With limited revenue growth, the stock’s premium valuation relies on its high margins. If they prove to be unsustainable, investors could be in for a shock.…

We are concerned that Hengan’s governance leaves minorities vulnerable, their accounts create false confidence in credit quality; and that business performance is unsustainable.The overall Governance, Accounting risk and Performance score of 119 is not very bad, but the aggregate hides extreme scores for debt churn, margins and leverage.With limited revenue growth, the stock’s premium valuation relies on its high margins. If they prove to be unsustainable, investors could be in for a shock.…

Sell Hengan (1044 HK): Relationships, Churn & Margin Pressure. Target HK$38 (Down 50%)

United States

The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world. The Company provides products in the laundry and cleaning, paper, beauty care, food and beverage, and health care segments. Procter & Gamble products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, and neighborhood stores.

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Procter & Gamble Co (PG US)

Key Support Levels Being Tested for U.S. Indexes

With major indexes testing support last week, we highlighted that while we expect to see indexes firm up based on YTD trends, the potential for...

Vermilion Research

Unicharm (8113 JP): High Valuation Overshadows Steady Growth Story

Unicharm Corp (8113 JP) is a Japanese consumer goods company that manufactures hygiene products for adults and infants. The company has a presence...

Chacko Jacob

UNVR IJ: Stiff Competition to Reduce Unilever Indo's Lofty Valuation Premium

Unilever Indonesia (UNVR IJ) has long been dubbed as the proxy for the rising middle-class domestic consumption story in Indonesia and enjoyed a...

Henry Soediarko

Buy Vinda (3331 HK): New Incentives, Leverage & Margins - Target HK$25.2 (Up 80%+)

In 2017, Vinda introduced a new compensation scheme that specifically targets share price performance. This appears to be part of Essity’s plan to...

Bucephalus Research Partnership

Sell Hengan (1044 HK): Relationships, Churn & Margin Pressure. Target HK$38 (Down 50%)

We are concerned that Hengan’s governance leaves minorities vulnerable, their accounts create false confidence in credit quality; and that business...

Bucephalus Research Partnership

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