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>Since early November 2023 we have laid out our bullish expectations for a year-end rally that we anticipated would continue into the early part of 2024. </li>
<li>Here we are in the early part of 2024, and we see every reason to continue riding this bull market higher. We see small- and mid-caps resuming uptrends $IWM $VXF</li>
<li>Downgrading Staples (XLP) to underweight after brief stint at market weight. Highlighting several buys within Financials: Property &amp; Casualty Insurance BRK.B, PGR, CB, TRV, ALL, CINF, ERIE, and more</li>
</ul>


Since early November 2023 we have laid out our bullish expectations for a year-end rally that we anticipated would continue into the early part of 2024. 
Here we are in the early part of 2024, and we see every reason to continue riding this bull market higher. We see small- and mid-caps resuming uptrends $IWM $VXF
Downgrading Staples (XLP) to underweight after brief stint at market weight. Highlighting several buys within Financials: Property &amp; Casualty Insurance BRK.B, PGR, CB, TRV, ALL, CINF, ERIE, and more


Continue Riding This Bull Market Higher; Small- And Mid-Caps Resuming Uptrends; Downgrading Staples

We aggregate key quotes from earnings, The Transcript

The Transcript

We aggregate key quotes from earnings

Aggregate Key Quotes from Earnings

Thematic (Sector/Industry)

The economy is booming and everyone should enjoy it. The American economy is benefitting from tremendous amounts of pent-up demand and in some of the hardest-hit industries' activity is beginning to tick back up above 2019 levels. Along with that boom, there are clear signs of inflation and concerns about overheating. Even Janet Yellen seemed concerned for a few hours last week.

The economy is booming and everyone should enjoy it. The American economy is benefitting from tremendous amounts of pent-up demand and in some of the hardest-hit industries' activity is beginning to tick back up above 2019 levels. Along with that boom, there are clear signs of inflation and concerns about overheating. Even Janet Yellen seemed concerned for a few hours last week.

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.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/anjuke" target="_blank" data-smartkarma-citation="entities:33003:1" rel="noopener">Anjuke (ANJ HK)</a> is the largest online marketing platform for new and existing properties by revenue in 2020, according to iResearch. Anjuke is a subsidiary of 58.com. Anjuke’s shareholders include <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> (14.3% stake), General Atlantic (7.7%), Warburg Pincus (7.9%), <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a> and <a href="https://www.smartkarma.com/entities/agile-property-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15784:1" rel="noopener">Agile Property Holdings (3383 HK)</a>. It is seeking to raise $1 billion through an HKEx IPO, according to press reports.Anjuke is using its core online marketing services business, which is cash generative, to fund its foray into transaction services, a market where <a href="https://www.smartkarma.com/entities/ke-holdings-inc" target="_blank" data-smartkarma-citation="entities:29213:1" rel="noopener">KE Holdings Inc (BEKE US)</a> dominates. However, this growth is margin dilutive as transaction services is structurally a lower margin business. We think that the compromise is acceptable as investors continue to be willing to pay up for high-growth tech companies. <div class="content-highlight">The key negative is that Anjuke is saddled with debt related to the privatisation of 58.com in September 2020 - <a href="https://www.smartkarma.com/insights/58-com-s-privatisation-enters-into-definitive-agreement" target="_blank" data-smartkarma-citation="insights:40366" rel="noopener">58.com’s Privatisation Enters into Definitive Agreement</a>. While the healthy cash generation should comfortably service the debt, potential IPO investors could be turned off by the view that the IPO is a way of the privatisation consortium (which arguably privatised 58.com to the detriment of minorities) to make a quick buck. Notwithstanding the optics of the privatisation and relisting trade which tend to enrich insiders at the expense of minorities, we believe that the Anjuke IPO is worth a close look.</div>

Anjuke (ANJ HK) is the largest online marketing platform for new and existing properties by revenue in 2020, according to iResearch. Anjuke is a subsidiary of 58.com. Anjuke’s shareholders include Tencent Holdings (700 HK) (14.3% stake), General Atlantic (7.7%), Warburg Pincus (7.9%), Country Garden Holdings Co (2007 HK) and Agile Property Holdings (3383 HK). It is seeking to raise $1 billion through an HKEx IPO, according to press reports.Anjuke is using its core online marketing services business, which is cash generative, to fund its foray into transaction services, a market where KE Holdings Inc (BEKE US) dominates. However, this growth is margin dilutive as transaction services is structurally a lower margin business. We think that the compromise is acceptable as investors continue to be willing to pay up for high-growth tech companies. The key negative is that Anjuke is saddled with debt related to the privatisation of 58.com in September 2020 - 58.com’s Privatisation Enters into Definitive Agreement. While the healthy cash generation should comfortably service the debt, potential IPO investors could be turned off by the view that the IPO is a way of the privatisation consortium (which arguably privatised 58.com to the detriment of minorities) to make a quick buck. Notwithstanding the optics of the privatisation and relisting trade which tend to enrich insiders at the expense of minorities, we believe that the Anjuke IPO is worth a close look.

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

In this report, we dig into the Vision Fund portfolio to see which investments drive what looks to be a ~¥1,000bn operating loss for Q4. We have a fairly good idea that Didi Chuxing drives one-quarter of that, whilst an impairment at Grab is also likely. Beyond that, we believe ride hailing and selected eCommerce (Ola Cabs, Guazi are the largest), struggling start-ups (Oyo Hotels and CloudMinds lead this group) and bankruptcies (Brandless for sure but possibly Zume, Opendoor, Getaround and Fair) can account for most of the downside. We expect that Covid-19 is going to feature strongly when results are presented but many of these companies were hurting before the impact of the pandemic became clear and it is possible that further impairments are still to come. Softbank share have recently outperformed in the bear market rally and (probably) share repurchases but we would be cautious.

In this report, we dig into the Vision Fund portfolio to see which investments drive what looks to be a ~¥1,000bn operating loss for Q4. We have a fairly good idea that Didi Chuxing drives one-quarter of that, whilst an impairment at Grab is also likely. Beyond that, we believe ride hailing and selected eCommerce (Ola Cabs, Guazi are the largest), struggling start-ups (Oyo Hotels and CloudMinds lead this group) and bankruptcies (Brandless for sure but possibly Zume, Opendoor, Getaround and Fair) can account for most of the downside. We expect that Covid-19 is going to feature strongly when results are presented but many of these companies were hurting before the impact of the pandemic became clear and it is possible that further impairments are still to come. Softbank share have recently outperformed in the bear market rally and (probably) share repurchases but we would be cautious.

Softbank Group: Deep Dive into Vision Fund's $10bn in Expected Valuation Losses for This Quarter

We continue to move increasingly toward the bullish camp and we believe equities are poised for higher prices moving forward. In today’s report we outline our bullish case and highlight attractive Groups and stocks within Financials, Services, Technology and Manufacturing: Credit Card Issuers, Education Services, China, Solar Energy, and Industrial Rental Equipment.

We continue to move increasingly toward the bullish camp and we believe equities are poised for higher prices moving forward. In today’s report we outline our bullish case and highlight attractive Groups and stocks within Financials, Services, Technology and Manufacturing: Credit Card Issuers, Education Services, China, Solar Energy, and Industrial Rental Equipment.

U.S. Equity Strategy: Upgrading Cap-Weighted Communications to Overweight

United States

Redfin Corporation offers real estate services. The Company provides web based real estate database and brokerage services for residential buildings. Redfin serves customers in the United States.

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Redfin Corp (RDFN US)

Continue Riding This Bull Market Higher; Small- And Mid-Caps Resuming Uptrends; Downgrading Staples

Continue Riding This Bull Market Higher; Small- and Mid-Caps Resuming Uptrends $IWM $RTY $VXF; Downgrading Consumer Staples $XLP to Underweight...

Vermilion Research

The Transcript 05.10.21: Pent-up Demand

The economy is booming and everyone should enjoy it. The American economy is benefitting from tremendous amounts of pent-up demand and in some of...

The Transcript

Anjuke IPO Initiation: Home Truths

Anjuke is seeking to raise $1 bn through an HKEx IPO. Notwithstanding the optics of the privatisation and relisting trade, we believe that the...

Arun George

Softbank Group: Deep Dive into Vision Fund's $10bn in Expected Valuation Losses for This Quarter

In this report, we dig into the Vision Fund portfolio to see which investments drive what looks to be a ~¥1,000bn operating loss for Q4. We have a...

Kirk Boodry

U.S. Equity Strategy: Upgrading Cap-Weighted Communications to Overweight

We continue to move increasingly toward the bullish camp and we believe equities are poised for higher prices moving forward. In today’s report we...

Vermilion Research

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