European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>According to The Sunday Times, Philip Jansen is reportedly planning a takeover bid for <a href="https://www.smartkarma.com/entities/rentokil-initial-plc" target="_blank" data-smartkarma-citation="entities:22125:1" rel="noopener">Rentokil Initial (RTO LN)</a>, a FTSE 100 pest control company, with private equity backing.</li>
<li>Jansen plans to boost Rentokil’s US performance and enhance its integration with Terminix, with the potential to market consolidation. Closest comparable Rollins trades at 33.7x EV/NTM EBIT vs. Rentokil's 15.7x.</li>
<li>As a global leader in pest control and hygiene services, Rentokil boasts a strong market position and brand recognition. Rentokil will report its H1 results on 25 July. Long.</li>
</ul>


According to The Sunday Times, Philip Jansen is reportedly planning a takeover bid for Rentokil Initial (RTO LN), a FTSE 100 pest control company, with private equity backing.
Jansen plans to boost Rentokil’s US performance and enhance its integration with Terminix, with the potential to market consolidation. Closest comparable Rollins trades at 33.7x EV/NTM EBIT vs. Rentokil's 15.7x.
As a global leader in pest control and hygiene services, Rentokil boasts a strong market position and brand recognition. Rentokil will report its H1 results on 25 July. Long.


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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>The pullback in global equities continues with the MSCI ACWI (ACWI-US) testing 1.5-month downtrend resistance while the STOXX Europe 50 tests resistance at 3800-3840.</li>
<li>We expect a rejection at the 1.5-month downtrend and for the stair-step lower to continue, with our targets being $84 (December 2022 low) and potentially $75-77 (the 2022 lows).</li>
<li>If ACWI-US is able to reverse above the 1.5-month downtrend, we still expect $93 to cap upside in 2023. Remain overweight Europe. Also highlighting individual stock buys on pullbacks.</li>
</ul>


The pullback in global equities continues with the MSCI ACWI (ACWI-US) testing 1.5-month downtrend resistance while the STOXX Europe 50 tests resistance at 3800-3840.
We expect a rejection at the 1.5-month downtrend and for the stair-step lower to continue, with our targets being $84 (December 2022 low) and potentially $75-77 (the 2022 lows).
If ACWI-US is able to reverse above the 1.5-month downtrend, we still expect $93 to cap upside in 2023. Remain overweight Europe. Also highlighting individual stock buys on pullbacks.


MSCI ACWI and EAFE Testing 1.5-Month Downtrends; Remain OW EU; Buys in Leading Sectors on Pullbacks

In last week's Int'l Compass (Sept. 2), we highlighted emerging markets (EEM-US, Shanghai Comp) and Japan (TOPIX, TOPIX Small) as areas of bullish interest, with short-term bullish inflections suggesting the tide was turning in favor of these markets. This remains the focus in today's report, and especially on Japan; bullish price inflections and breakouts have started to proliferate, which suggests this could be the start of a broad-based rally for Japan in the weeks and months ahead.

In last week's Int'l Compass (Sept. 2), we highlighted emerging markets (EEM-US, Shanghai Comp) and Japan (TOPIX, TOPIX Small) as areas of bullish interest, with short-term bullish inflections suggesting the tide was turning in favor of these markets. This remains the focus in today's report, and especially on Japan; bullish price inflections and breakouts have started to proliferate, which suggests this could be the start of a broad-based rally for Japan in the weeks and months ahead.

Buy Japan On This Breakout ; TOPIX Breaking Out To 21-Year Highs; Actionable Theme: Growth Sectors

MSCI Emerging Markets Index / Technical Analysis

Emerging markets (EEM-US) are breaking above major $46.30 resistance to hit highs not seen since June 2018. Additionally, RS on EEM-US is near 1-year highs -- a positive risk-on signal. Stocks doing business in China, India, Taiwan, and South Korea continue to be a major focus when it comes to individual stock recommendations.

Emerging markets (EEM-US) are breaking above major $46.30 resistance to hit highs not seen since June 2018. Additionally, RS on EEM-US is near 1-year highs -- a positive risk-on signal. Stocks doing business in China, India, Taiwan, and South Korea continue to be a major focus when it comes to individual stock recommendations.

The risk of a pullback remains very real, however at this point the weight of the evidence suggests a meaningful pullback is not imminent. We recap important technical levels across market as well as Actionable Themes within the Consumer Staples, Health Care, and Technology sectors.

The risk of a pullback remains very real, however at this point the weight of the evidence suggests a meaningful pullback is not imminent. We recap important technical levels across market as well as Actionable Themes within the Consumer Staples, Health Care, and Technology sectors.

United Kingdom

Babcock International Group plc offers support services to public sector institutions.  The Company offers facilities management, training, and support services to defense, rail transportation, marine, and other public sector organizations.  Babcock serves customers in Europe, Africa, and North America.

Serco Group plc provides outsourcing services to governments, international agencies, and corporations located throughout the world.  The Company manages facilities, projects, and information technology systems.  Serco runs scientific establishments, provides critical information to manage traffic, maintains buildings, and operates railways.

Mitie Group plc provides a variety of services to both owners and occupiers of commercial and industrial properties.  The Group divides its business into two areas, building services and support services.  Their building operations encompass air conditioning, industrial painting, and engineering services, while their support services include catering, cleaning, security, and waste services.

Johnson Service Group PLC, together with its subsidiaries, provides textile related services to businesses and consumers in the United Kingdom. It operates through two segments, Textile Rental and Drycleaning. The Textile Rental segment engages in the supply and laundering of work wear, roller towels, corporate apparel, dust mats, and linen for the hotel, catering, and hospitality markets; and sale of associated products. The Drycleaning segment provides retail and commercial dry cleaning, laundry and ironing, carpet and upholstery cleaning, wedding dress cleaning, and suede and leather cleaning services. The company is also involved in property activities. Johnson Service Group PLC was founded in 1780 and is based in Preston Brook, the United Kingdom.

PayPoint Plc is the national network for collecting payments 'over the counter'. The Company owns PayPoint outlets located in newsagents, convenience stores, supermarkets, and forecourts across the UK, and a wide range of payments can be made such as electricity, gas, water, local taxes, and cable bills.

Mears Group PLC is a social housing repairs and maintenance service provider to Local Authorities and Registered Social Landlords in the UK. The Company also operates in the UK Local Authorities' outsourced care market, providing personal care services to people in their own homes. Mears employs 15,000 people and provides services to more than 10% of the UK social housing stock.

Restore plc, together with its subsidiaries, operates as a support services company primarily in the United Kingdom. The company operates through two segments, Document Management and Relocation. The Document Management segment stores and retrieves hard copy documents stored in cardboard boxes; manages archive boxes of document files, magnetic data, films, and other materials for blue-chip organizations; and offers reorganization of customer documents, document restoration, and file-tracking services, as well as offers cloud storage that allows access to indexed records. This segment also provides shredding and recycling services; converts hard-copy documents into electronic data; and organizes and indexes the electronic versions of documents for location. The Relocation segment provides commercial relocation services, such as the physical movement of office furniture and other physical resources for customers that range from large corporates and local businesses to public sector bodies, such as health trusts, libraries, and universities; international moving services for senior managers; and IT relocations service to blue-chip organizations, which includes server and data center relocation, desktop IT and trading desk relocation, and furniture and IT asset audit and management. This segment also offers secure data destruction and hardware disposal services for computer equipment; on- and off-site destruction services, including recycling, refurbishment, and the resale of electronic items; and collection services for empty toner and printer cartridge recycling. Restore plc was incorporated in 2004 and is headquartered in London, the United Kingdom.

De La Rue plc group specializes in the supply of cash handling equipment and security products.  The Company produces approximately 150 national currencies, electric transaction solutions and identity systems.  Their various security items include stamps, vouchers, passports, travelers checks, drivers licenses and ATM mechanisms, as well as security papers, threads and tear tapes.

Blancco Technology Group plc provides aftermarket services primarily to equipment and device manufacturers, mobile network operators, retailers, insurance providers, and satellite and cable TV companies worldwide. The company operates through Depot Solutions, and Software and Advanced Solutions divisions. It offers technical repair, refurbishment, parts management, and logistics services for mobile, IT, home entertainment, and B2B infrastructure product vendors; in-field tester for set top boxes, and SmartChk applications suite for smartphones; and Digital Care product insurance and extended warranty services, as well as device buy-back and repair services. The company also provides data erasure management software that offers data erasure for electronic and magnetic storage media, including portable flash drives, mobile phone memory, solid state drives, networked storage, virtual drives, and cloud storage. It serves mobile communications, information technology, home entertainment, and industrial electronics sectors. The company was formerly known as Regenersis Plc and changed its name to Blancco Technology Group plc in April 2016. Blancco Technology Group plc was founded in 1979 and is headquartered in Alpharetta, Georgia.

Intertek Group plc offers product inspection services.  The Company tests textiles, toys, petroleum products, chemicals, electronic products, building materials, and agricultural products.  Intertek inspects and certifies products for safety to governments, exporters and importers, and certifies that import duties are declared and paid.

Brambles Limited is a global support services group which provides pallet and plastic container pooling services and information management services.

Clean Harbors, Inc. provides a variety of environmental remediation and industrial waste management services to customers in the United States and Puerto Rico.  The Company's services include treatment and disposal of hazardous and non-hazardous solid and liquid waste, surface remediation, groundwater restoration, waste packaging, as well as analytical testing and consulting.

Tetra Tech, Inc. provides specialized management consulting and technical services primarily in resource management, infrastructure, and communications. The Company's clients include a diverse base of public and private sector organizations.  Tetra Tech operates offices in the United States and internationally.

SECOM CO., LTD. provides comprehensive security services.  The Company provides on-line centralized security services, home security systems, and home medical services,

Toppan Printing Co., Ltd. is a printing company that provides commercial and publication printing services. The Company also prints securities paper, packaging products, and electronic related products such as photomasks and colorfilters. Toppan Printing also produces inks and operates a text book publication business.

DAI NIPPON PRINTING CO., LTD. offers printing services for commercial and industrial use.  The printing items include information media such as books, periodicals, and text books, wrapping paper and containers, stationeries, and advertising medium.  The Company provides design and production services as well.  Dai Nippon Printing also produces soft drinks including Coca Cola.

Edenred offers prepaid vouchers for products and services.  The Company's vouchers for restaurant meals, childcare, and other products and services are used to reward employees and loyal customers.

RB Global, Inc. provides a marketplace for insights, services, and transaction solutions for commercial assets and vehicles. The Company offers its customers end-to-end transaction solutions for used commercial and other durable assets through its omnichannel platform, which includes auctions, online marketplaces, listing services, and private brokerage services.

SECOM Co., Ltd. provides comprehensive security services. The Company provides on-line centralized security, home security systems, and home medical services, It also provides insurance businesses as well as real estate services.

Rentokil Initial plc provides fully integrated facilities management and essential support services to government and commercial sector organisations of all sizes across all business sectors. The Company provides services in pest control, hygiene, workwear, facilities and plants.

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Rentokil Initial (RTO LN)

Trapping the Royal Rat-Catcher

According to The Sunday Times, Philip Jansen is reportedly planning a takeover bid for Rentokil Initial (RTO LN), a FTSE 100 pest control company,...

Jesus Rodriguez Aguilar

MSCI ACWI and EAFE Testing 1.5-Month Downtrends; Remain OW EU; Buys in Leading Sectors on Pullbacks

Pullback in global equities continues with MSCI $ACWI testing 1.5-month downtrend resistance as $STOXX Europe 50 tests 3800-3840 resistance....

Vermilion Research

Buy Japan On This Breakout ; TOPIX Breaking Out To 21-Year Highs; Actionable Theme: Growth Sectors

Japan (TOPIX, TOPIX Small) was a big focus for us last week, and it remains the focus in today's report; this could be the start of a broad-based...

Vermilion Research

Emerging Markets Breaking Out

Emerging markets (EEM-US) are breaking above major $46.30 resistance to hit highs not seen since June 2018. Additionally, RS on EEM-US is near 1...

Vermilion Research

Battleground Spot For Global Equities

The risk of a pullback remains very real, however at this point the weight of the evidence suggests a meaningful pullback is not imminent. We recap...

Vermilion Research

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