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

<div>Ongoing market dynamics remain largely positive and there continues to be an absence of major breakdowns across all Sectors and the major averages. As a result, we expect higher prices ahead and recommend adding exposure on pullbacks. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary and Health Care.</div>

Ongoing market dynamics remain largely positive and there continues to be an absence of major breakdowns across all Sectors and the major averages. As a result, we expect higher prices ahead and recommend adding exposure on pullbacks. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary and Health Care.

S&P 500, Russell 2000 Testing Short-Term Support

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

<p>E-commerce retailers have proliferated and gained share the last 10 years, and we don't foresee these pressures abating. In this light, we contend brick-and-mortar players will face headwinds related to pricing, brand differentiation, and traffic, particularly those operating in commodified categories (such as small kitchen appliances or bath towels). As such, we recently modified our profit outlook for players in the home furnishing and furniture industry, including <a href="https://www.smartkarma.com/entities/18231" target="_blank" data-smartkarma-citation="entities:18231:1">Bed Bath &amp; Beyond Inc (BBBY US)</a> , <a href="https://www.smartkarma.com/entities/9694" target="_blank" data-smartkarma-citation="entities:9694:1">Restoration Hardware Holdings Inc (RH US)</a> , and <a href="https://www.smartkarma.com/entities/11383" target="_blank" data-smartkarma-citation="entities:11383:1">Williams Sonoma Inc (WSM US)</a> .</p><p>However, we perceive the opportunities and challenges across the space as varied. Beyond playing in categories that are more challenging to penetrate online (knowledge on DIY projects is hard to replicate, and lumber is costly to ship), we think those best equipped to defend their competitive position are already investing in e-commerce as a means by which to protect their intangible asset moat source (including <a href="https://www.smartkarma.com/entities/8399" target="_blank" data-smartkarma-citation="entities:8399:1">Home Depot Inc (HD US)</a> and <a href="https://www.smartkarma.com/entities/4156" target="_blank" data-smartkarma-citation="entities:4156:1">Lowe's Cos Inc (LOW US)</a>). Further, some will hold their brand relevance, as e-commerce already composes an important part of the operating profile, which should sustain the brand intangible asset (such as Williams-Sonoma and <a href="https://www.smartkarma.com/entities/6092" target="_blank" data-smartkarma-citation="entities:6092:1">Wayfair Inc Class A (W US)</a>). Conversely, we maintain that despite efforts to amass a more sizable presence, some brick-and-mortar companies will remain uncompetitive in the e-commerce realm (Bed Bath &amp; Beyond, for example) given rising price transparency and discounting as well as the proliferation of firms catering to the space. In this context, we view narrow-moat Williams-Sonoma and wide-moat Lowe's as attractively valued, given their competitive positioning and opportunity sets.</p><p><em>Analyst: Jaime M. Katz, CFA</em></p>

E-commerce retailers have proliferated and gained share the last 10 years, and we don't foresee these pressures abating. In this light, we contend brick-and-mortar players will face headwinds related to pricing, brand differentiation, and traffic, particularly those operating in commodified categories (such as small kitchen appliances or bath towels). As such, we recently modified our profit outlook for players in the home furnishing and furniture industry, including Bed Bath &amp; Beyond Inc (BBBY US) , Restoration Hardware Holdings Inc (RH US) , and Williams Sonoma Inc (WSM US) .However, we perceive the opportunities and challenges across the space as varied. Beyond playing in categories that are more challenging to penetrate online (knowledge on DIY projects is hard to replicate, and lumber is costly to ship), we think those best equipped to defend their competitive position are already investing in e-commerce as a means by which to protect their intangible asset moat source (including Home Depot Inc (HD US) and Lowe's Cos Inc (LOW US)). Further, some will hold their brand relevance, as e-commerce already composes an important part of the operating profile, which should sustain the brand intangible asset (such as Williams-Sonoma and Wayfair Inc Class A (W US)). Conversely, we maintain that despite efforts to amass a more sizable presence, some brick-and-mortar companies will remain uncompetitive in the e-commerce realm (Bed Bath &amp; Beyond, for example) given rising price transparency and discounting as well as the proliferation of firms catering to the space. In this context, we view narrow-moat Williams-Sonoma and wide-moat Lowe's as attractively valued, given their competitive positioning and opportunity sets.Analyst: Jaime M. Katz, CFA

Brick-And-Mortar Retailers Continue to Cede Share to Online Peers, but Not All Players Created Equal

United States

RH distributes home furnishing products. The Company offers products such as furniture, lighting, textiles, bathware, decor, outdoor, and garden, as well as baby and child products. RH distributes its products through retail stores, catalogs, and websites.

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RH (RH US)

S&P 500, Russell 2000 Testing Short-Term Support

Ongoing market dynamics remain largely positive across all Sectors and the major averages. As a result, we expect higher prices ahead and recommend...

Vermilion Research

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52-week Range

Market Cap (USDm)

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S&P 500, Russell 2000 Testing Short-Term Support

Ongoing market dynamics remain largely positive across all Sectors and the major averages. As a result, we expect higher prices ahead and recommend...

Vermilion Research

Brick-And-Mortar Retailers Continue to Cede Share to Online Peers, but Not All Players Created Equal

E-commerce retailers have proliferated and gained share the last 10 years, and we don't foresee these pressures abating. In this light, we contend...

Morningstar, Inc.