Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

Equity Bottom-Up

INVESTMENT VIEW:  We believe <a href="https://www.smartkarma.com/entities/13" target="_blank" data-smartkarma-citation="entities:13:1">Rio Tinto Ltd (RIO AU)</a> shares are oversold versus <a href="https://www.smartkarma.com/entities/147" target="_blank" data-smartkarma-citation="entities:147:1">Bhp Billiton (BHP AU)</a> and recommend a pair trade: long Rio; short BHP.  Our analysis of each company’s earnings sensitivities to recent commodity price changes reveals much less contention to their earnings outlook than their share price changes since mid-June implies.  We look for Rio’s shares to regain 16% on a relative basis versus BHP into the next earning cycle.

INVESTMENT VIEW:   We believe Rio Tinto Ltd (RIO AU) shares are oversold versus Bhp Billiton (BHP AU) and recommend a pair trade: long Rio; short BHP.  Our analysis of each company’s earnings sensitivities to recent commodity price changes reveals much less contention to their earnings outlook than their share price changes since mid-June implies.  We look for Rio’s shares to regain 16% on a relative basis versus BHP into the next earning cycle. 

US$20bn in Lost Market Cap Looks Hard to Justify: Recommend Long Rio; Short BHP

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

We believe the secular mobile payments theme has room to run, and we expect related stocks to continue outperforming... see pages 2-4 for actionable stocks. We reiterate our overweight metals and mining.. see pages 5 and 9-12 for actionable stocks. Though lagging across many global markets, Utilities are particularly attractive in Europe and Japan... see pages 6 and 13-17 for actionable stocks.

We believe the secular mobile payments theme has room to run, and we expect related stocks to continue outperforming... see pages 2-4 for actionable stocks. We reiterate our overweight metals and mining.. see pages 5 and 9-12 for actionable stocks. Though lagging across many global markets, Utilities are particularly attractive in Europe and Japan... see pages 6 and 13-17 for actionable stocks.

Global Strategy: Opportunities Within Mobile Payments, Metals & Mining, and Utilities

<ul><li>Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past three months have stabilized at support, which we view as timely entry points that will lead to upside resumptions.  This report highlights actionable charts, sorted by market capitalization.</li></ul>

Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past three months have stabilized at support, which we view as timely entry points that will lead to upside resumptions.  This report highlights actionable charts, sorted by market capitalization.

Pullback Opportunities in Global Metals & Mining Stocks

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

LR Research

Thematic (Sector/Industry)

In today's issue:Off-balance sheet EU, TPP farce, Singles day bonanza, How Netflix works, hedge funds should be more conventional, eSports, peripheral Europe strength, Neural Networks for forecasting inflation, Latin Allocation, and Trump.<div class="content-highlight">1.  A TPP farce.  As we noted in 21 Things on Friday, the Canadian contingent had denied the comments from Shinzo Abe that a TPP agreement had been reached in principle.  According to sources, a side meeting at the APEC summit in Vietnam between Canada and…</div>

In today's issue:Off-balance sheet EU, TPP farce, Singles day bonanza, How Netflix works, hedge funds should be more conventional, eSports, peripheral Europe strength, Neural Networks for forecasting inflation, Latin Allocation, and Trump.1.  A TPP farce.  As we noted in 21 Things on Friday, the Canadian contingent had denied the comments from Shinzo Abe that a TPP agreement had been reached in principle.  According to sources, a side meeting at the APEC summit in Vietnam between Canada and…

Today’s report is a bottom-up compilation of technically attractive EAFE stocks, with one fundamental kicker: each name is accompanied by positive momentum in their FY EPS estimates.  While the list is broad-based, metals &amp; miners and energy-related names are most prevalent.

Today’s report is a bottom-up compilation of technically attractive EAFE stocks, with one fundamental kicker: each name is accompanied by positive momentum in their FY EPS estimates.  While the list is broad-based, metals &amp; miners and energy-related names are most prevalent.

Technically Attractive EAFE Stocks, with Positive EPS Momentum

United Kingdom

Rio Tinto plc is an international mining company. The Company has interests in mining for aluminum, borax, coal, copper, gold, iron ore, lead, silver, tin, uranium, zinc, titanium dioxide feedstock, diamonds, talc and zircon. Dually-listed company with RIO AU.

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Rio Tinto PLC (RIO LN)

Global Strategy: Opportunities Within Mobile Payments, Metals & Mining, and Utilities

We believe the secular mobile payments theme has room to run, and we expect related stocks to continue outperforming... see pages 2-4 for...

Vermilion Research

Pullback Opportunities in Global Metals & Mining Stocks

Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past...

Vermilion Research

21 Things Worth Knowing (#13)

In today's issue:Off-balance sheet EU, TPP farce, Singles day bonanza, How Netflix works, hedge funds should be more conventional, eSports,...

Mark Artherton

Technically Attractive EAFE Stocks, with Positive EPS Momentum

Today’s report is a bottom-up compilation of technically attractive EAFE stocks, with one fundamental kicker: each name is accompanied by positive...

Vermilion Research

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52-week Range

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US$20bn in Lost Market Cap Looks Hard to Justify: Recommend Long Rio; Short BHP

INVESTMENT VIEW: We believe Rio Tinto Ltd (RIO AU) shares are oversold versus Bhp Billiton (BHP AU) and recommend a pair trade: long Rio; short...

Charles Spencer

Global Strategy: Opportunities Within Mobile Payments, Metals & Mining, and Utilities

We believe the secular mobile payments theme has room to run, and we expect related stocks to continue outperforming... see pages 2-4 for...

Vermilion Research

Pullback Opportunities in Global Metals & Mining Stocks

Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past...

Vermilion Research

21 Things Worth Knowing (#13)

In today's issue:Off-balance sheet EU, TPP farce, Singles day bonanza, How Netflix works, hedge funds should be more conventional, eSports,...

Mark Artherton

Technically Attractive EAFE Stocks, with Positive EPS Momentum

Today’s report is a bottom-up compilation of technically attractive EAFE stocks, with one fundamental kicker: each name is accompanied by positive...

Vermilion Research