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

Taiwan Semiconductor (TSMC) / Technical Analysis

<ul>
<li>Global equities (MSCI ACWI) continue to hold above $93 on ACWI-US, a level that, since January, we had anticipated would cap upside in 2023. </li>
<li>While ACWI-US remains below $96-$97 (a target we discussed was possible in our April 18, 2023 Int’l Macro Vision), we could easily see $93 act as support moving forward.</li>
<li>Therefore, we are bullish on global equities as long as ACWI-US is above $93, targeting $110.29. This is the measured move price target following the inverse head-and-shoulders breakout.</li>
</ul>


Global equities (MSCI ACWI) continue to hold above $93 on ACWI-US, a level that, since January, we had anticipated would cap upside in 2023. 
While ACWI-US remains below $96-$97 (a target we discussed was possible in our April 18, 2023 Int’l Macro Vision), we could easily see $93 act as support moving forward.
Therefore, we are bullish on global equities as long as ACWI-US is above $93, targeting $110.29. This is the measured move price target following the inverse head-and-shoulders breakout.


MSCI ACWI-US Bullish Above $93; EURO STOXX 50 Holding At Uptrend; Buys in Discretionary, Tech, Svcs.

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.</li>
<li>We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.</li>
<li>We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.</li>
</ul>


Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.
We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.
We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.


Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Sega with better reputation and deeper pockets than Playtika, announces a €9.25/share recommended cash offer; 63% premium to Playtika's announcement; it represents 2.1x EV/Fwd Revenue, 12.3x EV/Fwd EBITDA, 21.6x Fwd P/E.</li>
<li>Acceptance condition is over 90%, and irrevocables are 49.1%, so 80.4% of the float is needed, which is high. I value Rovio using DCF (9% WACC, 1.5% perpetuity growth rate).</li>
<li>My fair value base case estimate is €8.80/share (€9.45/bull case). I thus update my TP to €9.25. Spread is 0.59%/1.22% (gross/annualised), which is not massive. </li>
</ul>


Sega with better reputation and deeper pockets than Playtika, announces a €9.25/share recommended cash offer; 63% premium to Playtika's announcement; it represents 2.1x EV/Fwd Revenue, 12.3x EV/Fwd EBITDA, 21.6x Fwd P/E.
Acceptance condition is over 90%, and irrevocables are 49.1%, so 80.4% of the float is needed, which is high. I value Rovio using DCF (9% WACC, 1.5% perpetuity growth rate).
My fair value base case estimate is €8.80/share (€9.45/bull case). I thus update my TP to €9.25. Spread is 0.59%/1.22% (gross/annualised), which is not massive. 


Sega Sammy Holdings/Rovio Entertainment: Agreed Offer

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dena-co-ltd" target="_blank" data-smartkarma-citation="entities:747:1" rel="noopener">DeNA (2432 JP)</a> announced in June a buyback programme to buy up to ¥15bn of stock over the next nine months. They are two-thirds the way through. </li>
<li>At current pace, they should finish by end-Jan or early Feb, then cancel 8mm shares, leading to a small TOPIX selldown <em>likely</em> in March or April. </li>
<li>The company remains cash and securities rich (net cash, after-tax value of securities, and equity affiliates are 100% of market cap). And growth lines will slowly claw their way positive.</li>
</ul>



DeNA (2432 JP) announced in June a buyback programme to buy up to ¥15bn of stock over the next nine months. They are two-thirds the way through. 
At current pace, they should finish by end-Jan or early Feb, then cancel 8mm shares, leading to a small TOPIX selldown likely in March or April. 
The company remains cash and securities rich (net cash, after-tax value of securities, and equity affiliates are 100% of market cap). And growth lines will slowly claw their way positive.


DeNA (2432) Buyback - Accretive on a Low Leverage Business Which Will Grow In Time

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Shinko Electric Industries / Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.</li>
<li>The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.</li>
<li>In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.</li>
</ul>


JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.
The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.
In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.


JPX-Nikkei 400 2022 Rebal: Final Predictions

Japan

SEGA SAMMY HOLDINGS INC. is a holding company established through the merger of Sega and Sammy.  The Group mainly develops and manufactures commercial-use video game machine, home-use video game software, and pachinko pinball machine. Sega Sammy Holdings also operates amusement parks.

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Sega Sammy Holdings (6460 JP)

MSCI ACWI-US Bullish Above $93; EURO STOXX 50 Holding At Uptrend; Buys in Discretionary, Tech, Svcs.

MSCI $ACWI Bullish Above $93, inverse head-and-shoulders breakout targets $110; EURO $STOXX 50 Holding At the Uptrend; Buys in Consumer...

Vermilion Research

Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Seeing broad-based improvement in India #SENSEX -- overweight/add exposure. We still recommend a tactical overweight to ACWI defensives with $ACWI...

Vermilion Research

Sega Sammy Holdings/Rovio Entertainment: Agreed Offer

Sega with better reputation and deeper pockets than Playtika, announces a €9.25/share recommended cash offer (€1.48/option); 63% premium to...

Jesus Rodriguez Aguilar

DeNA (2432) Buyback - Accretive on a Low Leverage Business Which Will Grow In Time

DeNA (2432) is a nice pot of assets with a small business attached. It should be better. It appears to be on its way to getting better. It is very...

Travis Lundy

JPX-Nikkei 400 2022 Rebal: Final Predictions

I have segmented the JPX Nikkei 400 Potential ADDs and DELs based on conviction levels. The high-conviction ADDs might outperform the high...

Janaghan Jeyakumar, CFA

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