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

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

U.S. Equity Strategy: Markets Bouncing off Key Support

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

We must expect some degree of higher NPL formation at banks in Texas due to lower oil prices. But in the current environment that will be compounded with more traditional credit stresses from the shutdown; many Banks in Texas  have a high level of CRE loans. We look at how banks fare with recent credit growth, with the concern that some have grown incredibly fast into the downturn. While the Texas Ratio may be good at identifying which banks have more capital and provisions compared with impaired and loan loans, we feel it can also lag; credit growth can be a better lead indicator of future stresses.

We must expect some degree of higher NPL formation at banks in Texas due to lower oil prices. But in the current environment that will be compounded with more traditional credit stresses from the shutdown; many Banks in Texas  have a high level of CRE loans. We look at how banks fare with recent credit growth, with the concern that some have grown incredibly fast into the downturn. While the Texas Ratio may be good at identifying which banks have more capital and provisions compared with impaired and loan loans, we feel it can also lag; credit growth can be a better lead indicator of future stresses.

There is risk that banks will have to cancel, suspend or cut dividends. During a period of low-cost or free loans from governments and regulators to banks, it is difficult to envisage that regulators would sanction these very same banks to provide most of their earnings to shareholders. There are varying degrees of risk depending on payout ratios. Several banks around the world have reported dividend payout ratios at 70% or higher. There is more to lose at these banks, than others and this could be another source of concern, other than credit and liquidity risk. Australia’s banks seem to have all of these risks, in spades.

There is risk that banks will have to cancel, suspend or cut dividends. During a period of low-cost or free loans from governments and regulators to banks, it is difficult to envisage that regulators would sanction these very same banks to provide most of their earnings to shareholders. There are varying degrees of risk depending on payout ratios. Several banks around the world have reported dividend payout ratios at 70% or higher. There is more to lose at these banks, than others and this could be another source of concern, other than credit and liquidity risk. Australia’s banks seem to have all of these risks, in spades.

United States

Southside Bancshares, Inc. is a holding company for Southside Bank.  The Bank offers a full range of financial services to commercial, industrial, financial, and individual customers, including loans, equipment financing, real estate lending, trust services, and other services through offices in eastern Texas.

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Southside Bancshares (SBSI US)

U.S. Equity Strategy: Markets Bouncing off Key Support

In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican banks, Banks, Southwest, and Investment...

Vermilion Research

Texas Banks – Oversized Loan Growth

We must expect some degree of higher NPL formation at banks in Texas due to lower oil prices. But in the current environment that will be...

Daniel Tabbush

Global Banks – Dividend Risk

There is risk that banks will have to cancel, suspend or cut dividends. During a period of low-cost or free loans from governments and regulators...

Daniel Tabbush

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