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

US Treasury (10 Yr Generic) / Technical Analysis

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

Ongoing market dynamics continue to support our overall bullish outlook. Continue to buy dips. In today’s report we highlight attractive Groups and stocks within Communications and Transportation: Broadcasting, Movies, Entertainment, Programming, Small-Cap, Publishing, Small-Cap, and Shipping, Dry-Bulk.

Ongoing market dynamics continue to support our overall bullish outlook. Continue to buy dips. In today’s report we highlight attractive Groups and stocks within Communications and Transportation: Broadcasting, Movies, Entertainment, Programming, Small-Cap, Publishing, Small-Cap, and Shipping, Dry-Bulk.

U.S. Equity Strategy: Upgrading Communications To Overweight; Financials Breaking Above 2007 Highs

Drewry Maritime Financial Research

Ishan Dafaria

Maritime Sector, Equity & Credit Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

Star Bulk dented shareholders’ wealth by over 34% YTD (as of 10 March 2020). Like many of its cape-dominated peers, the company has high exposure to China’s trade. At the end of trading on 7 February 2020, force majeure in China pushed SBLK to a low of USD 8.03 per share on NASDAQ – a price marginally above the USD 8.02 per share on 6 February 2019. On a positive note, the share price since then has largely been resilient, trading largely between USD 8 and USD 9, despite the falling BCI and Capesize earnings.

Star Bulk dented shareholders’ wealth by over 34% YTD (as of 10 March 2020). Like many of its cape-dominated peers, the company has high exposure to China’s trade. At the end of trading on 7 February 2020, force majeure in China pushed SBLK to a low of USD 8.03 per share on NASDAQ – a price marginally above the USD 8.02 per share on 6 February 2019. On a positive note, the share price since then has largely been resilient, trading largely between USD 8 and USD 9, despite the falling BCI and Capesize earnings.

Star Bulk (NASDAQ:SBLK): Higher Risk, Higher Upside – Time to Bottom Fish?

The S&amp;P 500 continues to move higher on narrow leadership, which is not inspiring a bullish outlook. Currently leading the S&amp;P 500 higher in terms of RS are Technology, Services, Facebook (FB), Amazon (AMZN), and Procter &amp; Gamble (PG). If this were a bull market, (1) PG would likely NOT be listed here as leadership, and (2) we would expect to see participation broaden out to Discretionary (RCD), Transportation (IYT), banks (KBE), Industrials (XLI), and small-caps (IWM). All of these areas are still consolidating below meaningful resistance, and we continue to believe upside is likely to be muted as long as this rings true.In today’s report we highlight attractive Groups and stocks within Transportation, Materials, and Services:

The S&amp;P 500 continues to move higher on narrow leadership, which is not inspiring a bullish outlook. Currently leading the S&amp;P 500 higher in terms of RS are Technology, Services, Facebook (FB), Amazon (AMZN), and Procter &amp; Gamble (PG). If this were a bull market, (1) PG would likely NOT be listed here as leadership, and (2) we would expect to see participation broaden out to Discretionary (RCD), Transportation (IYT), banks (KBE), Industrials (XLI), and small-caps (IWM). All of these areas are still consolidating below meaningful resistance, and we continue to believe upside is likely to be muted as long as this rings true.In today’s report we highlight attractive Groups and stocks within Transportation, Materials, and Services:

U.S. Equity Strategy: Semiconductors, Transportation Improving

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

<ul>
<li>Star Bulk recently declared its 4Q18 results and reported a net profit of USD 12.3m in 4Q18 and USD 59m for full-year 2018. The quarterly profit declined from USD 23.9m in 4Q17 due to the realisation of impairment loss of USD 17.8m in 4Q18.</li>
<li>In 2018, Star Bulk acquired 38 vessels through a combination of debt and equity.  After delivery of three newbuildings, the company will own and operate a fleet of 111 vessels versus 71 vessels at the end of 2017. The average age of the current fleet of 108 vessels is healthy at 8.4 years.</li>
<li>The company has booked 70% of the available days of the fleet in 1Q19 at an average TCE rate of USD 12,954pd.</li>
<li>The total indebtedness stood at USD 1.4bn and the cash balance stood at USD 204.9m at the end of 4Q18. Even after accounting for the new debt schedule, the net debt to market adjusted fleet value ratio is at a comfortable 46% for a company of this size.</li>
<li>We maintain our Attractive rating on Star Bulk’s common stock, but have downgraded the fair value of the share from USD 16.70 per share to USD 14 per share.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/080/679/original/SBLK_valuation%20overview.PNG?1551436458" class="editor-image img-responsive" data-smartkarma-image-id="80679"></figure><div class="content-caption">Valuation overview</div>Source: S&amp;P Capital IQ, Drewry


Star Bulk recently declared its 4Q18 results and reported a net profit of USD 12.3m in 4Q18 and USD 59m for full-year 2018. The quarterly profit declined from USD 23.9m in 4Q17 due to the realisation of impairment loss of USD 17.8m in 4Q18.
In 2018, Star Bulk acquired 38 vessels through a combination of debt and equity.  After delivery of three newbuildings, the company will own and operate a fleet of 111 vessels versus 71 vessels at the end of 2017. The average age of the current fleet of 108 vessels is healthy at 8.4 years.
The company has booked 70% of the available days of the fleet in 1Q19 at an average TCE rate of USD 12,954pd.
The total indebtedness stood at USD 1.4bn and the cash balance stood at USD 204.9m at the end of 4Q18. Even after accounting for the new debt schedule, the net debt to market adjusted fleet value ratio is at a comfortable 46% for a company of this size.
We maintain our Attractive rating on Star Bulk’s common stock, but have downgraded the fair value of the share from USD 16.70 per share to USD 14 per share.
Valuation overviewSource: S&amp;P Capital IQ, Drewry

Star Bulk Carriers (NasdaqGS:SBLK): Fleet Expansion to Yield Returns in 2019

United States

Star Bulk Carriers Corp. is a holding company, which engages in the marine transportation of dry bulk vessels. It ships iron ore, coal, grain, bauxite, fertilizers, and steel products. The company was founded by Petros Alexandros Pappas on December 13, 2006 and is headquartered in Athens, Greece.

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Star Bulk Carriers (SBLK US)

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an...

Vermilion Research

U.S. Equity Strategy: Upgrading Communications To Overweight; Financials Breaking Above 2007 Highs

Ongoing market dynamics continue to support our overall bullish outlook. Continue to buy dips. In today’s report we highlight attractive Groups and...

Vermilion Research

Star Bulk (NASDAQ:SBLK): Higher Risk, Higher Upside – Time to Bottom Fish?

Star Bulk dented shareholders’ wealth by over 34% YTD (as of 10 March 2020). Like many of its cape-dominated peers, the company has high exposure...

Drewry Maritime Financial Research

U.S. Equity Strategy: Semiconductors, Transportation Improving

The S&P 500 continues to move higher on narrow leadership, which is not inspiring a bullish outlook. Currently leading the S&P 500 higher...

Vermilion Research

Star Bulk Carriers (NasdaqGS:SBLK): Fleet Expansion to Yield Returns in 2019

Star Bulk recently declared its 4Q18 results and reported a net profit of USD 12.3m in 4Q18 and USD 59m for full-year 2018. The quarterly profit...

Drewry Maritime Financial Research

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