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

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

Positive news surrounding trade and dovish Fed rhetoric has continued to flow, resulting in a reversal from December's oversold extremes to our current, overbought extremes according to the S&amp;P 500’s percentage of stocks above their 50-day moving average (see chart below). We continue to believe the market is going through a bottoming process, and we prefer to be on the cautious side at current levels considering how far and how quickly the market has risen. In today’s report we highlight attractive stocks within Materials and Technology: large- and small-cap gold, silver, platinum, and optical equipment companies.

Positive news surrounding trade and dovish Fed rhetoric has continued to flow, resulting in a reversal from December's oversold extremes to our current, overbought extremes according to the S&amp;P 500’s percentage of stocks above their 50-day moving average (see chart below). We continue to believe the market is going through a bottoming process, and we prefer to be on the cautious side at current levels considering how far and how quickly the market has risen. In today’s report we highlight attractive stocks within Materials and Technology: large- and small-cap gold, silver, platinum, and optical equipment companies.

U.S. Equity Strategy: Nearing Short-Term Overbought Extremes

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

Wheaton Precious Metals  / Equity Bottom-Up

On 13 December, Wheaton Precious Metals (WPM) announced it had reached a ‘principled settlement’ for its tax dispute with the Canada Revenue Agency (CRA). Whereas the CRA had been seeking at least US$265m from WPM in taxes, penalties and interest in relation to its reassessment for the 2005–10 tax years with subsequent years left open to similar re-assessment, under the terms of the settlement WPM will actually pay the CRA cash taxes of US$5m for the 2011–17 tax years, US$15m in deferred tax and US$3–4m in interest. More importantly, the settlement creates a framework for both WPM and the CRA to assess tax in future years whereby foreign income on earnings generated by WPM’s international subsidiaries will not be subject to tax in Canada.

On 13 December, Wheaton Precious Metals (WPM) announced it had reached a ‘principled settlement’ for its tax dispute with the Canada Revenue Agency (CRA). Whereas the CRA had been seeking at least US$265m from WPM in taxes, penalties and interest in relation to its reassessment for the 2005–10 tax years with subsequent years left open to similar re-assessment, under the terms of the settlement WPM will actually pay the CRA cash taxes of US$5m for the 2011–17 tax years, US$15m in deferred tax and US$3–4m in interest. More importantly, the settlement creates a framework for both WPM and the CRA to assess tax in future years whereby foreign income on earnings generated by WPM’s international subsidiaries will not be subject to tax in Canada. 

Wheaton Precious Metals  - CRAziness averted

Wheaton Precious Metals / Equity Bottom-Up

Wheaton Precious Metals’ (WPM) silver streams outperformed our expectations in Q118, while its gold streams performed closely in line. However, after demonstrating the traditional ‘flush through’ effect in Q417, sales of silver and gold in Q118 reverted to close to their long-term trends, with an (albeit temporary) 14.6% under-sale of silver and a 12.2% under-sale of gold relative to production. Nevertheless, adjusted net earnings of US$69.9m and EPS of 16 cents were within 10% of our previous expectations of US$77.0m and our forecasts for FY18 remain, to all intents and purposes, unchanged (see page 7).

Wheaton Precious Metals’ (WPM) silver streams outperformed our expectations in Q118, while its gold streams performed closely in line. However, after demonstrating the traditional ‘flush through’ effect in Q417, sales of silver and gold in Q118 reverted to close to their long-term trends, with an (albeit temporary) 14.6% under-sale of silver and a 12.2% under-sale of gold relative to production. Nevertheless, adjusted net earnings of US$69.9m and EPS of 16 cents were within 10% of our previous expectations of US$77.0m and our forecasts for FY18 remain, to all intents and purposes, unchanged (see page 7).

FY17 results were characterised by a record level of gold sales and of dividend payouts to shareholders. Overall, production attributable to Wheaton Precious Metals (WPM) in FY17 was 28.6Moz Ag and 355koz Au cf guidance of 28Moz Ag and 340koz Au and our prior forecast of 28.5Moz Ag and 343koz Au. Results for Q4 were notable for the close correlation of production and sales, demonstrating the traditional ‘flush through’ effect in the final quarter of the year. Financial results were similarly better than our forecasts (see Exhibit 1, overleaf), partly on account of an increase in gold production compared to Q317, but also on account of a material increase in other income. Nevertheless, excluding this item, Q4 net earnings still exceeded our forecasts by 3.6%.

FY17 results were characterised by a record level of gold sales and of dividend payouts to shareholders. Overall, production attributable to Wheaton Precious Metals (WPM) in FY17 was 28.6Moz Ag and 355koz Au cf guidance of 28Moz Ag and 340koz Au and our prior forecast of 28.5Moz Ag and 343koz Au. Results for Q4 were notable for the close correlation of production and sales, demonstrating the traditional ‘flush through’ effect in the final quarter of the year. Financial results were similarly better than our forecasts (see Exhibit 1, overleaf), partly on account of an increase in gold production compared to Q317, but also on account of a material increase in other income. Nevertheless, excluding this item, Q4 net earnings still exceeded our forecasts by 3.6%.

United States

Wheaton Precious Metals Corp. operates as a precious metals streaming company. The Company purchases silver and gold production from mines that it does not owns and operates. Wheaton Precious Metals serves customers worldwide.

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Wheaton Precious Metals (WPM US)

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

U.S. Equity Strategy: Nearing Short-Term Overbought Extremes

Positive news surrounding trade and dovish Fed rhetoric has continued to flow, resulting in a reversal from December's oversold extremes to our...

Vermilion Research

Wheaton Precious Metals - CRAziness averted

On 13 December, Wheaton Precious Metals (WPM) announced it had reached a ‘principled settlement’ for its tax dispute with the Canada Revenue Agency...

Edison Investment Research

Wheaton Precious Metals - Serene start

Wheaton Precious Metals’ (WPM) silver streams outperformed our expectations in Q118, while its gold streams performed closely in line. However,...

Edison Investment Research

Wheaton Precious Metals - A fine finish

FY17 results were characterised by a record level of gold sales and of dividend payouts to shareholders. Overall, production attributable to...

Edison Investment Research

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