High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Thematic (Sector/Industry)

<ul><li>The past two weeks have been full of announcements by various companies in Europe’s industrial sector that they are either shutting down production or curtailing production due to spiraling energy costs. </li><li>This includes steel companies, fertilizer companies, aluminum foundries, and chemical companies which use natural gas in manufacturing to produce their end products. </li><li>This got me thinking these announcements may be just the next leg of continuing the theme started by Howard Mark’s memo (link below) of the “pendulum swing” whereby the inability to have cheap and stable energy prices will likely result in companies seeking alternative supply sources away from Europe.</li></ul>

The past two weeks have been full of announcements by various companies in Europe’s industrial sector that they are either shutting down production or curtailing production due to spiraling energy costs. This includes steel companies, fertilizer companies, aluminum foundries, and chemical companies which use natural gas in manufacturing to produce their end products. This got me thinking these announcements may be just the next leg of continuing the theme started by Howard Mark’s memo (link below) of the “pendulum swing” whereby the inability to have cheap and stable energy prices will likely result in companies seeking alternative supply sources away from Europe.

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Porsche Automobil Holding  / Event-Driven

<ul>
<li>Discounts to NAV of covered holdcos haven't shown a clear trend during July/beginning of August. Investors have favored Swedish hodlcos, disliked GBL's results and avoided the Heineken/Heineken Holdings trade.</li>
<li>Discounts to NAV: Alba, 42.8%; GBL, 34.5%; Heineken Holdings to 21.5%; Industrivärden C, 7.8%; Investor B, 14.3%; Porsche Automobile Holding to 29.4%. Rio Tinto DLC tightened to 16.2%.</li>
<li>Spreads tend to widen in bear markets but short term recoveries provide opportunities on tightening discounts. If anything, recommended trades are: Industrivärden C vs. listed assets, Porsche, Rio Tinto (DLC).</li>
</ul>


Discounts to NAV of covered holdcos haven't shown a clear trend during July/beginning of August. Investors have favored Swedish hodlcos, disliked GBL's results and avoided the Heineken/Heineken Holdings trade.
Discounts to NAV: Alba, 42.8%; GBL, 34.5%; Heineken Holdings to 21.5%; Industrivärden C, 7.8%; Investor B, 14.3%; Porsche Automobile Holding to 29.4%. Rio Tinto DLC tightened to 16.2%.
Spreads tend to widen in bear markets but short term recoveries provide opportunities on tightening discounts. If anything, recommended trades are: Industrivärden C vs. listed assets, Porsche, Rio Tinto (DLC).


Selected European Holdcos and DLCs: July ‘22 Report

<ul>
<li>Discounts to NAV of covered holdcos have either remained within same levels or widened during June: Alba, 40.3%; GBL, 34.7%; Heineken Holdings to 20.9%; Industrivärden C, 13.8%; Investor B, 15.6%; </li>
<li>Porsche Automobile Holding to 35.3%. Rio Tinto DLC widened to 23.4%.  Spreads tend to widen in bear markets but short term recoveries provide opportunities to bet on tightening discounts.</li>
<li>Recommended trades: Industrivärden C vs. listed assets, Rio Tinto (DLC).</li>
</ul>


Discounts to NAV of covered holdcos have either remained within same levels or widened during June: Alba, 40.3%; GBL, 34.7%; Heineken Holdings to 20.9%; Industrivärden C, 13.8%; Investor B, 15.6%; 
Porsche Automobile Holding to 35.3%. Rio Tinto DLC widened to 23.4%.  Spreads tend to widen in bear markets but short term recoveries provide opportunities to bet on tightening discounts.
Recommended trades: Industrivärden C vs. listed assets, Rio Tinto (DLC).


Selected European Holdcos and DLCs: June ‘22 Report

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

Shanghai Stock Exchange Composite Index / Technical Analysis

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

MSCI Emerging Markets Index / Technical Analysis

As we highlighted in last week’s Int’l Compass, the weight of the evidence suggests commodities are in the early stages of a new secular bull market. Global Materials remains a favorite Sector overweight and we believe outperformance is likely to continue considering the Sector’s long-term bullish RS reversal. Additionally, we are upgrading equal-weighted Energy to overweight due to bullish price and RS inflections -- add exposure with a focus on small- and mid-caps.

As we highlighted in last week’s Int’l Compass, the weight of the evidence suggests commodities are in the early stages of a new secular bull market. Global Materials remains a favorite Sector overweight and we believe outperformance is likely to continue considering the Sector’s long-term bullish RS reversal. Additionally, we are upgrading equal-weighted Energy to overweight due to bullish price and RS inflections -- add exposure with a focus on small- and mid-caps.

Global Commodity-Related Equity Sectors In Secular Bull

Luxembourg

APERAM manufactures specialty steel. The Company produces stainless and grain-oriented and non grain-oriented electrical steel and nickel alloys. APERAM markets its products in Brazil, France, and Belgium.

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APERAM SA (APAM NA)

Weekly Stock Bullfinder - Week of 8/29

The past two weeks have been full of announcements by various companies in Europe’s industrial sector that they are either shutting down production...

Weekly Stock Bull Finder

Selected European Holdcos and DLCs: July ‘22 Report

Discounts to NAV of covered holdcos haven't shown a clear trend during July/beg. of August. Investors have favored Swedish hodlcos, disliked GBL's...

Jesus Rodriguez Aguilar

Selected European Holdcos and DLCs: June ‘22 Report

Discounts to NAV of covered holdcos have either remained within same levels or widened during June. Spreads tend to widen in bear markets, it pays...

Jesus Rodriguez Aguilar

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

Cracks are beginning to show, particularly in EM/China. Key support violations include the MSCI EM index below $52, the Shanghai Comp below 3500,...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Weekly Stock Bullfinder - Week of 8/29

The past two weeks have been full of announcements by various companies in Europe’s industrial sector that they are either shutting down production...

Weekly Stock Bull Finder

Selected European Holdcos and DLCs: July ‘22 Report

Discounts to NAV of covered holdcos haven't shown a clear trend during July/beg. of August. Investors have favored Swedish hodlcos, disliked GBL's...

Jesus Rodriguez Aguilar

Selected European Holdcos and DLCs: June ‘22 Report

Discounts to NAV of covered holdcos have either remained within same levels or widened during June. Spreads tend to widen in bear markets, it pays...

Jesus Rodriguez Aguilar

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

Cracks are beginning to show, particularly in EM/China. Key support violations include the MSCI EM index below $52, the Shanghai Comp below 3500,...

Vermilion Research

Global Commodity-Related Equity Sectors In Secular Bull

We believe commodities are in the early stages of a new secular bull market. Global Materials & Energy remain our favorite Sector overweights - add...

Vermilion Research