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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>The MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EAFE (EFA-US), and EM (EEM-US) are all reversing topside their 2-month downtrends.</li>
<li>Despite this being a bullish short-term development, we still expect $93 to cap upside on the ACWI-US, leaving about 4-5% upside from here (at time of writing)</li>
<li>As a result, we would use any further strength as an opportunity to get more defensive. Actionable Themes: REA-AU, GFL-CA, GFL-US, Consumer Staples, Health Care, and Gold Miners</li>
</ul>


The MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EAFE (EFA-US), and EM (EEM-US) are all reversing topside their 2-month downtrends.
Despite this being a bullish short-term development, we still expect $93 to cap upside on the ACWI-US, leaving about 4-5% upside from here (at time of writing)
As a result, we would use any further strength as an opportunity to get more defensive. Actionable Themes: REA-AU, GFL-CA, GFL-US, Consumer Staples, Health Care, and Gold Miners


Shift To Defensives as $ACWI Makes Push for $93; Remain Overweight Europe; Opptys in China/HK, Japan

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Uni President Enterprises and President Chain Store Corp (an affiliate of Uni-President Group) have agreed to acquire a controlling 60% stake ownership of Carrefour Taiwan from Carrefour SA (CA FP).</li>
<li>We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216 TT).</li>
<li>Uni President Enterprises is trading at P/S multiple of 0.77x so the acquisition multiple of 0.6x would be slightly lower than Uni President Enterprises' current valuation multiple. </li>
</ul>


Uni President Enterprises and President Chain Store Corp (an affiliate of Uni-President Group) have agreed to acquire a controlling 60% stake ownership of Carrefour Taiwan from Carrefour SA (CA FP).
We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216 TT).
Uni President Enterprises is trading at P/S multiple of 0.77x so the acquisition multiple of 0.6x would be slightly lower than Uni President Enterprises' current valuation multiple. 


Uni President Enterprises: Positive Catalyst from Additional Stake Purchase of Carrefour Taiwan

<ul>
<li>Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).</li>
<li>The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.</li>
<li>Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors</li>
</ul>


Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).
The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.
Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors


Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

<ul>
<li>Since March we have consistently said we believe any bottoming process would likely take weeks or months and could come with more tests of the lows, or even an undercut.</li>
<li>We are testing the March lows now in several global indexes, including the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US).</li>
<li>While this is a logical spot for a bounce, we see rallies as selling opportunities at the index level</li>
</ul>


Since March we have consistently said we believe any bottoming process would likely take weeks or months and could come with more tests of the lows, or even an undercut.
We are testing the March lows now in several global indexes, including the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US).
While this is a logical spot for a bounce, we see rallies as selling opportunities at the index level


MSCI ACWI, ACWI Ex-US, EM Testing Logical Support; Actionable Themes: Defensives & Reopening Stocks

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Auchan, together with private equity, explores a possible €23.5/share offer for <a href="https://www.smartkarma.com/entities/carrefour-sa" target="_blank" data-smartkarma-citation="entities:21409:1" rel="noopener">Carrefour SA (CA FP)</a> (pro forma €105 billion revenues and 500,000 employees), after last October's attempt failed. Synergies should be sizeable. </li>
<li>On a simple LBO model, at year 5, the cumulative IRR would be 15.0%, and leverage would be 3.8x. Anti-trust and political hurdles are to be expected.</li>
<li>The creation of a French champion, should likely be favoured by French politicians. Recommendation is long CA FP, underpinned by a 22e 9.6% FCF yield, with potential offer upside.</li>
</ul>


Auchan, together with private equity, explores a possible €23.5/share offer for Carrefour SA (CA FP) (pro forma €105 billion revenues and 500,000 employees), after last October's attempt failed. Synergies should be sizeable. 
On a simple LBO model, at year 5, the cumulative IRR would be 15.0%, and leverage would be 3.8x. Anti-trust and political hurdles are to be expected.
The creation of a French champion, should likely be favoured by French politicians. Recommendation is long CA FP, underpinned by a 22e 9.6% FCF yield, with potential offer upside.


Auchan/Carrefour: Ongoing Merger Plans, LBO

France

Carrefour SA operates chains of supermarkets, hypermarkets, discount, cash and carry, and frozen food stores in Europe, the Americas, and Asia.

Carrefour SA (CA FP)

Shift To Defensives as $ACWI Makes Push for $93; Remain Overweight Europe; Opptys in China/HK, Japan

$ACWI, $ACWX, $EFA, and $EEM all reversing topside their 2-month downtrends. Despite this bullish short-term development, we still expect $93 to...

Vermilion Research

Uni President Enterprises: Positive Catalyst from Additional Stake Purchase of Carrefour Taiwan

We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216...

Douglas Kim

Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

Despite the intact downtrend on Japan's TOPIX, relative strength is reversing topside a 4.5-year downtrend; this tells us Japan is emerging as...

Vermilion Research

MSCI ACWI, ACWI Ex-US, EM Testing Logical Support; Actionable Themes: Defensives & Reopening Stocks

We are testing the March lows in several global indexes, including the MSCI $ACWI, ACWI ex-US $ACWX, and EM $EEM. While this is a logical spot for...

Vermilion Research

Auchan/Carrefour: Ongoing Merger Plans, LBO

The possibility of a new French champion, which would avoid falling in the hands of private equity. The LBO maths add up and synergies could be...

Jesus Rodriguez Aguilar