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

Communication Services Select Sector SPDR Fund / Technical Analysis

Communication Services Select Sector SPDR Fund

<ul>
<li>In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.</li>
<li>We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.</li>
<li>After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.</li>
</ul>


In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.
We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.
After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.


Upgrading Communications, Downgrading Staples - Both to Market Weight; US Dollar Major Top

Research from Superfluous Value, Superfluous Value

Superfluous Value

Research from Superfluous Value

Stock selection has rarely been as important as it is today. After a roaring decade for US markets and with signs of mania everywhere, the S&P 500 as over-priced as it has ever been.

But, there is better way. Superfluous Value is a contrarian, deep-dive into the markets forgotten by the 60/40 instos and indexing, momentum chasers. Where the hot money has long moved on, it leaves behind investments offering great safety and prospective returns.

I believe the 2020s will look diametrically opposite to the recent past, with Emerging Markets, the UK, Japan and commodities set to rip and I intend to be holding the best opportunities available as they do.

Please feel free to come along on the journey.

Contrarian Deep-Dive into the Markets

Equity Bottom-Up

Liberty Latin America  / Equity Bottom-Up

<div data-attrs='{"url":"https://superfluousvalue.substack.com/subscribe?","text":"Subscribe"}'><div><form class="subscription-widget-subscribe"><ul><li><span style="font-size: var(--content-font-size);">LILAK has become a tragic joke among investors. During its 6-year public life, the share-price has tanked over 80% and all the way down, the faithful have been pitching it with bullet points like “Malone vehicle” and “leveraged buy-backs”.</span></li><li>While some of this was self-inflicted (the spin price was too high and the company overpaid for C&amp;W in a sweetheart deal), much of the pain was outside management’s control and only cyclical in nature.</li><li>Hurricane Maria destroying Puerto Rico, Covid 19 and relentless weakening in Emerging Market currencies and sentiment can hardly be laid at their feet.</li></ul></form></div></div>

LILAK has become a tragic joke among investors. During its 6-year public life, the share-price has tanked over 80% and all the way down, the faithful have been pitching it with bullet points like “Malone vehicle” and “leveraged buy-backs”.While some of this was self-inflicted (the spin price was too high and the company overpaid for C&amp;W in a sweetheart deal), much of the pain was outside management’s control and only cyclical in nature.Hurricane Maria destroying Puerto Rico, Covid 19 and relentless weakening in Emerging Market currencies and sentiment can hardly be laid at their feet.

Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

<p><a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> is a broadband and cable TV provider in Indonesia. It is undervalued under all scenarios with 54% upside to the 2021 fair value per share in bear case and 143% upside to the 2021 fair valuer per share in the base case.</p><p>The company recently embarked on a new subscriber growth strategy, which so far has been successful. Over the past two quarters, Link Net added an average of 58,154 new subscribers per quarter. Over the previous five years, the average quarterly rate of new subscribers was 12,232. ARPU fell with the subscriber growth, but it seems to be stabilizing.</p><p>In addition to the new subscriber growth strategy, the company is an efficient operator with a five-year average ROIC of 24%. It also regularly buys back shares when it thinks the company is undervalued. Since IPO in 2014, 9.6% of shares issued have been repurchased with most being canceled.</p><p>The company also has room to increase the amount of debt in its capital structure. At 3 times EBITDA, Link Net could raise debt by IDR5.5 trillion, which is just below its current market cap of IDR6 trillion.</p><p>Trading on a EV/TTM EBIT of 5.8 times, Link Net is attractive at current valuations.</p>

Link Net (LINK IJ) is a broadband and cable TV provider in Indonesia. It is undervalued under all scenarios with 54% upside to the 2021 fair value per share in bear case and 143% upside to the 2021 fair valuer per share in the base case.The company recently embarked on a new subscriber growth strategy, which so far has been successful. Over the past two quarters, Link Net added an average of 58,154 new subscribers per quarter. Over the previous five years, the average quarterly rate of new subscribers was 12,232. ARPU fell with the subscriber growth, but it seems to be stabilizing.In addition to the new subscriber growth strategy, the company is an efficient operator with a five-year average ROIC of 24%. It also regularly buys back shares when it thinks the company is undervalued. Since IPO in 2014, 9.6% of shares issued have been repurchased with most being canceled.The company also has room to increase the amount of debt in its capital structure. At 3 times EBITDA, Link Net could raise debt by IDR5.5 trillion, which is just below its current market cap of IDR6 trillion.Trading on a EV/TTM EBIT of 5.8 times, Link Net is attractive at current valuations.

Link Net (LINK:IJ)- New Subscriber Growth Strategy Working. The Company Is Undervalued.

Making sense of the Global Market, Euromonitor International Ltd.

Yu Mitsuhashi

Making sense of the Global Market

Euromonitor International Ltd.

We are a global market research company focused on industries, countries, economies and consumers worldwide. Our cross-country comparable research helps your organisation identify opportunities and develop growth strategies in countries and regions across the globe. With offices around the world, 1,200 analysts in 100 countries and market research on every key trend and driver, we give you powerful access to the real story behind consumer change.

Thematic (Sector/Industry)

<p>2016 was another bumpy year for China’s luxury goods market, plagued by the long-term impact of the anti-corruption campaign undertaken by the central government and the economic downturn as well as China’s latest effort to curb wrongdoing in luxury consumption in a crackdown on the grey market.</p>

2016 was another bumpy year for China’s luxury goods market, plagued by the long-term impact of the anti-corruption campaign undertaken by the central government and the economic downturn as well as China’s latest effort to curb wrongdoing in luxury consumption in a crackdown on the grey market.

China's Luxury Market Set for Steady Performance Amid Unfavourable Market Environment

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

<ul>
<li>The secular overweight since 2012 to semiconductor growth themes including sensor, parallel processing and communication chip stocks has outperformed wider tech indices.</li>
<li>The explosion in video steaming, cloud computing and the shift toward semi-autonomous vehicles as well as the huge computational intensity of AI software are all key drivers through end decade.</li>
<li>Global semiconductor industry sales saw accelerating growth from mid-2016, with Q4 sales of $93bn 12.3% higher y/y - semiconductors are…</li>
</ul>


The secular overweight since 2012 to semiconductor growth themes including sensor, parallel processing and communication chip stocks has outperformed wider tech indices.
The explosion in video steaming, cloud computing and the shift toward semi-autonomous vehicles as well as the huge computational intensity of AI software are all key drivers through end decade.
Global semiconductor industry sales saw accelerating growth from mid-2016, with Q4 sales of $93bn 12.3% higher y/y - semiconductors are…


Structural and Cyclical Drivers Underpin Semiconductor Outperformance

United States

Liberty Latin America Ltd. operates as a telecommunication company. The Company offers video, broadband Internet, telephony, and mobile services. Liberty Latin America also delivers entertainment services. Liberty Latin America serves customers in Chile, Puerto Rico, the Caribbean, and Latin America.

Liberty Latin America (LILAK US)

Upgrading Communications, Downgrading Staples - Both to Market Weight; US Dollar Major Top

We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the $SPX 4100-4165 area. Upgrading...

Vermilion Research

Lets Talk About LILAK

Hurricane Maria destroying Puerto Rico, Covid 19 and relentless weakening in Emerging Market currencies and sentiment can hardly be laid at their...

Superfluous Value

Link Net (LINK:IJ)- New Subscriber Growth Strategy Working. The Company Is Undervalued.

Link Net is a growing, efficient cable operator that recently embarked on a new subscriber growth strategy. It is undervalued under all scenarios...

Reperio Capital

China's Luxury Market Set for Steady Performance Amid Unfavourable Market Environment

2016 was another bumpy year for China’s luxury goods market, plagued by the long-term impact of the anti-corruption campaign undertaken by the...

Euromonitor International Ltd.

Structural and Cyclical Drivers Underpin Semiconductor Outperformance

The secular overweight since 2012 to semiconductor growth themes including sensor, parallel processing and communication chip stocks has...

Sean Maher