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

<ul>
<li>In last week's Compass (July 26) we discussed positive signals that we believe suggested the lows for this bear market may have already been established, or that downside is limited.</li>
<li>We continue to see more evidence that supports this claim; as a result, we are upgrading our outlook to neutral.</li>
<li>The SPX is reversing topside its 4-month downtrend, and the Russell 2000 (IWM), Russell Micro-Caps (IWC), and Russell 2000Growth (IWO) are each reversing topside their 9-month downtrends; the bottom's in.</li>
</ul>


In last week's Compass (July 26) we discussed positive signals that we believe suggested the lows for this bear market may have already been established, or that downside is limited.
We continue to see more evidence that supports this claim; as a result, we are upgrading our outlook to neutral.
The SPX is reversing topside its 4-month downtrend, and the Russell 2000 (IWM), Russell Micro-Caps (IWC), and Russell 2000Growth (IWO) are each reversing topside their 9-month downtrends; the bottom's in.


S&P 500 Reverses 4-Month Downtrend; Upgrading Consumer Discretionary to Market Weight

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Equity Bottom-Up

<ul>
<li>This presentation runs through six current short ideas presented on a Smartkarma webinar on 22nd December.</li>
<li>These are:  Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and Renewable Fuels (REGI).</li>
<li>The presentation also summarizes Two Rivers' short idea generation process.</li>
</ul>


This presentation runs through six current short ideas presented on a Smartkarma webinar on 22nd December.
These are:  Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and Renewable Fuels (REGI).
The presentation also summarizes Two Rivers' short idea generation process.


President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

COVID may have impacted the tire replacement cycle for longer than expected.  Additionally, after reopening, more people may work from home more frequently than before COVID, potentially putting a cap on a miles driven rebound.  Furthermore, Monro's geographic footprint exposes them to some negative migration trends occurring in parts of the US.  Finally, estimates and valuations leave room for operational disappointment and multiple contraction.

COVID may have impacted the tire replacement cycle for longer than expected.  Additionally, after reopening, more people may work from home more frequently than before COVID, potentially putting a cap on a miles driven rebound.  Furthermore, Monro's geographic footprint exposes them to some negative migration trends occurring in parts of the US.  Finally, estimates and valuations leave room for operational disappointment and multiple contraction. 

Monro Inc(MNRO): Potential Permanent Pressure on Miles Driven and Migration Headwinds May Hurt MNRO

The rotation out of stay-at-home/COVID-19 beneficiary stocks and into reopening/economically sensitive stocks that we highlighted last week has continued, leading us to make several upgrades and one downgrade (see first bullet below). This broadening-out of participation and several other bullish developments highlighted below tells us the bulls have the upper hand. In today’s report we highlight attractive Groups and stocks within Discretionary, Transportation, and Manufacturing: CD-05 Auto Parts Retailers, TR-05 Large-Cap Air Freight &amp; Logistics, TR-12 Large-Cap Trucking, and MF-31 Building Products and Fixtures.

The rotation out of stay-at-home/COVID-19 beneficiary stocks and into reopening/economically sensitive stocks that we highlighted last week has continued, leading us to make several upgrades and one downgrade (see first bullet below). This broadening-out of participation and several other bullish developments highlighted below tells us the bulls have the upper hand. In today’s report we highlight attractive Groups and stocks within Discretionary, Transportation, and Manufacturing: CD-05 Auto Parts Retailers, TR-05 Large-Cap Air Freight &amp; Logistics, TR-12 Large-Cap Trucking, and MF-31 Building Products and Fixtures.

U.S. Equity Strategy: Healthy Sector Rotations Continue

The weight of the evidence suggests that the pullback has begun. This belief is supported by overbought conditions combined with the S&amp;P 500, MSCI ACWI, and nearly all Sectors hitting logical resistance. Assuming the pullback continues, the next question is how deep or damaging will it be? In this report we highlight various market/technical indicators we are monitoring, as well as pointing out attractive set ups within Consumer Discretionary and Health Care Sectors.

The weight of the evidence suggests that the pullback has begun. This belief is supported by overbought conditions combined with the S&amp;P 500, MSCI ACWI, and nearly all Sectors hitting logical resistance. Assuming the pullback continues, the next question is how deep or damaging will it be? In this report we highlight various market/technical indicators we are monitoring, as well as pointing out attractive set ups within Consumer Discretionary and Health Care Sectors.

U.S. Equity Strategy: Has “the Pullback” Begun?

United States

Monro Muffler Brake, Inc. operates a chain of Company owned stores in the Northeast US providing automotive undercar repair and tire services in the Eastern region of the US. The Company's stores provide a broad range of services  for brake systems, mufflers and exhaust, tires, steering, drive train,  suspension, wheel alignment, routine maintenance and state inspections.

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Monro Muffler Brake (MNRO US)

S&P 500 Reverses 4-Month Downtrend; Upgrading Consumer Discretionary to Market Weight

We continue to see more evidence suggesting the lows are in; as a result, we are upgrading our outlook to neutral. 4-month downtrend reversal for...

Vermilion Research

Review of Current Short Ideas

Current short ideas presented here: Atkore (ATKR), Danaher (DHR), Service Corp International (SCI), ABM Industries (ABM), Monro (MNRO), and...

Eric Fernandez, CFA

Monro Inc(MNRO): Potential Permanent Pressure on Miles Driven and Migration Headwinds May Hurt MNRO

An auto service and tire retailer facing mile driven headwinds due to work from home trends and net migration out of their Northeast stores.

Robert C Prather Jr

U.S. Equity Strategy: Healthy Sector Rotations Continue

The rotation out of stay-at-home/COVID-19 beneficiary stocks and into reopening/economically sensitive stocks that we highlighted last week has...

Vermilion Research

U.S. Equity Strategy: Has “the Pullback” Begun?

The weight of the evidence suggests that the pullback has begun. This belief is supported by overbought conditions combined with the S&P 500,...

Vermilion Research

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