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

<p>The U.S. has continued to separate itself from broad emerging market and developed international indexes. One positive is that MSCI EM and MSCI EAFE have been able to stabilize <em>from a price perspective </em>in recent weeks despite relative strength weakness vs. MSCI ACWI.<em>  </em>In today’s report we scour the globe for attractive investments, ex-U.S., in an environment where selectivity is key.  </p>

The U.S. has continued to separate itself from broad emerging market and developed international indexes. One positive is that MSCI EM and MSCI EAFE have been able to stabilize from a price perspective in recent weeks despite relative strength weakness vs. MSCI ACWI.  In today’s report we scour the globe for attractive investments, ex-U.S., in an environment where selectivity is key.  

Global Equity Strategy: Where to Hide Outside the U.S.

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Thematic (Sector/Industry)

<p>I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap below ¥200bn. We then screened for names that had positive YoY quarterly growth every quarter for the last 3 years. 98 names made that list.</p><p>We cut the list down to 24 names by limiting it to names that have also had positive quarterly OP  growth 12 out of the last 13 quarters.</p><h2>Screen Results </h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/029/859/original/2.png?1500323285" class="editor-image img-responsive" data-smartkarma-image-id="29859"></figure><div class="content-caption">Source: Custom Products</div><p>As you can see from the table above…</p>

I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap below ¥200bn. We then screened for names that had positive YoY quarterly growth every quarter for the last 3 years. 98 names made that list.We cut the list down to 24 names by limiting it to names that have also had positive quarterly OP  growth 12 out of the last 13 quarters.Screen Results Source: Custom ProductsAs you can see from the table above…

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/forum-engineering-inc" target="_blank" data-smartkarma-citation="entities:28896:1" rel="noopener">Forum Engineering Inc (7088 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co (KKR US)</a> at JPY1,710, a 32.6% premium to the last close price.</li>
<li>The offer is arguably light due to a lack of an auction and is below the midpoint of the target IFA DCF valuation range. </li>
<li>However, the offer is attractive compared to precedent transactions, peer multiples and represents an all-time high. The large number of cross-holders will help meet the required tendering rate.</li>
</ul>



Forum Engineering Inc (7088 JP) has recommended a tender offer from KKR &amp; Co (KKR US) at JPY1,710, a 32.6% premium to the last close price.
The offer is arguably light due to a lack of an auction and is below the midpoint of the target IFA DCF valuation range. 
However, the offer is attractive compared to precedent transactions, peer multiples and represents an all-time high. The large number of cross-holders will help meet the required tendering rate.


Forum Engineering (7088 JP): KKR’s Tender Offer at JPY1,710

<ul>
<li>
<a href="https://www.smartkarma.com/entities/technopro-holdings-inc" target="_blank" data-smartkarma-citation="entities:6955:1" rel="noopener">Technopro Holdings (6028 JP)</a> announced a tender offer from Blackstone at JPY4,870, a 43.7% premium to the undisturbed price of JPY3,389 but at a slight discount to the last close.</li>
<li>While below the last close, Blackstone’s offer was a result of an auction process and was the highest binding offer. The offer also represents a pre-media rumour all-time high.</li>
<li>Surprisingly, Blackstone has not disclosed irrevocables. The Board has a neutral opinion. Nevertheless, a fair auction process suggests there will be limited opposition to the offer. </li>
</ul>



Technopro Holdings (6028 JP) announced a tender offer from Blackstone at JPY4,870, a 43.7% premium to the undisturbed price of JPY3,389 but at a slight discount to the last close.
While below the last close, Blackstone’s offer was a result of an auction process and was the highest binding offer. The offer also represents a pre-media rumour all-time high.
Surprisingly, Blackstone has not disclosed irrevocables. The Board has a neutral opinion. Nevertheless, a fair auction process suggests there will be limited opposition to the offer. 


TechnoPro (6028 JP): Blackstone’s Tender Offer at JPY4,870

<ul>
<li>The <a href="https://finance.yahoo.com/news/blackstone-acquire-japans-technopro-3-094830609.html" target="_blank" rel="noopener">Nikkei reports</a> that <a href="https://www.smartkarma.com/entities/blackstone-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone (BX US)</a> will launch the tender offer for <a href="https://www.smartkarma.com/entities/technopro-holdings-inc" target="_blank" data-smartkarma-citation="entities:6955:1" rel="noopener">Technopro Holdings (6028 JP)</a> just below JPY4,900, a 44.6% premium to the undisturbed price.</li>
<li>While the rumoured offer is 1.5% below the last close, it is attractive as it resulted from an auction and represents a pre-media rumour all-time high.</li>
<li>It is unclear if the offer is preconditional on regulatory approvals. Blackstone is likely to secure irrevocables from activists like Orbis to project a secure path to completion. </li>
</ul>


The Nikkei reports that Blackstone (BX US) will launch the tender offer for Technopro Holdings (6028 JP) just below JPY4,900, a 44.6% premium to the undisturbed price.
While the rumoured offer is 1.5% below the last close, it is attractive as it resulted from an auction and represents a pre-media rumour all-time high.
It is unclear if the offer is preconditional on regulatory approvals. Blackstone is likely to secure irrevocables from activists like Orbis to project a secure path to completion. 


TechnoPro (6028 JP): Blackstone’s Rumoured Takeunder Offer

Japan

OUTSOURCING Inc. provides outsourcing services for manufacturing companies. The Company mainly provides services for industries such as food, electric equipment, transport machine, chemical, and metal.  Outsourcing also provides worker dispatching service.

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Outsourcing Inc (2427 JP)

Global Equity Strategy: Where to Hide Outside the U.S.

The U.S. has continued to separate itself from broad emerging market and developed international indexes. One positive is that MSCI EM and MSCI...

Vermilion Research

Small-Cap Growth Names in Japan....

I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap...

Custom Products Group

Forum Engineering (7088 JP): KKR’s Tender Offer at JPY1,710

While the offer is arguably light, as it falls below the midpoint of the IFA DCF range, it remains attractive compared to precedent transactions,...

Arun George

TechnoPro (6028 JP): Blackstone’s Tender Offer at JPY4,870

While below the last close, Blackstone’s offer was a result of an auction process and was the highest binding offer. The offer also represents a...

Arun George

TechnoPro (6028 JP): Blackstone’s Rumoured Takeunder Offer

While the rumoured offer is 1.5% below the last close, it is attractive as it resulted from an auction and represents a pre-media rumour all-time...

Arun George

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