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

NASDAQ Composite Index / Technical Analysis

<ul>
<li>Following last week's pullback, a consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports.</li>
<li>As long as these base supports continue to hold, it tells us this is likely just a normal pullback within the overall bullish trend.</li>
<li>Important supports that we need to see hold in order to remain bullish include 4600 on the S&amp;P 500 and 14,400 on the Nasdaq Composite.</li>
</ul>


Following last week's pullback, a consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports.
As long as these base supports continue to hold, it tells us this is likely just a normal pullback within the overall bullish trend.
Important supports that we need to see hold in order to remain bullish include 4600 on the S&amp;P 500 and 14,400 on the Nasdaq Composite.


Major Base Supports Holding; DXY Testing the 2-Month Downtrend; 4600 on SPX Remains Key Support

Independent Research, Food Delivery Space, Newmoon Capital

Newmoon Capital

Independent Research, Food Delivery Space

We look for owner-operators in what we believe are either highly defensible assets or soon to be highly defensible assets, trading at a fraction of their future potential.

Equity Bottom-Up

<ul><li>It looks to me that the company is now run-rating to $500M of EBITDA, but it is possible that it is much lower depending on how Q3 turn out.</li><li>It was very possible that things were fine for the first 2 months of Q3 and then got really bad thereafter and so the run-rate EBITDA is actually much lower…but let’s just use $500M as our base case</li><li>Capex in this business is really closer to Opex. Apria is really a leasing/distribution business and so Capex is needed to keep the business running.</li></ul>

It looks to me that the company is now run-rating to $500M of EBITDA, but it is possible that it is much lower depending on how Q3 turn out.It was very possible that things were fine for the first 2 months of Q3 and then got really bad thereafter and so the run-rate EBITDA is actually much lower…but let’s just use $500M as our base caseCapex in this business is really closer to Opex. Apria is really a leasing/distribution business and so Capex is needed to keep the business running.

<ul><li>Why: Profits in “Global Products” should decline over the next two years as it emerges from a period of over-earning in 2020 and 2021, resulting in a collapse in earnings and valuation</li><li>When: Should show evidence in 1Q/2Q2022 - once investors see that Global Products profit is shrinking and start applying a low-growth multiple to normalised earnings.</li><li>Factor Exposure: Value, Covid-beneficiary, negative earnings revision</li></ul>

Why: Profits in “Global Products” should decline over the next two years as it emerges from a period of over-earning in 2020 and 2021, resulting in a collapse in earnings and valuationWhen: Should show evidence in 1Q/2Q2022 - once investors see that Global Products profit is shrinking and start applying a low-growth multiple to normalised earnings.Factor Exposure: Value, Covid-beneficiary, negative earnings revision

Alpha-Centric ESG Research

Kyle Rudden

The Biden-Harris administration recently announced four "Day One" priorities, the first of which is their COVID-19 response plan. COVID-19 response is first, because it is a prerequisite to economic recovery, which is the second of their four "Day One" priorities.Several investment themes are inherent in Biden's COVID-19 plan, some more direct and obvious than others. This Insight overviews more significant themes and their most representative stocks, in three sections (the first two will be expanded on in separate upcoming reports):<ol>
<li>
COVID-19 Testing: Testing is the largest, most tangible, nearest-term investment opportunity created by Biden's plan. An estimated US$75-100 billion for testing could be windfall for certain stocks, but not all. Selectivity is key, and timing is critical (related to vaccine development).</li>
<li>
Vaccine Delivery: Biden's plan emphasises vaccine manufacturing and delivery, versus vaccine development (Trump had allocated <a href="https://www.hhs.gov/coronavirus/explaining-operation-warp-speed/index.html" target="_blank" rel="noopener">billions</a> to vaccine development companies). Some might go to big pharma companies for M&amp;D, but most should benefit other "cold chain" stocks.</li>
<li>
PPE Supply/Other: PPE manufacturing, of course, but that is largely old news. I will address it, but do so along with other more interesting collateral themes. For example, retail drugs chains, elder-care, medical technologies, and a few other related industries.</li>
</ol>

The Biden-Harris administration recently announced four "Day One" priorities, the first of which is their COVID-19 response plan. COVID-19 response is first, because it is a prerequisite to economic recovery, which is the second of their four "Day One" priorities.Several investment themes are inherent in Biden's COVID-19 plan, some more direct and obvious than others. This Insight overviews more significant themes and their most representative stocks, in three sections (the first two will be expanded on in separate upcoming reports):

COVID-19 Testing: Testing is the largest, most tangible, nearest-term investment opportunity created by Biden's plan. An estimated US$75-100 billion for testing could be windfall for certain stocks, but not all. Selectivity is key, and timing is critical (related to vaccine development).

Vaccine Delivery: Biden's plan emphasises vaccine manufacturing and delivery, versus vaccine development (Trump had allocated billions to vaccine development companies). Some might go to big pharma companies for M&amp;D, but most should benefit other "cold chain" stocks.

PPE Supply/Other: PPE manufacturing, of course, but that is largely old news. I will address it, but do so along with other more interesting collateral themes. For example, retail drugs chains, elder-care, medical technologies, and a few other related industries.


Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes

United States

Owens & Minor, Inc. distributes medical/surgical supplies throughout the United States.  The Company's customers include hospitals, integrated healthcare systems, and group purchasing organizations.  Owens & Minor also provides services in supply chain management, logistics, and technology.

Owens & Minor (OMI US)

Major Base Supports Holding; DXY Testing the 2-Month Downtrend; 4600 on SPX Remains Key Support

A consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports...

Vermilion Research

OMI update

It looks to me that the company is now run-rating to $500M of EBITDA, but it is possible that it is much lower depending on how Q3 turn out.

Newmoon Capital

Owens & Minor (OMI): Short

Why: Profits in “Global Products” should decline over the next two years as it emerges from a period of over-earning in 2020 and 2021, resulting in...

Newmoon Capital

Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes

Biden's recently-announced COVID-19 response plan suggests a number of investment themes. This Insight overviews the more significant of those...

Kyle Rudden