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

The S&amp;P 500, Nasdaq 100, and Russell 2000 are all holding above their respective short-term support levels and market dynamics remain positive. As a result, our outlook remains bullish and we continue to believe a “buy the dip” mentality is warranted. In today’s report we highlight attractive Groups and stocks within Services, Transportation, &amp; Utilities: Construction &amp; Engineering, Large-Cap, Auctions, Vehicle Rentals/Leasing, Electric, Southwest

The S&amp;P 500, Nasdaq 100, and Russell 2000 are all holding above their respective short-term support levels and market dynamics remain positive. As a result, our outlook remains bullish and we continue to believe a “buy the dip” mentality is warranted. In today’s report we highlight attractive Groups and stocks within Services, Transportation, &amp; Utilities: Construction &amp; Engineering, Large-Cap, Auctions, Vehicle Rentals/Leasing, Electric, Southwest

U. S. Equity Strategy: Upgrading Utilities; Downgrading Communications

In last week’s Compass (5/14) we laid our case for a more cautious outlook as a result of several negative developments, including breakdowns for EM (EEM) and China (MCHI, FXI), steep price and RS uptrend violations for Technology (XLK, RYT), improving RS for defensive areas of the market, and weakness in copper. Our outlook remains neutral. In today’s report we highlight attractive Groups and stocks within Consumer Staples and Utilities.

In last week’s Compass (5/14) we laid our case for a more cautious outlook as a result of several negative developments, including breakdowns for EM (EEM) and China (MCHI, FXI), steep price and RS uptrend violations for Technology (XLK, RYT), improving RS for defensive areas of the market, and weakness in copper. Our outlook remains neutral. In today’s report we highlight attractive Groups and stocks within Consumer Staples and Utilities.

U.S. Equity Strategy: Neutral Outlook; Opportunities Within Staples and Utilities

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Post-March announcement, investors bought shares of <a href="https://www.smartkarma.com/entities/avangrid-inc" target="_blank" data-smartkarma-citation="entities:26503:1" rel="noopener">Avangrid (AGR US)</a>  in the hope of an offer sweetening, which was flagged here, as Iberdrola got $6 billion from its Mexico exit.</li>
<li>The improved $35.75/shareoffer was made in response to potential resistance from prospective minority shareholders, as the deal needs the approval of a majority of these non-Iberdrola stakeholders.</li>
<li>Spread is 3.2%/5.55% (gross/annualised) assuming $1.4667 in dividend payments (three dividends of $0.44 and a prorated dividend of $0.1467) and settlement on 30 December. Long.</li>
</ul>


Post-March announcement, investors bought shares of Avangrid (AGR US)  in the hope of an offer sweetening, which was flagged here, as Iberdrola got $6 billion from its Mexico exit.
The improved $35.75/shareoffer was made in response to potential resistance from prospective minority shareholders, as the deal needs the approval of a majority of these non-Iberdrola stakeholders.
Spread is 3.2%/5.55% (gross/annualised) assuming $1.4667 in dividend payments (three dividends of $0.44 and a prorated dividend of $0.1467) and settlement on 30 December. Long.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/iberdrola-sa" target="_blank" data-smartkarma-citation="entities:21276:1" rel="noopener">Iberdrola SA (IBE SM)</a> launches a $34.25/share cash offer to acquire the minorities (18.4%) in its US subsidiary <a href="https://www.smartkarma.com/entities/avangrid-inc" target="_blank" data-smartkarma-citation="entities:26503:1" rel="noopener">Avangrid (AGR US)</a>. Premium is 6.8%, and the cost c. $2.5 billion.</li>
<li>The market was awaiting this move since the cancellation of the PNM deal, which explains the recent rise in the share price of Avangrid.</li>
<li>Gross spread is 4.5%. It seems investors are buying in the hope of an offer sweetening, knowing that Iberdrola has some cash available to spend from the profitable Mexico exit.</li>
</ul>



Iberdrola SA (IBE SM) launches a $34.25/share cash offer to acquire the minorities (18.4%) in its US subsidiary Avangrid (AGR US). Premium is 6.8%, and the cost c. $2.5 billion.
The market was awaiting this move since the cancellation of the PNM deal, which explains the recent rise in the share price of Avangrid.
Gross spread is 4.5%. It seems investors are buying in the hope of an offer sweetening, knowing that Iberdrola has some cash available to spend from the profitable Mexico exit.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Stay long in <a href="https://www.smartkarma.com/entities/hs-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7311:1" rel="noopener">HS Holdings (8699 JP)</a>.But beware. It is possible that there is a slightly uncomfortable outcome. </li>
<li>
<a href="https://www.smartkarma.com/entities/celltrion-pharm-inc" target="_blank" data-smartkarma-citation="entities:992:1" rel="noopener">Celltrion Pharm (068760 KS)</a> is up 37% since the <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>/<a href="https://www.smartkarma.com/entities/celltrion-healthcare-co-ltd" target="_blank" data-smartkarma-citation="entities:23641:1" rel="noopener">Celltrion Healthcare (091990 KS)</a> merger completed; and Inc is up 22%. That's A LOT of expectation baked in. </li>
<li>NEW NISA details are cute, but governance and corporate buybacks matter more. If better education induces a swing from cash/deposits to risky assets, much of that will happen outside NISA.</li>
</ul>


Stay long in HS Holdings (8699 JP).But beware. It is possible that there is a slightly uncomfortable outcome. 

Celltrion Pharm (068760 KS) is up 37% since the Celltrion Inc (068270 KS)/Celltrion Healthcare (091990 KS) merger completed; and Inc is up 22%. That's A LOT of expectation baked in. 
NEW NISA details are cute, but governance and corporate buybacks matter more. If better education induces a swing from cash/deposits to risky assets, much of that will happen outside NISA.


Last Week in Event SPACE: HS Holdings, Celltrion Pharm, NISA, PICC/PICC P&C

United States

PNM Resources Inc. is a holding company. The Company, through its subsidiaries, generates, transmits, and distributes electricity.

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PNM Resources (PNM US)

U. S. Equity Strategy: Upgrading Utilities; Downgrading Communications

We are upgrading Utilities and downgrading Communications. We recap important technical levels across major indexes and share actionable ideas...

Vermilion Research

U.S. Equity Strategy: Neutral Outlook; Opportunities Within Staples and Utilities

In last week’s Compass (5/14) we laid our case for a more cautious outlook as a result of several negative developments, including breakdowns for...

Vermilion Research

Iberdrola/Avangrid: Spread

Post-March announcement, investors bought shares of Avangrid (AGR US) in the hope of an offer sweetening, which was flagged here, as Iberdrola got...

Jesus Rodriguez Aguilar

Iberdrola/Avangrid: Logical Move

Iberdrola SA offers $34.25/share to acquire minorities in US subsidiary Avangrid, with a 6.8% premium and $2.5 billion cost. The market was...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: HS Holdings, Celltrion Pharm, NISA, PICC/PICC P&C

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

U. S. Equity Strategy: Upgrading Utilities; Downgrading Communications

We are upgrading Utilities and downgrading Communications. We recap important technical levels across major indexes and share actionable ideas...

Vermilion Research

U.S. Equity Strategy: Neutral Outlook; Opportunities Within Staples and Utilities

In last week’s Compass (5/14) we laid our case for a more cautious outlook as a result of several negative developments, including breakdowns for...

Vermilion Research

Iberdrola/Avangrid: Spread

Post-March announcement, investors bought shares of Avangrid (AGR US) in the hope of an offer sweetening, which was flagged here, as Iberdrola got...

Jesus Rodriguez Aguilar

Iberdrola/Avangrid: Logical Move

​Iberdrola SA offers $34.25/share to acquire minorities in US subsidiary Avangrid, with a 6.8% premium and $2.5 billion cost. The market was...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: HS Holdings, Celltrion Pharm, NISA, PICC/PICC P&C

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Iberdrola SA offers $34.25/share to acquire minorities in US subsidiary Avangrid, with a 6.8% premium and $2.5 billion cost. The market was...