Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>SpaceX is preparing to raise at least $75 billion at a valuation of nearly $1.75 trillion to $2.0 trillion. </li>
<li>My base case valuation of SpaceX is market cap of $1.6 trillion over one year. My valuation sensitivity analysis suggests a valuation range from $1.3 trillion to $1.9 trillion. </li>
<li>I would not subscribe to SpaceX at a valuation range of $1.75 trillion to $2.0 trillion. Rather, you could purchase Samsung Electronics (005930 KS) at a P/E of 7x, instead.</li>
</ul>


SpaceX is preparing to raise at least $75 billion at a valuation of nearly $1.75 trillion to $2.0 trillion. 
My base case valuation of SpaceX is market cap of $1.6 trillion over one year. My valuation sensitivity analysis suggests a valuation range from $1.3 trillion to $1.9 trillion. 
I would not subscribe to SpaceX at a valuation range of $1.75 trillion to $2.0 trillion. Rather, you could purchase Samsung Electronics (005930 KS) at a P/E of 7x, instead.


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 continues to hover below critical resistance at its 200-day moving average while market participants remain in a wait-and-see mode for new developments on U.S.-China trade and details on the latest border security proposal. At the same time, breadth improvements have extended to our Manufacturing Sector - a welcomed sight given its cyclical nature.  We are Upgrading Manufacturing to market weight from underweight. Our cap-weighted Manufacturing Sector has steadily improved in our RSR ranks due in large part to strength in Aerospace &amp; Defense Groups. In today’s report we highlight attractive Groups within Manufacturing and Technology..

The S&amp;P 500 continues to hover below critical resistance at its 200-day moving average while market participants remain in a wait-and-see mode for new developments on U.S.-China trade and details on the latest border security proposal. At the same time, breadth improvements have extended to our Manufacturing Sector - a welcomed sight given its cyclical nature.  We are Upgrading Manufacturing to market weight from underweight. Our cap-weighted Manufacturing Sector has steadily improved in our RSR ranks due in large part to strength in Aerospace &amp; Defense Groups. In today’s report we highlight attractive Groups within Manufacturing and Technology..

U.S. Equity Strategy: Upgrading Manufacturing Sector

So far the S&amp;P 500 has failed to overcome the 2,790-2,800 resistance level we first highlighted in our 6/5/18 Compass. However, while a breakdown below support remains possible, the S&amp;P 500 is currently at an area where we would expect to see some support. The wild card remains financials.  A breakdown of the sector has the potential to usher in another broad market selloff, which could cause the S&amp;P 500 to fall below 200-day moving average support and lead to more negative breadth signals for the indicators highlighted above. $26.50 on the XLF is the level we are watching.

So far the S&amp;P 500 has failed to overcome the 2,790-2,800 resistance level we first highlighted in our 6/5/18 Compass. However, while a breakdown below support remains possible, the S&amp;P 500 is currently at an area where we would expect to see some support. The wild card remains financials.  A breakdown of the sector has the potential to usher in another broad market selloff, which could cause the S&amp;P 500 to fall below 200-day moving average support and lead to more negative breadth signals for the indicators highlighted above. $26.50 on the XLF is the level we are watching.

U.S. Equities: Downgrading Manufacturing and Materials; Large-Cap Financials at Critical Support

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

Thematic (Sector/Industry)

<ul>
<li>A broad USD rally is finally underway, and the risk of an offshore dollar shortage remains acute for EM - the asset allocation implications have been covered in recent notes.</li>
<li>The deep junk issue last week from WeWork with its ‘community adjusted EBITDA’ metric as well as the lending scandal in Australia engulfing AMP are classic late credit cycle warning signals.</li>
<li>Real housing prices in Scandinavia and Australia/Canada as well as HK are dangerously above long-term trend and vulnerable to a global…</li>
</ul>


A broad USD rally is finally underway, and the risk of an offshore dollar shortage remains acute for EM - the asset allocation implications have been covered in recent notes.
The deep junk issue last week from WeWork with its ‘community adjusted EBITDA’ metric as well as the lending scandal in Australia engulfing AMP are classic late credit cycle warning signals.
Real housing prices in Scandinavia and Australia/Canada as well as HK are dangerously above long-term trend and vulnerable to a global…


Beware Deep Junk and Liar Loans, as Netflix Reinvents Media Sector…

Large-cap aerospace and defense stocks remain leadership, emerging from recent market volatility to achieve new relative strength highs. Aero/defense-related names continue to be favorites of ours within the Manufacturing Sector.  In today’s report we highlight the following names: Lockheed Martin (LMT), General Dynamics (GD), Huntington Ingalls Industries (HII), TransDigm (TDG), Textron (TXT), Teledyne Technologies (TDY), Embraer S.A. ADR (ERJ), and L3 Technologies (LLL).

Large-cap aerospace and defense stocks remain leadership, emerging from recent market volatility to achieve new relative strength highs. Aero/defense-related names continue to be favorites of ours within the Manufacturing Sector.  In today’s report we highlight the following names: Lockheed Martin (LMT), General Dynamics (GD), Huntington Ingalls Industries (HII), TransDigm (TDG), Textron (TXT), Teledyne Technologies (TDY), Embraer S.A. ADR (ERJ), and L3 Technologies (LLL).

United States

Raytheon Technologies Corporation operates as an aircraft manufacturing company. The Company focuses on technology offerings and engineering teams to deliver innovative solutions such as aero structures, avionics, interiors, mechanical systems, mission systems, aircraft engines, power and control systems, radars, software, and other products.

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Raytheon Technologies (RTX US)

SpaceX IPO Valuation Analysis

Mirae Asset Securities' 2nd subscription round for SpaceX IPO on Monday was fully subscribed in less than two minutes, following a first-round...

Douglas Kim

U.S. Equity Strategy: Upgrading Manufacturing Sector

The S&P 500 continues to hover below critical resistance at its 200-day moving average while market participants remain in a wait-and-see mode...

Vermilion Research

U.S. Equities: Downgrading Manufacturing and Materials; Large-Cap Financials at Critical Support

So far the S&P 500 has failed to overcome the 2,790-2,800 resistance level we first highlighted in our 6/5/18 Compass. However, while a...

Vermilion Research

Beware Deep Junk and Liar Loans, as Netflix Reinvents Media Sector…

A broad USD rally is finally underway, and the risk of an offshore dollar shortage remains acute for EM - the asset allocation implications have...

Sean Maher

U. S. Aerospace & Defense Lifting Off

Large-cap aerospace and defense stocks remain leadership, emerging from recent market volatility to achieve new relative strength highs....

Vermilion Research

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