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

As the S&amp;P 500 pulls back to logical support at 3870, our weight-of-the-evidence approach continues to support our overall bullish outlook. While the positives heavily outweigh the negatives, the rising 10-year Treasury yield is threatening to become a headwind. In today’s report we highlight attractive Groups and stocks within Materials and Transportation.

As the S&amp;P 500 pulls back to logical support at 3870, our weight-of-the-evidence approach continues to support our overall bullish outlook. While the positives heavily outweigh the negatives, the rising 10-year Treasury yield is threatening to become a headwind. In today’s report we highlight attractive Groups and stocks within Materials and Transportation.

S&P 500 Testing 3870 Support; 10-Year Yield In Focus

We remain skeptical of the market's upside potential, as we are not sure if anything actually changed in Fed policy, or as a result of the U.S./China trade ceasefire, which has seemingly raised more questions than answers. With that said, 2,817 remains the key resistance level in focus on the S&amp;P 500. In today’s report we highlight attractive opportunities within Airlines, and Home Health Care Services.

We remain skeptical of the market's upside potential, as we are not sure if anything actually changed in Fed policy, or as a result of the U.S./China trade ceasefire, which has seemingly raised more questions than answers. With that said, 2,817 remains the key resistance level in focus on the S&amp;P 500. In today’s report we highlight attractive opportunities within Airlines, and Home Health Care Services.

U.S. Equity Strategy: S&P 500 Fails at Resistance

Key points:<ul>
<li>Energy names are showing signs of bottoming with the recent uptick in crude, and weakness in the U.S. dollar</li>
<li>REITs are continuing to firm up as rates have plateaued</li>
<li>Biotech stocks are continuing to show leadership characteristics</li>
</ul>Charts highlighted: AFI, ODP, SPWH, CVS, KMB, THS, CHK, KMI, RRC, AXS, ESS, KIM, APTS, KRG, REGN, NERV, NSTG, RARX, AYI, CFX, AXL, PAH, FNSR, TRUE, ALK, HA, SAVE, and PEGI

Key points:
Energy names are showing signs of bottoming with the recent uptick in crude, and weakness in the U.S. dollar
REITs are continuing to firm up as rates have plateaued
Biotech stocks are continuing to show leadership characteristics
Charts highlighted: AFI, ODP, SPWH, CVS, KMB, THS, CHK, KMI, RRC, AXS, ESS, KIM, APTS, KRG, REGN, NERV, NSTG, RARX, AYI, CFX, AXL, PAH, FNSR, TRUE, ALK, HA, SAVE, and PEGI

Technically Attractive U.S. Stocks for Value Investors

Founder & Managing Director, AIR Control Tower, AIR Control Tower

Neil Glynn

Founder & Managing Director, AIR Control Tower

AIR Control Tower

AIR Control Tower is an independent research and analysis platform. Its mission is to provide impactful insight and analysis across the global airline industry at a company and market level via detailed financial models to aid decision making for key stake holders at a time when risks have seldom, if ever, been higher and the global sector grapples with the imperative of funding de-carbonisation. Unique analysis forecasting global carrier-level earnings/cash flows, and restructuring/de-leveraging prospects, is designed to dynamically assess the health of the industry, predict surprises and identify potential requirements for third party support.

Insights on the global airline industry

Equity Bottom-Up

<ul>
<li>WSJ reports Spirit is exploring a Chapter 11 filing, with this risk apparent since the collapse of the planned JetBlue combination in January.</li>
<li>We highlight detailed analysis comparing the economics of airline recoveries across the US, illustrating Spirit lags on commercial performance and cost control.</li>
<li>With labor costs up from 21% of revenue in 2Q19 to 33% in 2Q24, compared to a pre-tax match of 12% in 2019, Spirit needs to address this labor-pricing mismatch.</li>
</ul>


WSJ reports Spirit is exploring a Chapter 11 filing, with this risk apparent since the collapse of the planned JetBlue combination in January.
We highlight detailed analysis comparing the economics of airline recoveries across the US, illustrating Spirit lags on commercial performance and cost control.
With labor costs up from 21% of revenue in 2Q19 to 33% in 2Q24, compared to a pre-tax match of 12% in 2019, Spirit needs to address this labor-pricing mismatch.


Spirit Airlines Needs to Address Labor Cost-Pricing Mismatch with or Without Chapter 11

<ul>
<li>Southwest continues to suffer revenue generation challenges and issued another profit warning today, yet pricing pressure simply exposes a lack of control over its costs</li>
<li>Our detailed analysis of Southwest's financial performance illustrates it has seen labor inflation decimate its conversion of gross profit to EBITDAR, now ranking among the bottom tier of the sector</li>
<li>Our deep dive on peer financial performances illustrates that only American, Delta and United have managed to broadly protect gross profit/EBITDAR conversion while all others have seen labor costs bite</li>
</ul>


Southwest continues to suffer revenue generation challenges and issued another profit warning today, yet pricing pressure simply exposes a lack of control over its costs
Our detailed analysis of Southwest's financial performance illustrates it has seen labor inflation decimate its conversion of gross profit to EBITDAR, now ranking among the bottom tier of the sector
Our deep dive on peer financial performances illustrates that only American, Delta and United have managed to broadly protect gross profit/EBITDAR conversion while all others have seen labor costs bite


Southwest Airlines: Dissecting the Drivers of Profitability Drag

United States

Spirit Airlines Inc. is a low-fare airline based in Miramar, Florida. The Airline provides low-cost travel opportunities principally to and from South Florida, the Caribbean and Latin America. Spirit Airlines basic service combines with a range of optional services for additional fees, targets price sensitive leisure travelers and travelers visiting friends and relatives.

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Spirit Airlines (SAVE US)

S&P 500 Testing 3870 Support; 10-Year Yield In Focus

As the S&P 500 pulls back to logical support at 3870. In today’s report we highlight attractive Groups and stocks within Materials and Transportation.

Vermilion Research

U.S. Equity Strategy: S&P 500 Fails at Resistance

We remain skeptical of the market's upside potential, as we are not sure if anything actually changed in Fed policy, or as a result of the...

Vermilion Research

Technically Attractive U.S. Stocks for Value Investors

Key points: Energy names are showing signs of bottoming with the recent uptick in crude, and weakness in the U.S. dollar REITs are continuing to...

Vermilion Research

Spirit Airlines Needs to Address Labor Cost-Pricing Mismatch with or Without Chapter 11

Deep dive on the drivers of Spirit Airlines's financial challenges relative to peers as the WSJ reports it is exploring a Chapter 11 filing.

Neil Glynn

Southwest Airlines: Dissecting the Drivers of Profitability Drag

Deep dive disaggregating the key drivers of Southwest Airlines's underperformance of its fellow US majors, ranking it alongside the bottom tier of...

Neil Glynn

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