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

Concerns over perceived U.S. central bank policy missteps have been somewhat alleviated following dovish takeaways from Fed Chair Powell’s comments this week. However, trade tensions remain a concern for global markets despite optimism surrounding the Trump/Xi meeting at the G20 summit this week. Therefore, our outlook remains cautious and we expect consolidation to continue as global equities enjoy a bounce off of recent lows. Ultimately, we will need to see more definitive signs of bottoming throughout Europe, Asia, and the U.S. before getting positive on global equities.  We provide a technical appraisal of major markets and highlight attractive set ups in global transportation, communications, and financial sectors

Concerns over perceived U.S. central bank policy missteps have been somewhat alleviated following dovish takeaways from Fed Chair Powell’s comments this week. However, trade tensions remain a concern for global markets despite optimism surrounding the Trump/Xi meeting at the G20 summit this week. Therefore, our outlook remains cautious and we expect consolidation to continue as global equities enjoy a bounce off of recent lows. Ultimately, we will need to see more definitive signs of bottoming throughout Europe, Asia, and the U.S. before getting positive on global equities.  We provide a technical appraisal of major markets and highlight attractive set ups in global transportation, communications, and financial sectors

Global Equity Strategy: Bouncing off Lows, China Perking Up

Our outlook remains neutral for global ex-U.S. markets while horizontal consolidation continues on the MSCI ACWI ex-U.S. index.  In today’s report we take a bottoms-up view on developed ex-U.S. equities, highlighting stocks that present attractive buy opportunities within the Communications, Health Care, Manufacturing, Materials, Technology, Transportation, and Utilities Sectors

Our outlook remains neutral for global ex-U.S. markets while horizontal consolidation continues on the MSCI ACWI ex-U.S. index.  In today’s report we take a bottoms-up view on developed ex-U.S. equities, highlighting stocks that present attractive buy opportunities within the Communications, Health Care, Manufacturing, Materials, Technology, Transportation, and Utilities Sectors

Bottoms-Up View on Developed Markets: Actionable Stocks, Part 2

Corrections across global ex-US markets continue to limit attractive investment opportunities from both a price and relative strength perspective.  We provide a recap and outlook for global equity markets and highlight individual opportunities across various markets within the Health Care, Communications and Transportation sectors.

Corrections across global ex-US markets continue to limit attractive investment opportunities from both a price and relative strength perspective.  We provide a recap and outlook for global equity markets and highlight individual opportunities across various markets within the Health Care, Communications and Transportation sectors.

Global Strategy: Carnage Continuation Amid Turkey Turmoil and US Dollar Breakout

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>FirstGroup's Board rejected a 118p + up to 45.6p contingent payment. PUSU deadline is 23 June, and can be extended with the consent of the Panel. </li>
<li>Infrastructure funds have put their sight on UK buses due to predictable revenues and a friendlier regulatory framework. The Board of FirstGroup is aware and should seek higher value.</li>
<li>I Square could bid a more palatable 166.8p/share: 144p/share (8.2x EV/Fwd EBIT, average of StageCoach and Go-Ahead transactions), plus 22.8p/share (50% discount to the maximum contingent payout). Long.</li>
</ul>


FirstGroup's Board rejected a 118p + up to 45.6p contingent payment. PUSU deadline is 23 June, and can be extended with the consent of the Panel. 
Infrastructure funds have put their sight on UK buses due to predictable revenues and a friendlier regulatory framework. The Board of FirstGroup is aware and should seek higher value.
I Square could bid a more palatable 166.8p/share: 144p/share (8.2x EV/Fwd EBIT, average of StageCoach and Go-Ahead transactions), plus 22.8p/share (50% discount to the maximum contingent payout). Long.


I Squared/FirstGroup: Looming PUSU Deadline

<ul>
<li>Although Gerrard Bidco offers a 1500p package (likely settlement on 2 September), the shares are trading c. 6% above in the expectation of a counteroffer.</li>
<li>At 7.7x EV/Fwd EBIT, consideration is below the 8.6x EV/Fwd EBIT offered by DWS for struggling rival Stagecoach. FirstGroup is trading at 11.9x EV/Fwd EBIT after rebuffing I Squared Capital Advisors' approach.</li>
<li>I do not believe shareholders will accept the current offer. Kelsian could counterbid up to 1715p (Stagecoach takeout multiple), 14% above current offer (c. 7.3% spread, 42% estimated annual return).</li>
</ul>


Although Gerrard Bidco offers a 1500p package (likely settlement on 2 September), the shares are trading c. 6% above in the expectation of a counteroffer.
At 7.7x EV/Fwd EBIT, consideration is below the 8.6x EV/Fwd EBIT offered by DWS for struggling rival Stagecoach. FirstGroup is trading at 11.9x EV/Fwd EBIT after rebuffing I Squared Capital Advisors' approach.
I do not believe shareholders will accept the current offer. Kelsian could counterbid up to 1715p (Stagecoach takeout multiple), 14% above current offer (c. 7.3% spread, 42% estimated annual return).


Kinetic & Globalvia/Go-Ahead: Recommended Offer

United Kingdom

Stagecoach Group is a British transport group that operates buses and express coaches throughout the United Kingdom. It also previously operated trams and trains. The company provides fully managed transport solutions and is headquartered in Perth, Scotland, having been founded in 1976 as Gloagtrotter.

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Stagecoach (SGC LN)

Global Equity Strategy: Bouncing off Lows, China Perking Up

Concerns over perceived U.S. central bank policy missteps have been somewhat alleviated following dovish takeaways from Fed Chair Powell’s comments...

Vermilion Research

Bottoms-Up View on Developed Markets: Actionable Stocks, Part 2

Our outlook remains neutral for global ex-U.S. markets while horizontal consolidation continues on the MSCI ACWI ex-U.S. index. In today’s report...

Vermilion Research

Global Strategy: Carnage Continuation Amid Turkey Turmoil and US Dollar Breakout

Corrections across global ex-US markets continue to limit attractive investment opportunities from both a price and relative strength perspective. ...

Vermilion Research

I Squared/FirstGroup: Looming PUSU Deadline

Three out of four major London-listed bus operators have attracted private equity interest in recent months. Infrastructure funds seek the stable...

Jesus Rodriguez Aguilar

Kinetic & Globalvia/Go-Ahead: Recommended Offer

The Board recommends Kinetic and Globalvia offer, but the market believes Go-Ahead is worth more. The shares are trading 6% above the consideration...

Jesus Rodriguez Aguilar

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