Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>This is our first report on chemicals player, Westlake Corporation.</li><li>The company's fourth quarter and full year 2023 results present a mixed picture.</li><li>While there are significant positives, like record income from operation and an increase in sales volume, there are also notable downsides, such as a sharp decline in profitability in the European base epoxy business.</li></ul>

This is our first report on chemicals player, Westlake Corporation.The company's fourth quarter and full year 2023 results present a mixed picture.While there are significant positives, like record income from operation and an increase in sales volume, there are also notable downsides, such as a sharp decline in profitability in the European base epoxy business.

Westlake Corporation: Initiation Of Coverage - Positive Caustic Soda Outlook & Other Major Drivers

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>Atkore's key products retained their unusually high prices last quarter, resulting in another strong quarter and raised guidance.</li>
<li>But key PVC prices are starting to weaken with the resumption of production in the US Gulf Coast.  Prices will fall much further.</li>
<li>Record high margins will contract meaningfully.  Estimates and valuations continue to be unrealistic leading us to maintain our short.</li>
</ul>


Atkore's key products retained their unusually high prices last quarter, resulting in another strong quarter and raised guidance.
But key PVC prices are starting to weaken with the resumption of production in the US Gulf Coast.  Prices will fall much further.
Record high margins will contract meaningfully.  Estimates and valuations continue to be unrealistic leading us to maintain our short.


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

iShares MSCI Emerging Markets / Technical Analysis

<ul>
<li>The bullish outlook we initiated in early November 2023 remains intact. The SPX and QQQ still refuse to close below their 20-day MAs/21-day EMAs for more than 2-3 consecutive days.</li>
<li>Even if/when they do, important supports are close by, including 4983-5050 on the S&amp;P 500 and $425-$433 on QQQ (gap supports from 2/22/24). Anything above 4800 SPX is a buy.</li>
<li>We continue to get an ever-increasing number of global indexes/Sectors with long-term breakouts, the latest being the MSCI Emerging Market and Frontier indexes. Clearly risk-on behavior.</li>
</ul>


The bullish outlook we initiated in early November 2023 remains intact. The SPX and QQQ still refuse to close below their 20-day MAs/21-day EMAs for more than 2-3 consecutive days.
Even if/when they do, important supports are close by, including 4983-5050 on the S&amp;P 500 and $425-$433 on QQQ (gap supports from 2/22/24). Anything above 4800 SPX is a buy.
We continue to get an ever-increasing number of global indexes/Sectors with long-term breakouts, the latest being the MSCI Emerging Market and Frontier indexes. Clearly risk-on behavior.


Long-Term Breakouts for Emerging and Frontier Markets; Treasury Yields and Commodities Rising YTD

US Treasury (10 Yr Generic) / Technical Analysis

<ul>
<li>Our bullish outlook initiated on November 7, 2023 remains intact; this intermediate-to-long-term outlook is likely to stay in place as long as 4800 support holds on the SPX (7-10% downside).</li>
<li>To be clear, we aren't calling for a pullback to 4800; we view it as a worst-case scenario for the S&amp;P 500, and we want to be prepared for anything.</li>
<li>Shorter-Term, we remain bullish on the S&amp;P 500 and Nasdaq 100 (QQQ) as they both refuse to close below their 20-day MAs for more than 2-3 consecutive days.</li>
</ul>


Our bullish outlook initiated on November 7, 2023 remains intact; this intermediate-to-long-term outlook is likely to stay in place as long as 4800 support holds on the SPX (7-10% downside).
To be clear, we aren't calling for a pullback to 4800; we view it as a worst-case scenario for the S&amp;P 500, and we want to be prepared for anything.
Shorter-Term, we remain bullish on the S&amp;P 500 and Nasdaq 100 (QQQ) as they both refuse to close below their 20-day MAs for more than 2-3 consecutive days.


Downgrading Real Estate to Underweight; Bullish Outlook Intact; Broadening Participation

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>After <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener"><strong>Boral (BLD AU)</strong></a> rejected <a href="https://www.smartkarma.com/entities/seven-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener"><strong>Seven Group (SVW AU)</strong></a>'s $6.50/share Offer in 9 June 2021, Seven bumped to $7.30 cash if they got to 29.5%, and $7.40 if 34.5%.</li>
<li>Seven reached 29.5% by July 1, 34.5% less than a week later, then 52.65% on the 15 July, and at the close of the Offer (29 July 2021), held <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02401391-2A1312716" target="_blank" rel="noopener">69.6%</a>.  </li>
<li>Seven, now holding 71.6%, has made a cash/scrip Offer for shares not owned, with certain tendering thresholds triggering more cash. Terms are best &amp; final.</li>
</ul>


After Boral (BLD AU) rejected Seven Group (SVW AU)'s $6.50/share Offer in 9 June 2021, Seven bumped to $7.30 cash if they got to 29.5%, and $7.40 if 34.5%.
Seven reached 29.5% by July 1, 34.5% less than a week later, then 52.65% on the 15 July, and at the close of the Offer (29 July 2021), held 69.6%.  
Seven, now holding 71.6%, has made a cash/scrip Offer for shares not owned, with certain tendering thresholds triggering more cash. Terms are best &amp; final.


United States

Westlake Chemical Corporation manufactures and markets basic chemicals, vinyls, polymers, and fabricated products.  The Company serves a range of consumer and industrial markets, including flexible and rigid packaging, automotive products, coatings, and residential and commercial construction.

Westlake Chemical (WLK US)

Westlake Corporation: Initiation Of Coverage - Positive Caustic Soda Outlook & Other Major Drivers

This is our first report on chemicals player, Westlake Corporation. The company's fourth quarter and full year 2023 results present a mixed...

Baptista Research

Atkore Inc (ATKR): Stay Short

An Atkore short provides great opportunity created by a spike in product prices which will be resolved over the coming quarters. Estimates and...

Eric Fernandez, CFA

Long-Term Breakouts for Emerging and Frontier Markets; Treasury Yields and Commodities Rising YTD

Long-Term Breakouts for Emerging and Frontier Markets $EEM $FM; Bullish Outlook Intact on $SPX $QQQ; Treasury Yields and Commodities Rising YTD has...

Vermilion Research

Downgrading Real Estate to Underweight; Bullish Outlook Intact; Broadening Participation

Downgrading Real Estate to Underweight; Bullish Outlook Intact on $SPX $QQQ $NDX $IWM $RTY $IJH $MDY $VXF; Broadening Participation (NYSE Net New...

Vermilion Research

Seven Group Reloads On Boral (BLD AU)

I think there is enough here to get this to compulsory acquisition. Currently trading a gross spread of 2.7% to the full terms (implied $6.25...

David Blennerhassett