Report
Dave Nicoski ...
  • Ross LaDuke
EUR 217.56 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Stick with leadership: U.S., EM, and Hong Kong

Amid the continued heightened volatility and consolidation, global support levels continue to hold and our long-term bullish outlook remains intact. Stick with outperforming markets: U.S., EM, and Hong Kong.

• MSCI ACWI internals remain healthy. The MCSI ACWI price and advance-decline (A-D) line uptrends remain intact. This positive breadth signal helps support our bullish outlook... see below

• Hong Kong and EM remain leadership, maintain overweights; Within EAFE, favor small-caps. EM relative strength is advancing to yet another new high vs. the MSCI ACWI, and the Hang Seng almost perfectly duplicates EM's price and RS trends. Maintain EM and Hong Kong overweights. Small-caps are leading within EAFE and offer attractive price and relative strength trends... see below and page 2

• Europe: overweight Tech. Support levels are holding in Europe, and we maintain our constructive view on an absolute basis. European Tech names are leading global Tech stocks higher. We highlight actionable stocks... see pages 3-6

• Japan: Support continues to hold; Health Care and Consumer Discretionary are outperforming. Trading above the important 1,700 support level since Feb. 6th, the TOPIX First Section Index continues to provide an opportunistic entry point. Japanese Health Care and Consumer Discretionary stocks are leadership. We highlight actionable stocks within these Sectors... see pages 7-11
Underlyings
Alpen

Alpen is engaged in the manufacture and retail of ski equipment and other sporting goods equipment including golf, tennis, marine sports baseball, leisure goods, as well as sports casual clothing and dietary supplements. As of June 30 2017, Co. operates 60 "SPORTS Alpen" stores, 201 "GOLF5" stores, 150 "SPORTS DEPO" stores, 13 "Mift" stores, as well as 2 "Alpen Fitness Club" fitness clubs, 11 "Alpen Quick Fitness Club" direct stores and 22 "Alpen Quick Fitness Club" franchise stores. In addition, Co. is engaged in the credit card business, as well as the operation of fitness clubs, ski resorts and golf courses.

Ams AG

AMS provides advanced sensor and analog solutions for high value and emerging markets. Co.'s markets include Consumer and Communications and Industrial, Medical, Automotive. Co. delivers a broad range of innovative technology solutions for consumer electronics and communication device manufacturers including intelligent light sensors, MEMS microphone ICs, NFC solutions, active noise-cancelling ICs and ultra-low power management solutions. Co. offers customized, application-specific integrated circuits and standard solutions for a broad range of industrial applications including automation and control, position sensors, building automation, security and high-resolution seismic analysis.

As One Corp.

As One is mainly engaged in the wholesale of scientific equipment and apparatuses. Along with its subsidiaries, Co. operates in two business divisions: research and industrial equipment, and hospital and nursing care. Co. is involved in the wholesale of equipment and apparatuses used by researchers and technicians to scientific equipment dealers, the provision of product catalogs to dealers including the import and sale of laboratory apparatuses; and the wholesale of equipment and apparatuses used by nurses and nursing care professionals to medical and nursing care institutions.

Asics Corporation

ASICS is a sporting goods manufacturing group engaged in the manufacture and sale of a wide variety of sporting goods. Some of Co.'s products include sports shoes, including running shoes, walking shoes, fitness shoes and work shoes, sportswear and accessories, running watches, and other sports related good and equipment. In addition, Co., through its subsidiaries, is engaged in the manufacture and sale of HAGLOFS brand outdoor equipment. Co.'s businesses are divided into six business segments: Japan, Americas, Europe, Oceania/Southeast and South Asia, and East Asia.

ASM International N.V.

ASM International is an equipment supplier mainly to the semiconductor manufacturing industry. Co. designs, manufactures and sells equipment and services to its customers for the production of semiconductor devices, or integrated circuits. Co.'s front-end segment manufactures and sells equipment used in wafer processing, encompassing the fabrication steps in which silicon wafers are layered with semiconductor devices. Co.'s back-end segment manufactures and sells equipment and materials used in assembly and packaging, encompassing the processes in which silicon wafers are separated into individual circuits and subsequently assembled, packaged and tested.

ASML Holding N.V.

AVEVA Group plc

Aveva Group is a holding company. Through its subsidiaries, Co. is engaged in the licensing of the rights to use its software products directly to end users and to a lesser extent indirectly through resellers. Co.'s services consist primarily of consultancy, implementation services and training, and are performed under separate service arrangements. Co.'s products are most applicable in industries that include Oil and Gas, Marine, Power, Petrochemical and Chemical, and other markets such as AEC Fabrication, Paper and Pulp, Mining and Pharmaceuticals.

Daito Pharmaceutical

Daito Pharmaceutical is mainly engaged in the manufacture and sale of pharmaceutical products. Co. is engaged in the manufacture, purchase and sale of raw materials for manufacturing of pharmaceuticals, and formulations for OTC drugs and medical drugs such as generic drugs. Co. is also engaged in the provision of contract manufacturing service of medical products for major domestic pharmaceutical companies as well as overseas pharmaceutical companies. In addition, Co. provides health foods and quasi-drugs. Co.'s principal products are gastrointestinal medicine under the names of "Ace Plus" and "Iskit," and cold medicine under the name of "Kaze White Capsule."

Descente Ltd.

Descente is the parent company of a group engaged in the manufacture and sale of sportswear and related products. Co.'s primary products include clothing, footwear, accessories and related products for golf, ski, snowboard, basketball, volleyball, swimming, football, cycling, running, tennis, as well as other outdoor activities. Co.'s principal brand names include "Descente," "le coq sportif," "arena," "umbro," "Munsingwear," "shiseist," "AIR TO GROUND A-SEVEN," "SKINS," "LANVIN SPORT," "CUTTER & BUCK," "Calvin Klein golf," "Inov-8," "SKINS," "Marmot," "Babolat," "SRIXON," "AVIA," and "ryka."

Eiken Chemical Co. Ltd.

Eiken Chemical is mainly engaged in the manufacture and sale of diagnostic reagents. Along with its subsidiary, Co. is engaged in the manufacture and sale of immunology and serological reagents, microbiological reagents, clinical chemistry reagents, molecular genetics, medical devices, POTC devices, and medical equipment. In addition to clinical diagnostics, Co. provides microbiological reagents and equipment for food and environmental inspections. As of Mar 31 2017, Co. maintains two plants & research laboratories in Tochigi, Japan and has a consolidated subsidiary in China.

Globant SA

Hexagon AB Class B

Hexagon is engaged in the provision of integrated design, measurement and visualization technologies. Co. has two segments: measurement technologies, which consist of Geosystems that captures, processes and stores position-related information, Metrology, which provides manufacturing evaluation, process qualification and final parts inspection, and Technology, which provides engineering software as well as geospatially powered solutions; and Other Operations, which focuses on the transportation industry in the car and heavy vehicle segments. The Other Operations conducts its business in the Nordic region.

Hexindo Adiperkasa

PT Hexindo Adiperkasa Tbk is an Indonesia-based company primarily engaged in distributing heavy equipment and its spare parts. It trades a range of heavy equipment for general construction, forestry and mining industry, such as excavators, crawler dozers, rigid dump trucks and backhoe loaders, among others. The heavy equipment it offers comprises those under the brand names Hitachi, John Deere and Bell. It also offers other services such as training, maintenance and repair services as well as heavy equipment leasing, financing and remanufacturing. It has branches and representative offices across Indonesia, including Banda Aceh, Medan, Jakarta, Semarang, Balikpapan, Samarinda, Jayapura, Makassar, Palu and Kendari, among others.

INFINEON TECHNOLOGIES AG

Infineon Technologies is a semiconductor manufacturing company. The Automotive segment designs, develops, manufactures and markets semiconductors for use in automotive applications. The Industrial Power Control segment designs, develops, manufactures and markets semiconductors for the generation, transmission and economy in the use of electrical energy. The Power Management & Multimarket segment designs, develops, manufactures and markets semiconductors for power supplies, mobile devices and mobile phone network infrastructures. The Chip Card & Security segment designs, develops, manufactures and markets semiconductor-based security products for card applications and networked systems.

Japan Wool Textile Co. Ltd.

The Japan Wool Textile and its affiliates are mainly engaged in the manufacture and sale of textiles. Co.'s primary products include wool/cashmere/silk/nylon/polyester yarns and fabrics; school and company uniforms; wool upholstery fabrics, carpet yarns, and blankets; and wool felts for industrial materials. In addition, Co. is involved in the design, manufacture, and sale of industrial equipment; the development and management of real estate; the construction and sale of housings; the operation of sports, leisure and nursing care facilities, and restaurants; and the manufacture and sale of consumer goods.

Kinaxis Inc.

Kinaxis Inc. is a Canada-based company that provides cloud-based, software-as-a-service (SaaS) solutions. The Company's subscription software enables its customers to analyze and make decisions across their supply chain operations. Its solutions include sales and operations planning, integrated project management, live lens, capacity planning (Constraints), capacity planning (CRP), demand planning, order fulfillment, inventory management, inventory planning and optimization, self-healing supply chain, aggregate supply planning, distribution requirements planning, master production scheduling, supply action management, supplier collaboration and engineering change management. The Company serves various industries, such as aerospace and defense, automotive, consumer products, industrial and life sciences.

Kyowa Hakko Kirin Co., Ltd.

MEDRx

Medrx Co Ltd. Medrx Co., Ltd. is a Japan-based Company principally engaged in the research and development of pharmaceutical products. The Company produces new medicines based on percutaneous absorption formulation technology. The Company has pharmaceutical formulation technology, including percutaneous absorbent technology of ionic liquid transdermal system (ILTS) using characteristics of ionic liquid, and percutaneous absorbent technology of nano-sized colloid transdermal system (NCTS) using Nano colloidization technology of drug. Based on the technology, The Company aims to maximize drug efficacy, reduce side effects, prevent forgetting to drink, and to administer to patients who are difficult to orally administer, and to produce medicines with new added value.

Nordic Semiconductor ASA

Nordic Semiconductor is a fabless semiconductor company which designs, sells and delivers integrated circuits and related intellectual property for use in short-range wireless applications. Co. is engaged in ultra-low power wireless solutions, based on its proprietary 2.4 Gigahertz Radio Frequency and Bluetooth Smart technology. Co.'s components are manufactured by subcontractors and sold through electronics distributors to manufacturers of branded electronics across a range of product categories. These categories include personal computer and tablet accessories, sports/health monitors, mobile phone accessories, media remote controls, home and industrial automation, and other applications.

Paramount Bed Holdings

Paramount Bed Holdings is a holding company mainly engaged in the manufacture and sale of beds for medical and welfare use. Through its subsidiaries and associated companies, Co. is engaged in the manufacture and sale of medical beds, mattresses, furniture for hospital room use, as well as medical equipment and fixtures. Co. is also involved in the inspection, repair, sterilization, maintenance and leasing of beds and mattresses, the rental and wholesale of welfare equipment, as well as the operation of non-life insurance agents. Co. operates its businesses through its subsidiaries in Japan and overseas including Singapore, Indonesia, China, India, Vietnam, Thailand, Mexico and Brazil.

STMicroelectronics NV

STMicroelectronics is a global independent semiconductor company that designs, develops, manufactures and markets a broad range of semiconductor integrated circuits (“ICs”) and discrete devices. Co. offers a diversified product portfolio and develops products for a wide range of market applications, including automotive products, computer peripherals, telecommunications systems, consumer products, industrial automation and control systems. Within its diversified portfolio, Co. is focused on developing products that leverage its technological strengths in creating customized, system-level solutions with digital and mixed-signal content.

Towa Pharmaceutical Co. Ltd.

Towa Pharmaceutical and its subsidiaries are mainly engaged in the manufacture and sale of in-houses pharmaceuticals, as well as the sale of other companies' products. Co. offers medical products, addressing the full gamut of diseases for which generic medicines are used. Co.'s principal products include cardiovascular and respiratory drugs, neurotropic and anti-allergic drugs, gastrointestinal drugs, antibiotics and chemotherapeutic drugs, hormone drugs, vitamins, other metabolism drugs, Chinese medicines and other drugs. The distribution routes of prescription drugs in Japan are twofold: through major wholesalers and through sales offices and agents.

Ubisoft Entertainment SA

Ubisoft Entertainment is an international independent developer, publisher & distributor of video games. Co. centers its business activities on developing, publishing & distributing video games for portable & home consoles, the PC, smartphones & tablets in both physical & online formats: high-definition with games for Xbox 360, PlayStation®3 & PC; casual with games for Nintendo®, KINECT & PlayStation®3 Move; and online for on-line games. Co.'s catalogue includes various types of games: Action/Adventure, Shooters, Sports, Strategy, Simulation, TV and Movie licenses, Games for everyone and Driving. Co.'s trademarks include Assassin's Creed®, Rainbow Six® Vegas 2, and Rayman Raving Rabids®.

UNITED ARROWS LTD.

United Arrows is a retail apparel group based in Japan. Co. is engaged in the operation of select shops that market a broad mix of designer brand products procured both in Japan and overseas, private label brand men's and women's clothing and accessories as well as miscellaneous items. Co. operates shops under the names of "United Arrows, " "Beauty & Youth United Arrows," "United Arrows green label relaxing," "Another Edition," "Jewel Changes," "Odette e Odile United Arrows," "Boisson Chocolat," "DRAWER," "EN ROUTE," and others. Co. maintains 18 distinct store brands and approximately 360 stores throughout Japan and Taiwan.

Wix.com Ltd.

Wix.com develops and markets an internet service that allows users to create web content. Co. is a global web development platform enabling businesses and organizations to take their businesses, brands and workflow online. Co.'s core product is the Wix Editor, a drag-and-drop visual development and website editing environment complete with high quality templates, graphics, image galleries and fonts. With Co.'s platform, Wix registered users can create and manage a professional quality digital presence tailored to their business and brands' specific look and feel that is accessible across all major browsers and the most widely used desktop, tablet and mobile devices.

Yamaha Corporation

Yamaha is engaged in the manufacture and sale of musical instruments and audio equipment. Musical Instruments segment offers pianos, digital musical instruments, wind instruments, string instruments, percussion instruments, soundproof rooms and music production software. The segment also operates music schools. The segment is also engaged in the music publishing and distribution, music production, concert and event production and other music-related activities. Audio Equipment segment offers audio products including AV receivers, sound bars, wireless streaming amplifiers, speakers and professional audio equipment, as well as USB conference speakerphones and audio conference systems.

Provider
Vermilion Research
Vermilion Research

Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.

Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.

Analysts
Dave Nicoski

Ross LaDuke

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