Report
Dave Nicoski ...
  • Ross LaDuke
EUR 45.98 For Business Accounts Only

Vermilion Compass: Weekly Equity Strategy

Downgrading Outlook to Neutral; Upgrading Real Estate and Consumer Staples

We are downgrading our long-term outlook to neutral (had been bullish since early-November 2023) due to rapidly deteriorating market dynamics; we still believe the S&P 500 is going through a 1- to 4-month consolidation phase, but odds have increased that this consolidation phase could be a topping pattern. The S&P 500 is initially holding at our expected pullback zone of 5100-5191 that we discussed last week (7/30/24 Compass), but we are not interested in knife catching or picking a bottom, and we want to see some stabilization and price discovery before adjusting our still-defensive posture. With that said, 5100-5191 remains a critical area of interest where we see the potential for a bounce to occur. This 5100-5191 level represents a 10% pullback from all-time highs, it is a support level of interest from May (May 2nd gap support), and it is also the measured move price target from the 1.5-month head-and-shou
Underlyings
Altria Group Inc

Altria Group is a holding company. The company's subsidiaries include: Philip Morris USA Inc., which is engaged in the manufacture and sale of cigarettes; John Middleton Co., which is engaged in the manufacture and sale of machine-made cigars and pipe tobacco; Sherman Group Holdings, LLC and its subsidiaries, which are engaged in the manufacture and sale of cigarettes and the sale of cigars; and UST LLC, which through its subsidiaries, including U.S. Smokeless Tobacco Company LLC and Ste. Michelle Wine Estates Ltd., is engaged in the manufacture and sale of smokeless tobacco products and wine. The products of the company's tobacco subsidiaries include smokeable tobacco products and machine-made cigars.

British American Tobacco PLC ADS

Brixmor Property Group Inc.

Brixmor Property Group is a holding company and an internally-managed real estate investment trust. Brixmor Operating Partnership LP and subsidiaries (the Operating Partnership) is the entity through which the company conducts substantially all of its operations and owns substantially all of its assets. Through the Operating Partnership, the company is engaged in the ownership, management, leasing, acquisition, disposition and redevelopment of retail shopping centers. The company owns and operates open-air retail portfolios, comprised primarily of shopping centers located in the United States. The company's shopping centers are primarily anchored by retailers, as well as consumer-oriented service providers.

Coca-Cola Consolidated Inc.

Coca-Cola Consolidated distributes, markets and manufactures nonalcoholic beverages. The company's product offerings include both sparkling and still beverages. Sparkling beverages are carbonated beverages and the company's principal sparkling beverage is Coca-Cola. Still beverages include energy products and noncarbonated beverages such as bottled water, tea, ready to drink coffee, enhanced water, juices and sports drinks. The company's sales are divided into two main categories: bottle/can sales and other sales. Bottle/can sales include products packaged primarily in plastic bottles and aluminum cans. Other sales include sales to other Coca-Cola bottlers and post-mix products.

Essential Properties Realty Trust

Essential Properties Realty Trust is an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. The company has assembled a diversified portfolio using an investment strategy that focuses on properties leased to tenants in businesses such as restaurants (including quick service and casual and family dining), car washes, automotive services, medical services, convenience stores, entertainment, early childhood education and health and fitness. The company's property locations are spread across 43 states.

FEDERAL REALTY INVESTMENT TRUST

Four Corners Property Trust Inc.

Four Corners Property Trust is a real estate investment trust (REIT) engaged in owning, acquiring and leasing properties for use in the restaurant and food-service related industries. The company operates in two segments: real estate operations and restaurant operations. The company's real estate operations segment includes leasing restaurant properties to tenants through net lease arrangements under which the tenant is primarily responsible for ongoing costs relating to the properties. The company's restaurant operations segment is conducted through its taxable REIT subsidiary and consists of its Kerrow Restaurant Operating Business.

Getty Realty Corp.

Getty Realty is a real estate investment trust. The company is engaged in ownership, leasing and financing of convenience store and gasoline station properties. The company's properties are operated under a variety of brands including, among others, 76, BP, Citgo, Conoco, Exxon, Getty, Gulf, Mobil, Shell, Sunoco and Valero. The company's properties are concentrated in the Northeast and Mid-Atlantic regions. Most of the company's properties are leased on a triple-net basis primarily to petroleum distributors, convenience store retailers and, to a lesser extent, individual operators.

Jones Soda (US)

Kimco Realty Corporation

Kimco Realty is a self-administered real estate investment trust. The company and its subsidiaries are engaged principally in the ownership, management, development and operation of open-air shopping centers, which are anchored generally by grocery stores, off-price retailers, discounters or service-oriented tenants. Additionally, the company provides complementary services on its retail real estate capabilities. The company's ownership interests in real estate consist of its consolidated portfolio and portfolios where the company owns an economic interest, such as properties in the company's investment real estate management programs, where the company partners with institutional investors and also retains management.

Kite Realty Group Trust

Kite Realty Group Trust is a real estate investment trust. Through its majority-owned subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership, operation, acquisition, development and redevelopment of neighborhood and community shopping centers in selected markets in the United States. The company is involved in the collection of contractual rents and reimbursement payments from tenants at its properties.

National Retail Properties Inc.

National Retail Properties is a real estate investment trust. The company's assets are primarily real estate assets. The company acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment.

Philip Morris International Inc.

Philip Morris International is a holding company. Through its subsidiaries, the company is a tobacco company engaged in the manufacture and sale of cigarettes, smoke-free products and associated electronic devices and accessories, and other nicotine-containing products in markets outside the United States. The company's portfolio comprises international and local brands including Marlboro, which is complemented in the premium-price category by Parliament. The company's other international cigarette brands are Bond Street, Chesterfield, L&M, Lark and Philip Morris. The company also owns various local cigarette brands, such as Dji Sam Soe, Sampoerna A and Sampoerna U in Indonesia, and Fortune and Jackpot in the Philippines.

Primo Water Corporation

Cott, together with its consolidated subsidiaries, is a producer of beverages on behalf of retailers, brand owners and distributors. Co.'s Water & Coffee Solutions reporting segment provides bottled water, coffee and water filtration services to customers in North America, Europe, and Israel, and products include bottled water, coffee, brewed tea, water dispensers, coffee and tea brewers and filtration equipment. Co.'s traditional business (Cott North America, Cott U.K. and All Other reporting segments) produces carbonated soft drinks, shelf stable juice and juice-based products, sparkling flavored waters, energy drinks and shots, sports drinks, and liquid enhancers, among others.

Realty Income Corporation

Realty Income is a real estate investment trust. The company invests in commercial real estate. The company owns a portfolio of properties located in various states, Puerto Rico and United Kingdom.

Regency Centers Corporation

Regency Centers is a real estate company and self-administered and self-managed real estate investment trust. Regency Centers L.P. is the entity through which the company conducts substantially all of its operations and owns substantially all of its assets. The company's business consists of acquiring, developing, owning and operating income-producing retail real estate principally located in various markets in the United States.

Retail Opportunity Investments Corp.

Retail Opportunity Investments is a self-managed real estate investment trust. The company is engaged in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the U.S., anchored by supermarkets and drugstores. The company focuses on leasing to retailers that provide necessity-based, non-discretionary goods and services, catering to the basic and daily needs of the surrounding community. The company conducts substantially all of its business through its operating partnership, Retail Opportunity Investments Partnership, LP, a limited partnership, together with its subsidiaries.

Simon Property Group Inc.

Simon Property Group operates as a self-administered and self-managed real estate investment trust. Simon Property Group, L.P. is the company's majority-owned Delaware partnership subsidiary that owns all of its real estate properties and other assets. The company owns, develops and manages shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets?, and The Mills? in United States as well as internationally including Puerto Rico, Asia, Europe and Canada. The company also owned equity stake in Klepierre SA, a Paris-based real estate company, which owns, or has an interest in, shopping centers in Europe.

Urban Edge Properties

Urban Edge Properties is a real estate investment trust that manages, develops, redevelops, and acquires retail real estate, primarily in the New York metropolitan area. Urban Edge Properties LP is a Delaware limited partnership formed to serve as the company's majority-owned partnership subsidiary and to own, through affiliates, all of the company's real estate and other assets. The company's portfolio comprises of shopping centers, malls and a warehouse park.

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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