Int'l Insights: EM Leadership Screen
Notable themes:• EM Sector Overweights: Led by Tech, cyclicals continue to lead. Consumer discretionary is this year's second-best performing sector, as it stages a swift, relative recovery, reversing last year's underperformance. Financial still exhibit healthy technicals. Lastly, energy and materials are working through a weak spell, both testing key relative strength support levels (see next page).
• King Tech: Tech continues to lead the EM advance. The Sector's relative strength trend is advancing to decade highs. From this week's screen, we like SK hynix (000660-KR), Seoul Semiconductor (046890-KR), Primax Electronics (4915-TW), and Samsung SDI (006400-KR).
• Consumer Discretionary is strengthening: The EM Consumer Discretionary Index's relative strength trend is reversing a 1.5-year downtrend (see next page). Increase exposure.
• Strength in Metal Fabrication Stocks: A repeat recommendation from our last EM screen, metal fabrication stocks continue to screen well. We like Catcher Technology (2474-TW), Bharat Forge (500493-IN), and Mytilneos Holdings (MYTIL-GR).
• Brazil is rebounding. The Bovespa (and EWZ) is rebounding off the 200-day MA following a multi-month correction -- an attractive buy point.
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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.
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