Report
Dave Nicoski ...
  • Ross LaDuke
EUR 234.15 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

The MSCI ACWI and ACWI ex-US have managed to break above their respective 200-day moving averages, providing further evidence that global equities are going through a bottoming process.

• Remain overweight China which is leading global equities higher. RS uptrends remain intact for the Shanghai Composite and MSCI China indexes. In today's report we highlight a number of actionable charts Chinese companies, focusing on less-exploited price patterns... see page 2.

• EAFE small- vs large-cap ratio exhibits early signs of bottoming. We view the potential bottom for the MSCI EAFE small- vs. large-cap ratio as an indication that global risk appetites are improving. A reversal in this ratio gives credence to the belief that global equities are bottoming... see page 3.

• Japan continues to lag. Japan (TOPIX) is the primary culprit holding back MSCI EAFE relative to other broad MSCI indexes (ACWI, ACWI ex-US, and EM). Additionally, the Japanese small- vs. large-cap ratio remains in favor of large-caps... see page 3.

• Europe showing further improvement. Cyclical Sectors within Europe are improving in terms of price and RS (including Sectors highlighted below). Even European banks exhibit EARLY signs of potential bottoms... see page 4.

• Actionable Sectors. Supportive of a bottoming global market, cyclical Sectors are emerging as leadership. In today's report we highlight attractive and actionable stocks within Materials, Manufacturing, and Technology... see pages 5-15.
Underlyings
AF Gruppen ASA

Kilen Brygge ASSandakerveien 99B KSAF Gruppen ASA is a contracting and industrial company. Through its subsidiaries, Co. is engaged in property, building, civil engineering, environment, and energy businesses in Norway, Sweden, Poland, and the United Kingdom. Co. has divided the business into five operating segments: Civil Engineering, Building, Property, Environment and Energy.

ASML Holding N.V.

Auto Trader Group PLC

Auto Trader Group operates a digital automotive marketplace. Consumers can search from around 450,000 used cars and 6,000 new cars on the marketplace each month, using a standard make/model search or via discovery search if they aren't sure of the exact vehicle they want. In addition, Co. provides consumers services to help them make an informed decision about the car they are looking to buy, these include: vehicle check, finance, and insurance. Co. also provides free vehicle valuations providing both a private sale price as well as a part-exchange price. Furthermore, Co. provides retailers display advertising packages so they can promote their business as well as individual vehicles.

BE Semiconductor Industries N.V.

BE Semiconductor Industries N.V. (Besi) is a holding company. The Company is engaged in the development, manufacturing, marketing, sales and service of semiconductor assembly equipment for the global semiconductor and electronics industries. It operates through three segments: Die Attach, Packaging and Plating. It develops assembly processes and equipment for leadframe, substrate and wafer level packaging applications in a range of end user markets, including electronics, computer, automotive, industrial and solar energy. The Company offers products, such as Die attach equipment, which include single chip, multi-chip, multi module, flip chip, thermo-compression bonding (TCB) and enhanced wafer level ball grid array (eWLB) die bonding systems, and die sorting systems; Packaging equipment, which include wafer level molding and singulation systems, and Plating equipment, which include metal plating systems and related process chemicals.

Beijing New Building Materials Public Limited Company Class A

Beijing New Building Materials Public is engaged in the manufacture, provision of technical development, technical services and technical training services of new building materials, new wall materials, chemical products, decoration materials, energy technology and products, machinery-electrical equipment for building materials, and new building materials houses; and sale of after developed product, metal materials, construction materials, lumbers, mining products, hardware, chemical materials, light industry materials, building machinery, and environmental-protection energy-saving products

BYD Electronic (International) Co. Ltd.

BYD Electronic (International) is an investment holding company. Through its subsidiaries, Co. is engaged in the manufacturing of handset components and modules. Co. also provides design and assembly services for handsets to its customers. Co. provides handset manufacturers of different brands with such services as the manufacture of such handset components as casings, structural parts, and modules, as well as complete handset design and assembly. Co. also provides such services as design, parts manufacturing and assembly for manufacturers of other electronic products.

CGN Nuclear Technology Development (A)

China Dalian International Cooperation (Group) Holdings is engaged in the international project contracting; international labor cooperation; real estate development and construction; ocean transportation; pelagic fishing; international trade; and foreign and domestic investment. Through its subsidiaries, Co. is also engaged in selling commercial buildings; breeding and selling puffer fishes and other aquatic products; processing seafood; ship management; international oceanic cargo transport; acting as shipping agency; and research and development of bio-technology and products. Co. carries out its business in the People's Republic of China, Europe, America, Africa and Australia.

China Communications Construction Co. Ltd. Class H

China Gezhouba Group Company Limited Class A

China Gezhouba Group is engaged in undertaking of water conservancy and hydropower engineering project; exploration, design and installation of route, embankment, bridge, airport, transmission line and other construction engineering projects; manufacture and installation of electromechanical equipment; manufacture and repair of ship; manufacture of metal structure pressure container and low-voltage switchgear; manufacture, sale and export of cement, binder, welding rod, marble, phosphorus, carbon and other chemical products; provision of transportation and tourism services; lease of property; and investment and development of hydropower station, water conservancy and transportation projects.

China Jushi Co. Ltd. Class A

China Fiberglass is engaged in the research, manufacture and sale of new building material; development and management of commercial real estate; and provision of logistic services. Through its subsidiaries, Co. is engaged in the manufacture and sale of fiberglass and its products, composite materials, engineering plastics and its products, fiberglass chemical raw materials, special-purpose equipment for fiberglass, cement sand bricks and telegraph pole; provision of technical consultancy services; wholesale and retail of ceramics, building materials and decoration materials; and export of self-produced products and technologies.

China Nuclear Engineering Corporation Limited Class A

China Nuclear Engineering & Construction Corporation Limited is a contractor of national defense industry engineering projects. The Company is mainly engaged in military engineering, nuclear power engineering, and industrial and civil engineering construction. Its military engineering include defense industry projects in fields, such as industry, aerospace, aviation, ships and weapons, among others. Industrial and civil construction projects include projects in petrochemicals, energy, metallurgy, building materials, housing construction, municipal and infrastructure, among others.

Dialog Semiconductor plc

Dialog Semiconductor is engaged in creating and marketing mixed signal integrated circuits for personal, portable, hand-held devices, low energy short-range wireless, LED solid-state lighting and automotive applications. Co. has four segments: Mobile Systems, which includes its power management and audio chips for the wireless systems markets; Automotive and Industrial, which markets products that address the safety, management and control of electronic systems in cars and for industrial applications; Connectivity, with activities that include short-range wireless, digital cordless, Bluetooth and VoIP technology; and Power Conversion, which includes its AC/DC converter solutions.

Dongjin Semichem

Dongjin Semichem is engaged in the manufacture of electronic materials for flat panel display, printed electronics and touch screen. Co.'s products include photo resists, bottom anti-reflective coatings, top coating materials, chemical mechanical planarization slurries, etchants, thinners, strippers and flat panel displays.

Guangdong Anjubao Digital Technology (A)

Guangdong Anjubao Digital Technology Co Ltd. Guangdong Anjubao Digital Technology Co., Ltd. is a China-based company principally engaged in the design, manufacture, sale and provision of services of community security systems. The Company's main products include building conversational systems, intelligent household systems, burglar alarm systems, parking systems, monitoring systems, cable systems and Liquid Crystal Display (LCD) screens, among others. The Company's products are mainly used in new residential communities. The Company distributes its products mainly in domestic market.

Guangdong Ellington Electronics Technology (A)

Guangdong Ellington Electronics Technology Co.,Ltd. is a China-based company principally engaged in the research, development, manufacture and sale of printed circuit boards (PCBs). The Company's main products include double-sided, four-layered, six-layered, eight-layered and above PCBs. The Company's products are mainly used in communications equipment, consumer electronics, automotive electronics, computers and industrial control industries. The Company distributes its products in domestic and to overseas markets.

HeidelbergCement AG

HeidelbergCement is engaged in the production and distribution of cement and aggregates, concrete and building products. Co.'s product range is complemented by downstream activities, such as ready-mixed concrete, concrete products, and concrete elements; in some countries, asphalt and building products, such as bricks and roof tiles, lime, or sand-lime bricks, are also manufactured. Furthermore, Co. provides services such as worldwide trading in cement and coal by sea. Co.'s products are used for the construction of houses, infrastructure, and commercial and industrial facilities.

Hexatronic Group AB

Hexatronic Group AB is a Sweden-based company engaged in the production of electronic and technical solutions. The Company's products are divided into three categories, namely Network, which offers solutions for both fiber and copper systems, such as Small Firm-factor Pluggables (SFP), Customer Premises Equipment (CPE), switches, converters, patchcords and pigtails, fanouts, attenuators, jacks and telesplitters, among others; Components, which includes cables, connectors, high power Light Emitting Diodes (LEDs) and relays, among others, and Site Solutions, which includes products, such as distribution boxes, fiber optic terminal boxes, cross-connection cabinets, fiber splice closure flats and soft cable fixing panels, among others. Its subsidiaries include Proximon AB and Tele & Datanat Fiberoptik i Orebro AB, both active in fiber optic technology.

Justsystems Corporation

Justsystems is a global software provider in office productivity, information management, and consumer and enterprise software. Co.'s principal products and services are xfy, XMetal (consisting of six applications: XMetaL Author, XMetaL Author DITA Edition, XMAX - XMetaL for ActiveX, and XMetaL Reviewer), ConceptBase, ATOK, and Ichitaro. xfy's flexible XML-based application platform fully supports standardization, integration and security of business information to help users make sense of the glut of complex, disjointed information found in typical organizations.

LafargeHolcim Ltd.

LafargeHolcim is a producer of cement and aggregates. Co. also supplies ready-mix concrete, concrete products, asphalt and a range of services. Co. operates through three segments: cement, aggregates, and other construction materials and services. Co.'s cement segment provides a range of cementitious materials and also develops customized blends for special applications. Through its aggregates segment, Co. produces aggregates which include crushed stone, gravel and sand mainly used in the manufacture of ready-mix concrete, concrete products and asphalt, as well as for road building and railway tracks, with production centered on quarrying, preparing and sorting the raw material.

LandMark Optoelectronics

LandMark Optoelectronics Corporation is a Taiwan-based company principally engaged in the manufacture and sales of wired communications machinery and electronic components. The Company's main products include laser semiconductor chips and detector semiconductor chips. The Company is also involved in the international trading of semiconductor chips. The Company distributes its products in domestic market and to overseas markets, including mainland China, the United States and others.

Marshalls plc

Marshalls and its subsidiaries are engaged in the manufacture and supply of landscape, driveway and garden products using a range of materials including concrete, natural stone, iron, steel, wood, glass and polyurethane, to the domestic and public sector and commercial end markets. Co. operates its own quarries and manufacturing sites throughout the United Kingdom, including a national network of manufacturing and distribution sites. Products are distributed from this network of sites either to customers' depots or, at their request, direct to site.

Merry Electronics Co. Ltd.

Merry Electronics is engaged in the manufacture, modification, repair, sale, design and export of electric appliances, video and audio electronics products, wireless communication machinery, computer, consumer electronics products, auto control system, digital fire alarm system, and related electronics components. Co.'s main products include speaker systems, microphones, portable hands free and headsets.

Monadelphous Group Limited

Monadelphous Group provides construction, maintenance and industrial services to the resources, energy and infrastructure sectors. Co. has two operating divisions working predominately in Australia, with overseas operations in New Zealand, China, Papua New Guinea, Mongolia and the U.S. The Engineering Construction division provides large-scale multidisciplinary project management and construction services. The Maintenance and Industrial Services division focuses on the planning, management and execution of mechanical and electrical maintenance services, front-end scoping, shutdowns, fixed plant maintenance services, access solutions, mine dewatering services and sustaining capital works.

Mycronic AB

Micronic AB provides production solutions for manufacturing electronics products. Co. has two business areas. Surface Mount Technology provides production equipment and solutions for mounting components on circuit boards, an indispensable part in electronics products. Co. provides surface mount machines, software, automated storage solutions and peripheral equipment that handle all types of components and circuit boards. Pattern Generators provides production equipment and solutions for manufacturing of electronics products. Co. provides two types of pattern generators: mask writers for the manufacturing of photomasks and direct writers for the manufacturing of substrates.

Parade Technologies

Parade Technologies is a fabless semiconductor company based in Taiwan. Co. designs, develops and sells display and interface solutions for computing, consumer and handset markets. Co.'s product portfolio includes timing controllers, converters, repeaters, MUX, DeMUX, level shifters and other related solutions. Applications for Co.'s products include desktops, notebooks, monitors, tablets, smartphones and other consumer electronics and display panels.

Shanghai Tunnel Engineering Co. Ltd. Class A

Shanghai Tunnel Engineering is engaged in the undertakings of civil engineering construction projects, tunnel and urban construction roads and bridges, traffic, fire control and underground works; self-operation and acting as agent for import and export of various commodities and technologies; processing of imported materials; operation of counter trade and entrepot trade, approved international economic and technical cooperative businesses; manufacture, installation and leasing of machineries and equipments; provision of car repair services and internal transportation; and the building of branch offices.

Skellerup Holdings

Skellerup Holdings and its subsidiaries operate two main operating segments: Agri and Industrial. The Agri segment manufactures and distributes dairy rubberware which includes milking liners, tubing, filters and feeding teats, together with other related agricultural products and dairy vacuum pumps to global agricultural markets. The Industrial segment manufactures and distributes technical polymer products across a number of industrial markets, including construction, infrastructure, automotive, mining and general industrial, together with industrial vacuum pump equipment for a variety of industrial applications worldwide.

Tangshan Jidong Cement Co. Ltd. Class A

Tangshan Jidong Cement is engaged in the manufacture and sale of cement and cement clinker; and the exploration and sale of limestone. Through its subsidiaries, Co. is also engaged in the manufacture and sale of plastic woven bags and other plastic products, dry starch building material, concrete admixture, cement grinding aid, irrigate helping material and other additives; the provision of automobile transportation service; repair of automobile; wholesale and retail of automobile parts; provision of system internal training and technology services; design of building material project; and road transportation.

Tekfen Holding

Tekfen Holding conducts its operations in four main business segments: Contracting, Agriculture, Real Estate and Other operations. Contracting group focuses on construction of petroleum and gas facilities, land and sea terminals, offshore platforms and tank farms. Agricultural group has operations in chemical fertilizer, ground and vegetable grain, production, distribution and trade of seedling and sapling. Real estate group operates in designing, constructing, renting, and sale of real estates such as residents, offices, shopping centers and hotels. Operations of other segment comprise of light-pulp trading, cotton yarn production and trading, insurance services and holding operations.

THK Co. Ltd.

THK is mainly engaged in the manufacture and sale of components for industrial equipment and transportation vehicles. Along with its subsidiaries and associated companies, Co. manufactures and sells machinery equipment components such as linear motion systems, actuators, and other industrial machinery and equipment. Co.'s principal products include linear motion guide, linear motion actuator, linear ball slide, flat roller, slide rail, ball spline, ball screw, screw nut, change nut, double-row angular contact ring, cross roller ring, lubricating accessories, among others.

Tokai Carbon Korea

Tokai Carbon Korea Co Ltd. TOKAI CARBON KOREA CO., LTD. is a Korea-based company mainly engaged in the manufacturing and distribution of carbon products for semiconductor industry. The Company's product portfolio consists of silicon wafers and semiconductor materials. The Company's silicon wafers include high purified graphite for semiconductors and solar batteries, and silicon carbide (SiC) coated products and semiconductor materials. Its semiconductor materials include SiC wafers, wafer carriers, carbon and carbon composites, glassy carbons and silicon cathode electrodes. The Company also imports and sells heat exchangers and heaters. The Company distributes its products within domestic market and to overseas markets.

TPI Polene PCL

Win Semiconductors Corp.

WIN Semiconductors is principally engaged in the research, development, manufacture and sale of gallium arsenide waters. Through its subsidiaries, Co. is also engaged in the market research; receive retail and customer orders from European, North America and Australia regions; and other investment activities. Co.'s major products include power amplifier and radio frequency switch chips used in mobile communication devices such as smartphones. Co. distributes its products primarily in domestic and overseas market, including Asia, Europe and the Americas.

Xuji Electric (A)

XUJI ELECTRIC CO., LTD. is a China-based company mainly engaged in electrical equipment business. The Company's business is engaged in the manufacturing of electrical machinery and equipment, and provides comprehensive technical, product and service support for clean energy production, transmission, distribution and efficient use. The Company focuses on the five core businesses of Ultra High Vacuum, smart grid, new energy, electric vehicles, rail transportation and industrial intelligence. Products are widely used in various links of the power system. The Company's products are mainly divided into six categories: intelligent power distribution systems, direct current power transmission systems, intelligent medium-voltage power supply equipment, smart meters, intelligent charging and replacing systems for electric vehicles, and EMS processing services. The Company mainly operates its business in the domestic market.

Zhejiang Narada Power Source (A)

ZHEJIANG NARADA POWER SOURCE Co. , Ltd. is a China-based company principally engaged in the construction of data centers and Internet infrastructure, as well as the provision of power systems and power solutions. The Company operates its business through the provision of motive power, reserve power and specialty batteries with a range of integrated services and systems. The Company's main products include valve-regulated sealed batteries, lithium ion batteries and recycled lead products, among others. The Company distributes its products in domestic market and to overseas markets.

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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