Vermilion Compass: Weekly Equity Strategy
Key Points:• We remain constructive on the overall market, as breadth continues to expand while the defensive parts of the market are correcting and underperforming.
• Our overweight recommendations are: Energy, Materials, Manufacturing,
Transportation, Technology, and Financial Sectors.
• We recommend underweights in: Utilities, Consumer Staples, Communications, and Health Care Sectors.
• Market weightings recommended in Consumer Discretionary and Services Sectors.
• The dollar is pulling back in typical fashion after breaking topside a major base. Conversely, gold has formed a short-term bottom, but the gold stocks are acting better than the precious metal.
• We believe the gold stocks should work as the Fed/Trump want potentially inflationary forces to surface in a strong economy.
• We highlighted the Auto Manufacturers and Auto Dealers last week, and we are reiterating that call here. Ford and General Motors both look interesting despite their dissimilar charts. Our favorites in the Auto Dealers Group are KMX, AN, and LAD.
• The Gold Groups and stocks are outperforming the precious metal, but that is to be expected as they are more leveraged to gold price moves. We highlight several Gold Groups and stocks within the report.
• Also, we are starting to see bottoms and accumulations from a bottom-up perspective in the secondary health care stocks. Several pages in this report are dedicated to illustrate this.
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Agnico-Eagle Mines is a gold mining company with mining operations in Canada, Mexico and Finland. Co. earns a proportion of its revenues from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of byproduct metals. The revenue from byproduct metals is mainly generated by production at the LaRonde mine in Canada (silver, zinc, copper and lead) and the Pinos Altos mine in Mexico (silver).
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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