Vermilion Int'l Compass: Global Equity Strategy
Hong Kong, China Begin To ParticipateWe remain bullish and believe the path of least resistance is higher for global equities in the coming weeks and months. Where it gets difficult is in predicting near-term expectations due to the current overbought conditions based on indicators such as RSI and the percentage of MSCI ACWI stocks above their 50-day MAs. At this stage it is tough to get too excited for additional and significant near-term appreciation because of short-term overbought conditions -- but this is by no means a sell signal. Short-term “overbought†is often an intermediate/long-term bullish signal as a large percentage of MSCI ACWI constituents above their 50-day MAs indicates healthy breadth. Still, there are several opportunities near attractive buy points as various areas of the market take their turn at outperforming.
· Multi-Month Highs For Hong Kong & China. For weeks the only major countries not hitting new highs were Hong Kong and China, which was primarily due to Hong Kong's new China national security laws and the expected global backlash. Trump's treatment of Hong Kong was not nearly as harsh as feared, which paved the way for new multi-month highs for both Hong Kong (Hang Seng) and China (Shanghai Comp., MSCI China). This is yet another concern that has been relieved, which only adds to our bullish global outlook... see charts below.
· Actionable Themes: Global Technology & Asia/Pacific Health Care. Technology remains our favorite Sector globally as it continues to be long-term leadership. The same can be said of Asia/Pacific Health Care. Technology and Health Care have been taking a breather while other down-and-out cyclical value Sectors play catch-up. As a result we are seeing timely buy opportunities within global Technology and Asia/Pacific Health Care -- add exposure/remain overweight... see page 2 and pages 4-7.
· Actionable Themes: Consumer Discretionary & Additional Opportunities. The MSCI ACWI Discretionary vs. Staples ratio is breaking out to 18-year highs and remains in an uptrend. This is what we would expect to see in a bull market as the consumer pulls the economy out of a recession -- add exposure to Discretionary stocks. We also highlight several additional opportunities within Energy, Financials, Transportation, Staples, and Services... see page 3 and pages 7-13.
Aier Eye Hospital Group Co.,Ltd. is a China-based ophthalmic medical institution. The Company is mainly engaged in ophthalmic diseases treatment, surgical services and medical optometry. The Company mainly provides corneal refractive surgery, cataract operation, anterior segment operation, posterior segment operation and optometry services. The Company mainly operates its business in domestic market, with Central China as its main market.
All About is mainly engaged in the provision of information services through internet website under the name "All About." Co. operates in four business segments. Advertisement segment is engaged in the distribution of advertisements, including traffic advertisements, impression advertisements, editorial advertisements and advertisements for sponsor sites. Style Store segment sells various kind of products. Profile segment is engaged in the provision of specialist information and advice. Financial Service segment offers securities, life insurance and non-life insurance services to individual investors and corporations.
BlackBerry is engaged in the sale of smartphones and enterprise software and services. Co.'s operating unit organizational structure consists of the Devices business, Enterprise Solutions and Services (which includes Professional Cybersecurity Services), BlackBerry Technology Solutions, and Messaging. Co. also operates in the embedded market through licensing of its QNX software products and providing services to support customers in developing their products. Co.'s portfolio of products and services is focused on serving enterprise customers, particularly in regulated industries and select vertical markets, including government, financial services, legal and healthcare.
Celltrion is engaged in the manufacturing of chemicals for printed circuit board. Co.'s products include plated through hole chemicals, electromagnetic interference chemicals, and macro-Etchant.
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.
EVOC Intelligent Technology Company Limited is principally engaged in the research, development, manufacture and distribution of Special Computer products and the trading of electronic products and accessories. The Company operates its business through two segments: Research, Development, Manufacturing and Distribution of Special Computer Products and Trading of Electronic Accessories segment and Sales of Development Properties segment. The Company's subsidiaries include Shenzhen EVOC Software Technology Company Limited, Shenzhen EVOC Xinteer Technology Company Limited and Shanghai EVOC Intelligent Technology Company Limited.
Hapvida Participacoes e Investimentos SA (Hapvida) is a Brazil-based holding healthcare company. The Company and its subsidiaries main activities are the coverage of costs of medical, hospital and dental care of its associates, the provision of medical, hospital and dentistry services and examinations and diagnoses per image. Hapvida has different healthcare facilities such as hospitals, clinics or diagnostic imaging units. The Company operates in the Northeast of Brazil, in more than 10 states such as Alagoas, Amazonas, Bahia, Pernambuco, Rio Grande do Norte, Sergipe, among others.
Meito Sangyo is mainly engaged in the manufacture and sale of food products. Along with its subsidiaries and associated companies, Co. operates in three business segments: food, chemical, and real estate. Co.'s principal products include chocolates, candies, ice creams, baumkuchens, jellies, powdered beverages and canned beverages; and pharmaceuticals and enzymes such as "Dextran" and "Dextran derivatives." Co. along with its subsidiary, is engaged in the operation of golf courses and the leasing of real estate properties. As of Mar 31 2017, Co. has its plants in Aichi, Tokyo and Fukuoka Prefectures and its leasing properties in Aichi and Fukuoka Prefectures.
Nomura Real Estate Holdings is a holding company. Residential Development segment is engaged in the development and sale of condominiums and detached houses primarily in the Tokyo metropolitan area. Leasing segment is engaged in the development, construction, leasing and management of commercial facilities and office buildings. Investment Management segment provides real estate investment management, advisory and agency services. Property Brokerage and CRE segment provides residential and commercial real estate brokerage services. Property and Facility Management segment is engaged in the management and maintenance of condominiums, office buildings and educational facilities.
OBIC Business Consultants is an information technology ("IT") company. Along with its affiliates, Co. is mainly engaged in the development and sale of business solution technology and IT solution technology. In addition, Co. is involved in the provision of maintenance services and consultation services to corporate clients, the development and sale of software, and the sale of office automation ("OA") equipment and supplies.
Sensortek Technology Corp. SENSORTEK TECHNOLOGY CORP. is principally engaged in the research, design, development and sale of sensing chips. The Company's main products are ambient light sensors, proximity sensors and accelerometer sensors. The Company's products are mainly used in smart phones, tablets and consumer products. The Company distributes its products primarily in the Asian market.
Sino Biopharmaceutical is an investment holding company and an integrated pharmaceutical enterprise. Through its subsidiaries, Co. is engaged in the research and development, production and sale of a range of Chinese medicines and chemical medicines. Co.'s segments include: the Chinese medicines and chemical medicines, which comprises the manufacture, sale and distribution of Chinese medicine products and western medicine products; the investment, which is engaged in long term investments; and the others, which comprises of Co.'s research and development sector that provides services to third parties related healthcare and hospital business.
Sony is engaged in the development, design, production, manufacture, offer and sale of various kinds of electronic equipment, instruments and devices for consumer, professional and industrial markets such as network services, game hardware and software, televisions, audio and video recorders and players, still and video cameras, mobile phones, and semiconductors. Co. is engaged in the development, production, manufacture, and distribution of recorded music and the management and licensing of the words and music of songs as well as the production and distribution of animation titles. Co. is also engaged in the production, acquisition and distribution of motion pictures and television.
T. Hasegawa is engaged in the production, export, import and sale of fragrances, flavors, aromatic chemicals, food additives, and foods. Co.'s fragrances are mainly used for perfumes, skin-care products, hair-care products, and body-care products, bath additives, detergents, fabric softeners, air freshener and other household products. Co.'s flavors are mainly used for beverages, frozen desserts, other desserts, confectioneries, chewing gum, dental cleaning products, instant and retort pouch foods, and animal feed. Co. operates in three business segments: Japan, Asia, and the U.S.
Top choice Medical Investment Co.,Inc. is a China-based company engaged in the provision of healthcare service. The Company mainly operates through the segment of oral healthcare service. The Company operates its businesses primarily in domestic market, with Zhejiang province as its major market. The Company operates various oral healthcare hospitals, including Hangzhou Dental Hospital, Hangzhou Chengxi Dental Hospital and Ningbo Dental Hospital. The Company is also engaged in the in vitro fertilization (IVF) service business.
Start Today is mainly engaged in the electronic commerce ("EC") business. Along with its subsidiaries, Co. operates in three principal businesses: ZOZOTOWN, B to B, and FURIMA. The ZOZOTOWN business operates brand's online shop on ZOZOTOWN by handling their inventory on a consignment based contract. Co. also purchases fashion items from brands and resell them on each brand's online shop on ZOZOTOWN. Additionally, Co. purchases/resales used fashion products from/to its users. The B to B business supports the brands to operate their individual online stores. The FURIMA business offers users a smartphone application called "ZOZO FURIMA" to sell and purchase personal fashion items.
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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