Report
Dave Nicoski ...
  • Ross LaDuke
EUR 240.20 For Business Accounts Only

Int'l Insights: Bullish Stocks

Concerns over perceived central bank policy missteps have been somewhat alleviated following dovish takeaways from Fed Chair Powell's comments, proclaiming interest rates are “just below” the neutral rate, and reminding everyone that future rate hikes are not predetermined. While this is certainly an incrementally positive development, it does not completely remove the specter of future rate hikes from our list of concerns. Of course, trade remains an issue despite optimism surrounding the Trump/Xi meeting at the G20 summit this week. Therefore, our outlook remains cautious and we expect consolidation to continue as global equities enjoy a bounce off of recent lows. Ultimately, we will need to see more definitive signs of bottoming throughout Europe, Asia, and the U.S. before getting positive on global equities.

• Norway deteriorating: We are tapping the brakes on our longstanding overweight call on Norway due to the multi-year uptrend breakdown for the Oslo OBX... see page 2.

• China turning the corner; Brazil and Hungary attractive. We highlight three EM countries that display positive developments... see pages 3-4.

• Attractive Sectors, actionable stocks. Our int'l Transportation Sector is experiencing steady RS improvements with the decline in oil prices. Within Financials, insurance stocks are leadership. Additionally, many telecom stocks within our Communications Sector are bottoming in terms of price and RS... see pages 5-6.
Underlyings
Air France-KLM SA

Air France-KLM is a holding company. Through its subsidiaries, Co. is engaged in transporting passengers and cargo, aeronautics maintenance and other air-transport related activities, including catering and charter services. Co. operates in six geographical regions: Metropolitan France; Europe (except France) and North Africa; Caribbean, French Guiana and Indian Ocean; Africa, Middle East; Americas, Polynesia; and Asia and New Caledonia. Co. organizes its business around the following four segments: Passenger, providing passenger transportation services on scheduled flights; Cargo, transporting freight on flights and selling cargo capacity to third parties; Maintenance, and Other activities.

Alliance Aviation Services

Alliance Aviation Services is engaged in the provision of aircraft charter services for mining and energy companies. Co. provides fly-in-fly-out services, which include the air transportation of workers and contractors to and from different locations; ad hoc charter services, which including air charters services for corporate and government customers; and Co. also provides aircraft, crew, maintenance and insurance or wet leasing services to a third party.

Auckland International Airport Limited

Auckland International Airport provides airport facilities and supporting infrastructure in Auckland, New Zealand. Co. and its subsidiaries have three reportable segments: Aeronautical, which provides services that facilitate the movement of aircraft, passengers and cargo, and provides utility services that support the airport; Retail, which provides services to the retailers within the terminals and provides car parking facilities for airport staff, visitors and passengers; and Property, which is engaged in the rental of space on airport land outside the terminals including cargo buildings, hangars and stand-alone investment properties.

Bangkok Expressway and Metro Public Company Limited

Bangkok Expressway and Metro Public Company Limited is a Thailand-based company engaged in construction and operation of the expressway, as well as management and operation of Mass Rapid Transit (MRT) system business. For expressway business, the Company operates expressway networks and provides related services. The Company's expressway projects include Si Rat expressway, Udon Ratthaya expressway and Si Rat expressway - Bangkok Outer Ring Road. For MRT business, the Company operates train services and MRT stations for the MRT Chaloem Ratchamongkhon line, as well as involves commercial development business. It provides commercial spaces for rental in MRT stations including Khlong Toei, Sukhumvit, Phetchaburi and Phra Ram 9. The Company is also engaged in the provision of parking area and advertising media services. The Company's subsidiaries include Northern Bangkok Expressway Company Limited and Bangkok Metro Networks Limited.

BB Seguridade Participacoes SA

BB Seguridade Participacoes is an insurance group based in Brazil. Co. maintains two partnerships with Spanish group Mapfre, operating in the areas of rural, housing, auto and P&C segments. In pension plan solutions, Co. has a partnership with Principal Financial Group. In the premium bonds segment, Co. operates through Brasilcap Capitalizacao, in a partnership with Brazilian Icatu Group. Co. also holds the controlling interest in BB Corretora, which sells products exploring banking channels through an exclusive contract signed with Banco do Brasil.

Canadian National Railway Company

Canadian National Railway, together with its wholly-owned subsidiaries, is engaged in the rail and related transportation business. Co.'s network of approximately 20,000 route miles of track spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico. Co.'s network and connections to all Class I railroads provide access to all three North American Free Trade Agreement nations. Co. handles and carries cargo, serving exporters, importers, retailers, farmers and manufacturers. Co. is engaged in the movement of a portfolio of goods, including petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, intermodal and automotive.

Canadian Pacific Railway Limited

Canadian Pacific Railway operates a transcontinental railway in Canada and the U.S. Co.'s business mix includes bulk commodities, merchandise freight and intermodal traffic, serving the principal business centers of Canada from Montreal, Quebec, to Vancouver, British Columbia, and the U.S. Northeast and Midwest regions. As of Dec 31 2016, Co. operated on a network of approximately 12,400 miles of track, of which CP owns 10,800 miles and has access to 1,600 miles under trackage rights and lease agreements. Of the total mileage operated, about 5,600 miles were located in western Canada, 2,000 miles in eastern Canada, 4,400 miles in the U.S. Midwest and 400 miles in the U.S. Northeast.

Cargojet

Cargojet, Inc is an unincorporated opened-ended limited purpose trust. Co. was created to invest in Cargojet Holdings Ltd. Co. provides domestic and trans-border air cargo services in addition to aircraft handling and aircraft and airport ground equipment fueling services through its Fixed Base Operations ("FBO") business at the Hamilton International Airport.

CCR S.A.

CCR SA is a Brazil-based company primarily engaged in the operation of highways. The Company's activities are divided into five business segments: Highways, which manages and maintains toll roads through numerous concessions, such as AutoBAn, ViaOeste, NovaDutra, RodoNorte, SPVias, Ponte, ViaLagos, RodoAnel Oeste and Renovias; Passenger transportation, which includes subway concessions, such as ViaQuatro and Metro Bahia; Sea transportation, which holds concession for regular lines of sea passenger transport under the CCR Barcas brand name; Airports, which manages airport concessions, and Services, which includes other holding and operating activities, such as shared services center, engineering services and data transmission via underground fiber optic cables. The Company's highways network is located in the states of Sao Paulo, Rio de Janeiro and Parana, Brazil.

Chemical Works of Gedeon Richter Plc

Chemical Works of Richter Gedeon is a multinational pharmaceutical company that is engaged in the research, development, production and marketing and trade of pharmaceutical products. Co.'s activities are divided into two major business segments: Pharmaceutical, including research, development and manufacturing of pharmaceutical products; and Wholesale and Retail including wholesale and retail trade through the distribution chain as well as marketing of its products. Co. is primarily engaged in production of gynecological, cardiovascular and gastroenterological products, antibiotics, antimicotics, OTC and medicines for treatment of the central nervous system.

Cosan Logistica SA

Cosan Logistica SA, also known as Cosan, is a Brazil-based company engaged in the rail transport business sector. The Company's portfolio includes businesses in logistics, distribution of gas and fuels, energy cogeneration, production of sugar and ethanol, production and distribution of lubricants and base oils, and land management. The Company offers freight trucks transporting cargo at the clients' plants, owns plants producing sugar, ethanol and electricity from biomass, which is sold via the sea freight. Sugar and ethanol for exportation reach port terminals by trucks, pipes and railway. Cosan has numerous subsidiaries from contracts with the Brazilian National Development Bank (BNDES).

CTT - Correios de Portugal SA

CTT Correios de Portugas, S.A. operates through the following companies: CTT Expresso, Postal services and Logistics, which specializes in courier services, urgent mail and merchandise; Mailtec, which addresses the needs of management of written communication between suppliers and customers ensuring the production of physical and hybrid mail and the electronic management of documents; Payshop, which enables the payment of several services and utilities through a national network of more than 4,000 agents; PostContacto Advertising Mail, which provides services related to the distribution of advertising mail; and Tourline Express, which focuses on courier service and urgent mail transport.

DB INSURANCE CO. LTD

Dongbu Insurance is engaged in insurance services including fire, underwriting marine and aviation, engineering, comprehensive, long-term savings type and personal pension insurance.

Guangxi Wuzhou Communications (A) (SC SH)

Guangxi Wuzhou Communications is engaged in the operation and toll collection of road and bridge; investment and management of harbor and dock transportation equipment; real estate development; and construction materials, construction and engineering machinery equipment, hardware and general merchandise businesses. Through its subsidiaries, Co. is engaged in the investment and management of logistics infrastructures construction; provision of international freight service, storage, transportation load and unload service, customs declaration service and import export trading agency; and sale of spare parts for automotive vehicle.

Harel Investments & Finance

Harel Insurance Investments is a holding company which is based in Isreal. Through its subsidaries, Co. is engaged in various aspects of the insurance business including health insurance, accident insurance, life insurance, optical insurance, organ transplant insurance, dental insurance and vehicle insurance. Co. also operates in the pension and provident fund market and has secondary activity (through subsidiary companies) in the capital market, income generating real estate and communications activity. Co.'s activity in the health insurance sector, including marketing, operations, etc. takes place through the health insurance departments at Harel Insurance and Dikla.

Helvetia Holding Ltd

Helvetia Holding is a holding company. Through its subsidiaries, Co. is an all-lines insurance group which operates in many life and non-life business segments as well as in reinsurance. In the life segment, Co. offers product lines, such as life insurance, pension plans and annuities. The non-life segment offers property, motor vehicle, liability and transport insurance policies as well as health and accident insurance coverage. Other activities refer to the reporting of the non-underwriting activities of Co.'s service, distribution and real estate companies.

Hong Kong Exchanges & Clearing Ltd.

Hong Kong Exchanges and Clearing is an exchange controller under the Securities and Futures Ordinance. Co. operates recognised stock and futures markets in Hong Kong. Co. also operates Hong Kong Securities Clearing Company Limited (HKSCC), HKFE Clearing Corporation Limited (HKCC), The SEHK Options Clearing House Limited (SEOCH) and OTC Clearing Hong Kong Limited (OTC Clear). HKSCC, HKCC and SEOCH provide clearing and settlement services, while OTC Clear provides OTC interest rate derivatives and non-deliverable forwards clearing and settlement services. Co.'s operating segment include: cash, equity & financial derivatives, commodities, clearing, and platform & infrastructure.

Hyundai Marine & Fire Insurance Co. Ltd.

Hyundai Marine & Fire Insurance is engaged in non-life insurance businesses including fire, marine, flight, casualty, long-term insurance and automobiles.

JAPAN POST HOLDINGS Co. Ltd.

Japan Post Holdings is engaged in the provision of a variety of products and services, mainly its postal, banking and insurance products and services, which represent Co.'s three core businesses (Japan Post Co., Japan Post Bank Co. and Japan Post Insurance Co.) that operate through its nationwide post office network. Co.'s principal business segments are Postal & domestic logistics, Financial Window, International Logistics, Banking, Life Insurance, and others. Co. maintains a network of 20,158 post office locations, covering all of Japan's cities, towns, and villages. These post offices serve as bases for various postal, banking, and insurance services that are offered by the group.

JAPAN POST INSURANCE Co. Ltd.

Japan Post Insurances is a life insurance company based in Japan within the Japan Post Group of companies. Co. provides its customers with reliable insurance services, serving individual customers through Japan Post's nationwide network of post offices and corporate customers through sales offices directly managed by the group. Co. is engaged in the collection of insurance premiums and the payment of insurance benefits and various other procedures. Co. maintains business activities through a regional network of approximately 20,050 post offices, 599 contracted post offices and 82 Japan Post Insurance branches as of Mar 31 2017.

Keio Corporation

Keio is mainly engaged in the transportation business. Route of Co.'s train is constructed by "Keio Line" originating from Shinjuku Station and "Inokashira Line" originating from Shibuya, extending to western part of Tokyo and northern Kanagawa Prefecture, with total length of 84.7 km and 69 railway stations as of Mar 31 2017. Co. is engaged in the operation of railroads, buses and taxis, department stores, shops, station kiosks and shopping centers; the sale and lease of real estates; and the operation of restaurant, sports facilities and hotels, as well as general building management and automobile maintenance.

Lancashire Holdings Limited

Mainfreight Ltd.

Mainfreight is engaged in the global supply chain logistics. As of Mar 31 2015, Co. had business operating in 242 branches in 20 countries around the world. Co. operates in the domestic supply chain (moving and storing freight within countries) and air and ocean freight industries (moving freight between countries). New Zealand, Australia, The Americas and Europe are each reported to management as one segment as the businesses there perform both domestic and air and ocean services.

MOL Hungarian Oil & Gas Plc Class A

Magyar Olaj-Es Gazipari is an integrated oil and gas enterprise based in Hungary and active in central and eastern Europe. Co.'s core activities include: exploration and production of crude oil, natural gas and gas products; refining, transportation, storage and distribution of crude oil products in both retail and wholesale markets; importation, transportation, storage and wholesale trading of natural gas and other gas products; and the production and sale of olefins and polyolefins. TVK, the petrochemical affiliate of Co., is an olefin and polyolefin producer in Hungary.

NS United Kaiun Kaisha

NS United Kaiun Kaisha is mainly engaged in the marine business. Co. operates in three business segments. The International Marine Transportation segment is engaged in the vessel leasing business, the sale of shipping equipment, the provision of ship management services, as well as the collection services for ship leasing fees, transportation fares and transportation handling fees. The Domestic Marine Transportation segment is involved in the provision of collection services for ship leasing fees, transportation fares and transportation handling fees. The Others segment is engaged in the land transportation and the real estate leasing, as well as the provision of information services.

Ping An Insurance (Group) Company of China Ltd. Class H

PSG Group Limited

PSG Group is an investment holding company. Through its subsidiaries and associated companies, Co. is engaged in the provision of financial services as well as financial advice and fund management services, financing, banking, private equity and corporate finance services. Co. operates six reportable segments: Capitec, Zeder, Paladin, PSG Konsult, PSG Fund Management and PSG Corporate. Co. operates predominantly in South Africa.

Rumo SA

Rumo SA, formerly ALL America Latina Logistica SA, is a Brazil-based company primarily engaged in the transport and logistics sector. The Company's activities are divided into three business segments: North operations, which includes railway concessions hold by ALL Malha Norte and ALL Malha Paulista; South operations, which comprises railway concessions hold by ALL Malha Sul and ALL Malha Oeste, and Container operations, which focuses on the railway freight transportation of containers. The Company offers transportation of agricultural commodities, fuel and final goods, intermodal freight transport, integrated warehousing services, port operations and handling of merchandises, among others. In addition, it develops logistics projects for newly created businesses in the industrial and agricultural commodities industry.

Sakai Moving Service Co. Ltd.

Sakai Moving Service is mainly engaged in the provision of automobile transportation services for general cargo for individual and companies. Along with its subsidiaries, Co. is involved in the moving business, the provision of related services including the sale of consumable goods for relocation and other products, the manufacture and sale of packaging materials, the provision of electric work services, and the operation of recycle shops. Co. maintains five regional headquarters in Miyagi, Tokyo, Aichi, Osaka and Fukuoka prefectures as of Mar 31 2017.

SG Holdings Co. Ltd.

Sinotrans Air Transportation Development Co. Ltd. A

Sinotrans Air Transportation Development is engaged in the provision of international airfreight forwarding, domestic cargo transportation, air express delivery services and comprehensive logistics services. Other services provided by Co. include cargo canvassing, distribution and booking; charter flight; warehousing; transshipment; international multi-modal transport; cargo loading and unloading; freight fee settlement; custom clearance and inspection; provision of consultation, exhibition, technical intercommunication and assets management services; and industrial investment.

Stagecoach Group plc

Stagecoach Group is a holding company. Through its subsidiaries, Co. operates in four main divisions: U.K. Bus (regional operations), which connects communities in more than 100 towns and cities across the U.K. on bus networks stretching from the Highlands of Scotland to south west England; U.K. Bus (London), which is an operator in the London bus market; North America, which provides bus and coach transport services in the U.S. and Canada; and U.K. Rail, in which its subsidiary, South West Trains, runs train services in south west England out of London Waterloo railway station, and operates Island Line services on the Isle of Wight.

Swiss Life Holding AG

Swiss Life is a holding company, engaged in providing life insurance and pension solutions and services. Co.'s segments include: Switzerland, France, Germany, International, Asset Managers, and Other. Co.'s Switzerland, France, Germany and International segments primarily consist of life insurance operations and distribution units. The life insurance operations provides a range of life, pension, health, annuity and investment-type policies to both groups and individuals, including disability coverage. Co. focuses primarily on life and pensions in Switzerland, France and Germany and on cross-border business from Liechtenstein, Luxembourg and Singapore.

TFI International Inc.

TFI International is involved in the provision of transportation and logistics services across Canada and the U.S. Co.'s business segments include: Package and Courier, which is involved in the pickup, transport and delivery of items across North America; Less-Than-Truckload, which is involved in the pickup, consolidation, transport and delivery of smaller loads; Truckload, which is involved in full loads carried directly from the customer to the destination, including expedited transportation, flatbed, container and dedicated services; and Logistics, which is involved in the provision of a range of logistics services.

Tokio Marine Holdings Inc.

Tokio Marine Holdings is a holding company undertakes the domestic non-life insurance, domestic life insurance, international insurance and financial and general businesses. Co.'s principal business segments are casualty insurance services, life insurance services, and others. Co. is engaged in the underwriting property and casualty insurance and related investment activities in Japan; underwriting life insurance and related investment activities in Japan; underwriting casualty and life insurance in overseas; and securities investment advisory, securities investment trusts business, derivatives business, staffing business, real estate management business and elderly care business.

Tryg A/S

Tryg is an insurance company, engaged in providing insurance services. Co.'s private segment encompasses the sale of insurance products to private individuals in Denmark and Norway. Co.'s commercial segment encompasses the sale of insurance products to small and medium-sized businesses in Denmark and Norway. Co.'s corporate segment sells insurance products to corporate customers under the brand Tryg in Denmark and Norway, Moderna in Sweden and Tryg Garanti. Co.'s Sweden segment comprises the sale of insurance products to private customers under the Moderna brand. Moreover, insurance is sold under the brands Atlantica, Bilsport & MC, Securator and Moderna Djurforsakringar.

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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