Dave Nicoski ...
  • Ross LaDuke
EUR 230.48 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Buoyed by outperformance in the US, the MSCI ACWI is the only broad global index that has yet to make a lower low relative to the lows set in June. This deterioration for ACWI ex-US, EAFE, and EM, continued bearish-leaning indicators, and continued downside volatility in bond yields leads us to remain cautious and concerned that global equities remain vulnerable and could be poised for additional weakness moving forward.

• Additional bearish-leaning developments. In addition to the concerns we have highlighted over the past several weeks, new negative developments continue to plague the global equity landscape. Such new developments include YTD RS highs for global Utilities and Dr. Copper hitting new lows -- both of which are characteristics that would often indicate deteriorating global growth and an equity market that is likely to struggle for gains... see page 2.

• Copper/gold ratio; Global bond yields. The copper/gold ratio often moves in concert with global Treasury yields, and divergences can also indicate a potential turning point in yields. The copper/gold ratio suggests the downtrend in US and Euro yields is showing no signs of letting up. Until we see some stabilization in global yields, equity markets are likely to struggle for gains... see page 3.

• Europe/UK holding above support. Despite weakening internals, Europe and the UK continue to cling to support and are not yet breaking down. Key support levels to watch continue to be 364-365 on the STOXX 600 and 7,080-7,100 on the FTSE 100.

• Actionable Theme: Continue to play defense. Major indexes around the world continue to do next to nothing, making Sector, Group, and stock selection all the more important. We prefer to use a barbell strategy of growth and safety. Attractive and actionable themes highlighted in today's report include IT Services/Tech Software, Communications, Precious Metals, and Utilities... see pages 5-6.
Alma Media Corp


Altium is engaged in the development and sale of computer software for design of electronic products. Co. has three operating segments: Board and Systems Division, which includes results from the PCB design tool business for the Americas, EMEA, Asia Pacific and Emerging Markets regions as well as other products sold through partner channels; Micro-controllers and Embedded Systems, which includes results from the TASKING software solutions sales, operations and research and development; as well as Makers and Content, which includes the results from Co.'s subsidiary, Octopart Inc., which is a provider of electronic parts data and online inventory search.

Asseco Poland SA

Asseco Poland is a provider of proprietary information technology ("IT") solutions which is based in Poland. Co. is engaged in provision of consulting on IT infrastructure, security solutions, human resources solutions, outsourcing services as well as fully comprehensive IT support. Co.'s profile includes software and computer hardware consultancy, production of software as well as supply of software and hardware. This category includes analysing, developing, and programming ready-to-use IT systems. In addition to IT services, Co. also sells goods including mainly computer hardware.

Boralex Inc. Cl A

Boralex is a private electricity producer whose core business is the development and operation of power stations that run on renewable energy. Co. is active in five segement: wind power, hydroelectric, wood-residue thermal power, natural gas thermal power and solar energy.


CESC is engaged in the business of generation and distribution of electricity within the licensed area of 567 sq. km in the city of Kolkata and adjoining areas and does not operate in any other reportable segment. The peak power demand in the licence area is now approximately 1,460 MW, which is met through CESC's internal generation capacities as well as through power purchased from the state and national grid. Power demand, however, fluctuates based on seasonality and the time of the day; the maximum demand for power is usually during the evening hours, with less power needs during rest of the day. The combined generating capacity of Co.'s four plants is 975 MW.

China Yangtze Power (A)

China Yangtze Power is engaged in the generation, operation and investment of hydropower; provision of consultation services on power-generating technologies as well as overhaul and maintenance services for hydropower projects. Through its subsidiary, Co. is also engaged in the investment of high new technology, industrial and securities; provision of investment management and consultation services; property management; greening; advertising; lease of engineering equipment; manufacture, sale and provision of storage of chemical industrial products; and water supply.

Cyfrowy Polsat SA Bhd

DiGi.Com is an investment holding company. Through its subsidiaries, Co. is engaged in the establishment, maintenance and provision of mobile telecommunication and related services; property holding and renting premises.

Global Power Synergy

Global Power Synergy Public Company Limited is a Thailand-based energy company. The Company produces and distributes electricity, steam and water for industrial purposes. The Company and its subsidiaries operate thermal power plants, including Central Utility Plant 1-3 in Rayong province and Sriracha Power Plant in Chonburi Province. The Company and its subsidiaries operate three principal business segments based on technology and market strategies they require, namely independent power producer segment, small power producer segment and very small power producer segment. The Company's subsidiaries include Combined Heat and Power Producing Company Limited, which is involved in the production and distribution of electricity and chilled water; Natee Synergy Company Limited, which operates as a holding company, and IRPC Clean Power Company Limited, which is engaged in the production of electricity, steam and water for industrial purposes.

Glodon (A)

Glodon Co Ltd. GLODON COMPANY LIMITED, formerly GLODON SOFTWARE COMPANY LIMITED., is a China-based software company. The Company's software products can be divided into tool software products and management software products. The Company is also engaged in engineering cost business, engineering construction business, engineering information business and overseas business. The Company's business areas include Beijing, Northern China region, Northeastern China region, Northwestern China region, Central and Southern China region, Eastern China region, Southern China region, Southwest China region and overseas markets.


Informa is a holding company. Through its subsidiaries, Co. is engaged in Global Exhibitions, which organises transaction-oriented Exhibitions and trade shows, providing buyers and sellers across different industries and communities with a platform to meet face to face, build relationships and conduct business; Business Intelligence, which provides specialist data, intelligence and insight to businesses; Academic Publishing, which publishes peer-reviewed scholarly research and specialist reference-led academic content; Knowledge and Networking, which organises content-driven events and programmes that provide a platform for communities to meet, network and share knowledge.


Infosys is a global technology services company based in India. Co. provides business consulting, technology, engineering and outsourcing services. Co.'s end-to-end business solutions include: Consulting and Systems Integration - consulting, enterprise solutions, systems integration and advanced technologies; Business IT Services - application development and maintenance, independent validation services, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management; and Products, business platforms and solutions, including Finacle™, which addresses core banking, mobile banking and e-banking needs of banks worldwide.


Iren is a multiutility company in Italy. The segments in which Co. operates are: Generation and District Heating (hydroelectric energy, co-generation of electrical energy and heat, district heating network and production from renewable sources); Market (sale of electrical energy, gas, heat); Energy Infrastructures (electricity distribution networks, gas distribution networks, liqified and natural gas regasification plants); Integrated Water Service (sale and distribution of water, water treatment and sewerage); Waste Management (waste collection and disposal); and Other services (telecommunications, public lighting, global services and other minor services).


Italgas SpA. Italgas SpA is an Italy-based company active in the natural gas distribution. It operates a national distribution network of about 70,000 kilometers serving more than 7,5 million customers. Its services include also network monitoring, maintenance and digitalization and consume measuring. The Company is active locally.

Itochu Techno Solutions

ITOCHU Techno-Solutions is an information technology ("IT") solution services company based in Japan. Along with its affiliates, Co. operates in five principal business segments: distribution & enterprise, telecommunications, public & regional, finance & social infrastructure, and IT services. Co. is engaged in the comprehensive proposal and sales activities, including consulting to system design, construction, maintenance and operation services; and the joint proposal and procurement focusing on IT infrastructure outsourcing and maintenance and operations. In addition, Co., through its subsidiaries, is engaged in the product procurement, the sale of software, and others.


Kakao is engaged in the provision of Internet services to its users and advertisers. Co. provides its owned and operated online properties and services for its users. Co. provides a range of tools and marketing services designed to enable businesses to reach its users for its advertisers.


Naver is engaged in the Internet industry. Co. operates the search portal, Naver ( the online game portal, Hangame ( the children's portal, Jr.Naver ( and its first online donation portal, Happybean ( Co. along with its search portal, Naver, is engaged in the provision of Internet services to users, advertisers, publishers, and developers. Co. provides its owned and operated online properties and services to Internet users.

NIIT Technologies Ltd.

Niit Technologies Ltd. NIIT Technologies Limited is an information technology (IT) solutions company. The Company is engaged in providing computer programming consultancy and related activities. It is engaged in providing application development and maintenance, managed services, cloud computing and business process outsourcing to organizations in various sectors, such as financial services; insurance; travel; transportation and logistics; manufacturing and distribution; media, and government. It offers various services, which include infrastructure management services (IMS), business process services, system integration and package implementation, intellectual property (IP) asset-based solutions and digital services. It offers various software products, which include AdvantageSuite, COSYS and MonaLisa. Its AdvantageSuite consists of various business components, such as Navigator, Exact and Implementation Framework Suite. Its digital services include digital analytics and digital integration.

Nippon Telegraph & Telephone Corp.

Nippon Telegraph and Telephone and its subsidiaries conduct the following main business activities: regional communications (domestic intra-prefectural communication services and incidental services), principally operated by Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation; long-distance and international communications (domestic inter-prefectural communication services, international communication services and incidental services), principally operated by NTT Communications Corporation; mobile communications, principally operated by NTT DOCOMO, Inc.; and data communications, principally operated by NTT DATA CORPORATION.

Oracle Corp. Japan

Oracle is engaged in the provision of information technology services. New License and Cloud segment is engaged in the licensing services of its database management software, middleware, and application software, as well as providing access to its software and hardware through Oracle Cloud SaaS, PaaS and IaaS offerings. Updates and Product Support segment provides software upgrade and patch, and technical support. Hardware Systems segment offers servers, storage, networking, virtualization software, operating systems and management software to support diverse IT environments, including cloud computing environments. Services segment offers consulting services.


Proximus supplies integrated telecommunications services on the Belgian market. Co.'s activities are divided into four segments: Consumer Business Unit (CBU), which sells voice products and services, internet and television, on fixed and mobile networks, to residential customers; Enterprise Business Unit (EBU), which caters to professional customers; Service Delivery Engine and Wholesale, which centralizes all the network and IT services and costs, provides services to CBU and EBU and sells these services to other telecom and cable operators; and International Carrier Services, which focuses on international carrier activities.

RIB Software AG

RIB Software designs, develops and sells software solutions for the construction industry and provides software maintenance, consulting and support services for its customers. Co. operates in three segments: Licence/Software, which focuses on the sale of software solutions for installation on the customer's hardware as well as on maintenance and support services for customers; Software, which as a service/cloud comprises Co.'s solution provided in the domain of online platforms for tendering and processes, project collaboration, and web services; and Professional Services, which comprises consulting and support services for supporting customers in the implementation of software.

Rocket Internet SE

Rocket Internet SE is a Germany-based company active in the investment management and fund operator industry. The Company identifies, builds, scales and retains ownership of Internet companies. It mainly operates in three sectors: e-commerce, including retail companies in the areas of fashion, general merchandise, home and living, office supplies and food groceries; marketplace, comprising companies active in fields such as real estate, travel, transport and food delivery which offer buyers and sellers venues for direct transactions, among others; and financial technology, containing companies bringing together borrowers and lenders in areas like the consumer and small and medium-sized enterprise segments. As a holding company, Rocket Internet AG holds interests in operating subsidiaries divided into regional Internet groups entailing the geographic regions Africa, Asia Pacific, Latin America and the Middle East. The Company has a controlling interest in HelloFresh GmbH.

Seabridge Gold

Seabridge Gold is a development stage company engaged in the acquisition and exploration of gold properties located in North America.


SEMAFO is engaged in gold mining and related activities, including exploration, development and operations in West Africa. Co. owns and operates three gold mines in Burkina Faso, Niger and Guinea. As of Dec 31 2010, Co.'s proven and probable mineral reserves were 1,155,800 ounces and 1,661,500 ounces, respectively.


Softcat is engaged as a value-added IT reseller and IT infrastructure solutions provider to the corporate and public sector markets.

SSR Mining

SSR Mining is engaged in the acquisition, exploration, development and operation of silver-dominant resource properties located in the Americas. Co.'s strategic focus is to optimize the production of silver from its Pirquitas mine in Argentina, and to advance other principal development and exploration projects including San Luis in Peru, Diablillos in Argentina, and Pitarrilla and San Agustin in Mexico. In addition to its principal projects, Co. holds a geologically-diverse portfolio of other predominantly silver projects in various stages of exploration.

Storytel AB


T-Gaia is an information technology ("IT") company. Along with its subsidiaries and associated company, Co. is engaged in the provision of subscription agency services for mobile phone users to join communication network, and distributes mobile phones to general consumers; and the network communication services, including telephone lines, and support services for fiber to the house ("FTTH") promotion, as well as the mobile contents business for cellular phones, and the cellular phone-related distribution business. In addition, Co. sells electronic payment-related products, such as e-money and international telephones, as well as prepaid cellular phones and prepaid cards.

THQ Nordic AB

THQ Nordic AB Formerly known as THQ Nordic GmbH. THQ Nordic AB is a Sweden-based company engaged in the computer games development. The Company focuses on acquiring, developing and publishing personal computer (PC) and console games for Xbox and PlayStation platforms. The Company's game portfolio consists of owned franchises intellectual property (IP) and published titles, including Darksiders, MX vs. ATV, Red Faction, SpellForce, Titan Quest and The Guild, among others. It offers games through various distribution channels, including digital platforms, such as Stream, PlayStation Store and Xbox Live; marketing via social media, such as Facebook and YouTube; gaming conventions, and global retailers, such as Walmart, Gamestop and Amazon. Its subsidiaries comprise THQ Nordic GmbH, We Sing Company Holding AB, Pieces Interactive AB, Experiment 101 AB and THQ Nordic Mobile AB, among others.


TIS is a holding company mainly engaged in the information and communications businesses. Co. operates three principal business segments: information technology ("IT") infrastructure services, financial IT services, and industrial IT services. Co. is engaged in the provision of self-administered computer utility or system operation services through large IT facilities, including data centers; and the support of clients to use IT in their operations and in the execution of their business activities with IT expertise and business know-how to the finance industry and industrial and public sectors. In addition, Co., through its subsidiaries, is engaged in the real estate business.

Vodafone Group PLC

Vodafone Group provides mobile and fixed telecommunication services including: access charges, voice and video calls, messaging, interconnect fees, fixed and mobile broadband and related services such as providing televisual and music content, connection fees and equipment sales. Co. provides a range of consumer products and services including mobile, fixed voice, broadband and television, financial as well as other services to operators outside its footprint. Co. also provides a range of enterprise products and services including total communications such as mobile, fixed and a suite of converged communications services, internet of things, cloud and hosting and carrier services.

Wisetech Global

WiseTech Global is engaged in providing software solutions to the logistics industry across more than 125 countries. Co. develops, sells and implements software solutions that enable logistics service providers to facilitate the movement and storage of goods and information domestically and internationally. Co.'s customers range from small and mid-sized regional or domestic enterprises to large multi-national companies.

Wolters Kluwer N.V. Cert.

Wolters Kluwer operates through four divisions: Health is a global provider of information for medical and health professionals; Financial & Compliance Services is a U.S. provider risk management, compliance, finance, and audit professionals the services they need to optimize risk and business performance, and ensure compliance with local, regional, and global regulation; Tax & Accounting is a provider of tax, accounting, and audit information, and services; and Legal & Regulatory provides customers with expert content, software, and services in the areas of law, business, and regulatory compliance in Europe, North America and Asia Pacific.


Worldline is a financial transaction processing company based in France. Co's operations are organized along three segments covering payments and digital services: Merchant Services & Terminals (facilitating consumer engagement around end-to-end e-payment transactional services on any device – before, during and after the point of sale); eMobility and eTransactional Services (assists businesses and governments in developing new digital services enabling strategic digital transformation); and Financial Processing & Software Licensing (provides processing services to banks and financial institutions for managing card-based and online cashless payments).


Xero is engaged in the provision of a platform for online accounting and business services to small businesses.

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.

Dave Nicoski

Ross LaDuke

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