Report
Dave Nicoski ...
  • Ross LaDuke
EUR 46.71 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Chinese Indexes Headed Higher

Global equities (MSCI ACWI, ACWI ex-US, and EAFE) remain bullish with their uptrends intact, and the MSCI Emerging Markets index continues to hold above major support at $52 on the EEM-US. Additionally, Europe's STOXX 50 and Hong Kong's Hang Seng are on the cusp of short-term breakouts, while the major indexes in China (Shanghai Composite & CSI 300) are currently breaking above short-term resistance... see chart below. Considering the absence of breakdowns and the fact that market dynamics remain largely positive, our overall constructive outlook remains appropriate.

Small-Caps Continue to Lead Outside of the US. Global ex-US small-caps continue to lead relative to large-caps, and we are beginning to see RS improvement for small-caps within the US as well. Outperformance from small-caps continues to point to strong risk appetites which is a bullish signal for the broad market... see page 2.
Remain Overweight Cyclical Value. The evidence continues to suggest that value remains leadership and we recommend adding exposure to cyclical value on this minor pullback in the value vs growth ratio (MSCI ACWI ex-US IMI Value vs. Growth)... see page 2.
Actionable Themes: Transportation, Materials, and Services. As highlighted above, cyclical value remains leadership, and Materials and Transportation are two Sectors that benefit from this theme -- remain overweight/add exposure. We also highlight our Services Sector, including several stocks within the value-leaning engineering and construction industry -- add exposure... see pages 3-14.
Underlyings
Constellium SE Class A

Constellium N.V. designs and manufactures a range of innovative specialty rolled and extruded aluminum products, serving primarily the aerospace, packaging and automotive end-markets. Co. has a strategic footprint of manufacturing facilities located in the United States, Europe and China. Co.'s product portfolio commands higher margins as compared to less differentiated, more commoditized fabricated aluminum products, such as common alloy coils, paintstock, foilstock and soft alloys for construction and distribution. Co. organizes its business around three operating segments: Aerospace & Transportation, Packaging & Automotive Rolled Products, and Automotive Structures & Industry.

Detalion Games SA

Gold Fields Ltd. ADS

KIOCL Ltd

KIOCL Ltd is an India-based company engaged in manufacturing iron ore pellets. The Company's products include pellets and pig iron castings. It operates a pellet manufacturing plant in Mangalore, India. Its services include operation and maintenance (O&M) contracts.

Mitsubishi Chemical Holdings Corporation

Mitsubishi Chemical Holdings is a holding company. Co., through its subsidiaries and associated companies are engaged in the manufacture and sale of chemical products, plastic products, and pharmaceuticals. Performance Products segment provides optical films, acetyl, high performance films, aqua solutions, high performance engineering plastics, fibers & textile, advanced polymers, high performance chemicals, and lithium-ion battery materials. Chemicals segment offers methyl methacrylate (MMA), petrochemicals, and carbon products. Industrial Gases segment supplies industrial gasses to a wide range of industries. Health Care segment manufactures and sells ethical pharmaceuticals.

Mitsui Chemicals Inc.

Mitsui Chemical is the parent company of a group engaged in the manufacture and sale of petrochemicals, basic chemicals, urethane, functional polymeric materials, functional chemicals and engineered materials. Co.'s principal products include optical lens materials, medical materials, catalysts, chemical products, agricultural products such as agricultural insecticide, fungicide, soil fumigation disinfectant, ant-repellent and disease prevention agents for use in living environments, as well as petrochemical raw materials, phenols, synthetic fiber raw materials, PET resin, industrial chemicals, polyethylene and polypropylene.

Synthomer PLC

Synthomer is a specialist chemical company and is a supplier of aqueous polymers in markets including coatings, construction, textiles, paper and synthetic latex gloves. Co. produces formulations to support customers in a range of industries from construction and coatings to healthcare. Co.'s products include: Dispersions, which serves the construction, coatings, adhesives and textiles markets; Nitrile Butadiene Rubber, which serves Health and protection markets; Styrene Butadiene Rubber, which serves Paper, carpet and foam markets; and Specialities, which serves specialist markets including automotive, Polyvinyl Chloride manufacture, construction and polymer manufacture.

TopBuild Corp.

TopBuild is an installer and distributor of insulation and other building products to the construction industry. The company's products and services are primarily for residential new construction, commercial construction, and residential repair/remodel activity. The company operates in two segments: installation, which installs various insulation applications that include fiberglass batts and rolls, blown-in loose fill fiberglass, blown-in loose fill cellulose, and polyurethane spray foam; and distribution, which distributes insulation and other building products including rain gutters, fireplaces, closet shelving, and roofing materials through its Service Partners business.

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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