Insights: Bullish EAFE Stocks
• Today's report is a bottom-up compilation of technically attractive EAFE stocks, with one fundamental kicker: each name is accompanied by positive momentum in their FY EPS estimates... see screen on pages 2-7• We screened for stocks whose latest EPS estimate is higher than last week's, which in turn is greater than the prior month's estimate. From this list, which was rich in relative leaders, we picked out the names that were either (1) breaking out from, or (2) pulling back to base support levels... see charts on pages 8-25
• Group themes present in this screen:
o Metal Miners: Steel, copper, and other metal miners are extending last year's gains. Long-term charts continue to paint a bullish outlook for names like Nippon Steel (5401), BHP (BHP-AU), & Antofagasta (ANTO-GB).
o Energy: Energy continues to lead alongside the Financial Sector. And recent weakness has produced a long list of pullback opportunities, including Royal Dutch Shell (RDSA-NL), Inpex (1605-JP), & Repsol (REP-ES).
o Autos: The bullish auto theme is a global theme. In the U.S., GM is inflecting higher; in EM, TTM is recovering; and in Europe and Japan--the focus of this report--names like Daimler (DAI-DE), Peugeot (UG-FR), & Fuji Heavy (7270-JP) are breaking out. We originally recommended European autos in our Dec. 8 Int'l Insights.
o Macau Casinos: One of our favorite themes (originally recommended last July). Names like Galaxy Entertainment (27-HK), MGM China (2282-HK), and SJM Holdings (880-HK)--all of which depict EPS estimate momentum--are beginning to rebound near established support levels. This theme is still in the early stages.
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voestalpine is engaged in the production, processing, and distribution of materials made of steel and in research and development in the areas of metallurgy, metal processing, and materials technology. Co.'s steel division focuses on the production and processing of flat steel products. Co.'s special steel division is involve in tool steel and high-speed steel. Co.'s metal engineering division is engaged in turnout technology, rails and treated wire, and tubes. Co.'s metal forming division is involve in tube products and precision strip steel as well as pre-finished system components. Co.'s other activities include heavy plate production, a foundry, and a number of downstream processes.
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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