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Won Europe Today

Posted on September 26, 2019September 26, 2019 by Veera Manju

Yesterday,

European markets closed in the red on the back of political developments in the U.S. and Europe. Investors were left worried
after an official impeachment inquiry against the U.S. President Donald Trump was initiated.

The Stoxx 600 recorded a distribution day, taking its count to two. It was down 0.58% with almost all sectors trading in the red. Travel & Leisure, Financial Services, and Oil & Gas were the biggest losers, while Banks ended flat.
Among other major indices, France’s CAC lost 0.79% and recorded a distribution day, taking its count to three. Germany’s DAX was down 0.59% on higher volume.
The U.K.’s trade‐sensitive FTSE ended flat as a result of weakness in the Pound.
Belgium and Luxembourg were the only indices to close in positive territory.
Seven of the seventeen indices that we cover recorded distribution days with Finland being downgraded to an Uptrend Under Pressure from a Confirmed Uptrend after it breached its 200‐DMA.

Won Europe Today

Posted on August 22, 2019August 22, 2019 by Veera Manju

Yesterday,

European markets closed higher with the exception of Luxembourg. The Stoxx 600 was up 1.21% with all sectors in the green – Technology, Autos, and Industrials led the gains.
Autos sector was also boosted by the jump in Renault (RENU.FR; RNO:FP) and Fiat Chrysler (FCA.IT; FCA:IM) shares after an Italian newspaper suggested that merger talks were back on the table.
Germany’s DAX rose 1.30%, France’s CAC 40 gained 1.70%, and the U.K.’s FTSE 100 increased 1.11%, all on lower volume.
We upgraded Ireland and Austria to a Confirmed Uptrend after a follow-through day in those markets.

Global Laggards

Posted on March 28, 2019March 28, 2019 by Cornelio Ash

Highlighted Charts

U.S.: The Chemours Company ( CC ), Aecom Technology ( ACM ), Valmont Industries ( VMI ), Aptiv ( APTV ), Molson Coors Brewing ( TAP ), Halliburton Company ( HAL ), Capital One Financial ( COF ), Henry Schein ( HSIC ), Beacon Roofing Supply ( BECN ), Qurate Retail ( QRTEA ), TE Connectivity ( TEL ), Amdocs Limited ( DOX )

Developed: Upm Kymmene Corporation ( UPM.FI; UPM FH ), Ngk Insulators ( KI@N.JP; 5333 JP ), Mazda Motor ( KO@N.JP; 7261 JP ), Orkla ( ORK.NO; ORK NO ), Equinor ( EQNR.NO; EQNR NO ), RSA Insurance Group ( RSA.GB; RSA LN ), Cochlear ( COH.AU; COH AU ), Seven & I ( SEVI.JP; 3382 JP ), Lawson ( LAWS.JP; 2651 JP ), Infineon Technologies ( IFXX.DE; IFX GR ), Toppan Printing ( PT@N.JP; 7911 JP), Deutsche Lufthansa (LHAX.DE; LHA GR)

Emerging: Hyundai Heavy Industries (HUE.KR; 00950 KS ), Fubon Financial Holdings ( FUB.TW; 2881 TT ), Bim Birlesik Magazalar ( BMI.TR; BIMAS TI )

Stocks worth focusing on in this week’s Global Laggards:

Developed

Cochlear ( COH.AU; COH:AU ) – Health Care; $7.1B market cap – global leader in implantable cochlear hearing devices with ~60% market share.

O’Neil Methodology

The stock gapped down below its 50- and 200-DMA on February 19 following poor H1 FY19 results. We believe the stock can now be shorted following a low volume rally into the 50-DMA.
Technical ratings: RS line at a new low, RS Rating of 48, A/D Rating of D-.

Global Laggards

Posted on March 21, 2019March 27, 2019 by Cornelio Ash

Highlighted Charts

U.S.: Sociedad Quimica Y Minra ( SQM ), Huntington Ingalls Inds ( HII ), Sony Corp American Shrs ( SNE ), Scotts Miracle (

), Halliburton Company ( HAL ), Washington Federal ( WAFD ), Amerisourcebergen Corp ( ABC ), Cracker Barrl Old Cnt St ( CBRL ), Qurate Retail Inc ( QRTEA ), Dave & Buster’s Entmnt ( PLAY ),Juniper Networks ( JNPR ), Vonage Holdings ( VG ), Werner Enterprises Inc ( WERN ).

Developed: Israel Chemicals limited ( ICL.IL; ICL IT ), Kddi Corporation ( DDIC.JP; 9433 JP ), Salmar ( SALM.NO; SALM:NO ), Equinor ( EQNR.NO; EQNR NO ), Daito Trust Construction ( DITC.JP; 1878 JP ), Mitsubishi Tanabe Pharma ( EF@N.JP; 4508 JP ),Lawson ( LAWS.JP; 2651 JP ), Nintendo ( NNDO.JP ; 7974 JP ),Deutsche Lufthansa ( LHAX.DE; LHA GR )

Emerging: Sk Telecom ( SKT.KR; 017670 KS ), Remgro ( REMJ.ZA; REM SJ )

Stocks worth focusing on in this week’s Global Laggards:

U.S.

Cracker Barrel Old Country Store ( CBRL ) – Retail ( $4B market cap ) – operates 659 rustic country-stores, each of which comprise a full-service restaurant, offering homestyle food and a gift shop.

O’Neil Methodology

The stock is down 17% from its 52-week high and is trading weakly below key moving averages. We see the next support level for the stock at ~$142, which is ~7% below the last closing price of $153.43.
It has a strong EPS Rank of 71, but is expected to decline going forward, as FY 2019 EPS growth is expected at 4%, which would make it the second consecutive year of low single-digit EPS growth. Further, it has a weak Composite Rating of 57.
Its RS line has been trending down, and its RS Rating currently stands at 29, and its A/D Rating is weak at D-.

Commentary

Cracker Barrel reported Q2 FY 2019 results on February 26. Revenue of $811.7M ( +3.0% y/y ) beat estimates of $810M, while EPS of $2.52 (-7.7% y/y) also beat estimates of $2.51. Comparable store restaurant sales growth of 3.8% beat expectations of 1.3% on the back of strong off-premise sales growth in November.
Even as the comparable store restaurant sales growth was strong, it did not translate into improved margins. Store-level operating margin shrank 40bps y/y to 13.9% on account of higher labor and other operating costs. At the Company level, operating margin was 9.5%, down 20bps y/y.
For the full year, management has guided for comparable store restaurant sales to grow 1–2%, implying a deceleration in H2 from the H1 average comparable store restaurant sales growth of 2.6%. With persisting labor inflation, operating margin is guided at 9.0–9.3%, compared with 9.7% for FY 2018.

Global Laggards

Posted on March 14, 2019March 27, 2019 by Cornelio Ash

Highlighted Charts

U.S.: Olin Corporation ( OLN ), Trinity Industries ( TRN ), Service Corp ( SCI ), Helen Of Troy Limited ( HELE ) , EQT Corporation ( EQT ), Interactive Brokers Group ( IBKR ), ICU Medical ( ICUI ), Kroger ( KR ), Qurate Retail ( QRTEA ), Advanced Energy ( AEIS ), Hewlett Packard ( HPE ), Logmein ( LOGM ), Alaska Air Group Corporation ( ALK ).

Developed: Israel Chemicals limited ( ICL.IL; ICL IT ), Line ( LINE.JP; 3938 JP ), Kikkoman ( KN@N.JP; 2801 JP ), Caltex Australia ( CTX.AU; CTX AU ), Mizuho Financial Bank ( MIZH.JP; 8411 JP ), Morphosys ( MORX.DE; MOR GR ), Lawson ( LAWS.JP; 2651 JP ), Infineon Technologies ( IFXX.DE; IFX GR ), Trend Micro ( REND.JP; 4704 JP ), Mitsui Osk Lines ( MO@N.JP; 9104 JP ).

Emerging: Koza Altin Isletmeleri ( KAI.TR; KOZAL TI ), Samsung C&T ( CLZ.KR; 028260 KS ), Krung Thai Bank ( KTBT.TH; KTB TB ).

Stocks worth focusing on in this week’s Global Laggards:

U.S.

ICU Medical ( ICUI ) – Health Care; $4.8B market cap— is a pure play in the intravenous (IV) therapy business. The Company makes infusion products and solutions, IV solutions, PCA pumps, and monitoring devices used in hospitals and clinics. ICU earns a majority of its revenue from its infusion consumables segment providing pipes to deliver fluids and medications to patients. ICU Medical is either number one or two in the segments in which they compete. The Company earns nearly 75% of its revenue from the US, though they sell their products in more than 95 countries.

Q4 revenue by segment ( y/y growth ): infusion consumables, 38% ( +1% ); IV solutions, 30% ( -27% ); IV systems, 28% ( 4% ); critical care, 4 % ( 0% )

2018 revenue by segment ( y/y growth ): infusion consumables, 36% ( 8% ); IV solutions, 33% ( -11% ); IV systems, 27% ( -3% ); critical care, 4% ( 7% )

The numbers exclude the contract manufacturing done by ICU for Pfizer, which contributed $72M in 2018 and $19M in Q4.

Global Laggards

Posted on March 7, 2019March 27, 2019 by Heetae Kim

Highlighted Charts

U.S.: Pan American Silver Corporation ( PAAS ), Proto Labs ( PRLB ), News Corporation ( NWSA ), Lancaster Colony Corp ( LANC ), EQT Corporation ( EQT ), M B Financial ( MBFI ), Resmed ( RMD ), Cars.com ( CARS ), Qurate Retail ( QRTEA ), Juniper Networks ( JNPR ), Fifty One Job ( JOBS ), Jetblue Airways Corporation ( JBLU )

Developed: Nippon Steel and Sumitomo Metal ( NSSM.JP; 5401 JP ), Mitsubishi Electric ( UM@N.JP; 6503 JP ), Singapore Telecom ( TELC.SG; ST SP ), NH Foods ( FY@N.JP; 2282 JP ), Caltex Australia ( CTX.AU; CTX AU ), Orix ( ORIX.JP; 8591 JP ), Cosmos Pharmaceutical ( CSMS.JP; 3349 JP ), Hitachi Metals ( HM@N.JP; 5486 JP ), NTT Data ( COMM.JP; 9613 JP ), Nippon Express ( NX@N.JP; 9062 JP ), Credit Agricole ( CRDA.FR; ACA FP )

Emerging: Discovery ( DSYJ.ZA; DSY SJ )

Stocks worth focusing on in this week’s Global Laggards:

U.S.

Proto Labs Inc ( PRLB ) – Capital Equipment; $2.9B market cap – manufactures custom prototypes and short-run production parts through advanced 3D printing, computer numerical control (

) machining, sheet metal fabrication, and injection molding processes. 80% of revenues are derived from the U.S., while the remainder primarily are from Europe.

O’Neil Methodology

PRLB gapped down substantially on February 7 and closed at a 12-month low after reporting disappointing Q4 2018 results and issuing below-consensus Q1 2019 guidance. While the stock has seen a small rebound over the past month, it continues to trade below its key moving averages.
A/D Rating remains at D- and RS line is sitting near its trailing 12-month low.

Commentary

In Q4, sales of $113M were near the low end of management’s previous guidance of $112M–117M, while EPS of $0.74 was below guidance of $0.77–0.83.
More importantly, the Company provided Q1 2019 guidance that was far below consensus expectations, raised concerns about its growth trajectory. The Company expected to post mid-teens sales and EPS growth from 2019–2020. Revenue guidance of $113M–119M was below consensus of $120M, with the midpoint representing 7.5% y/y growth. EPS guidance of $0.65–0.73 was below consensus of $0.80, with the midpoint representing a 2% y/y decline.
Management noted that the company’s recently-acquired sheet metal business had unperformed its expectations and was the primary driver the company’s weak quarter.

WON Europe Today

Posted on February 28, 2019April 5, 2019 by Veera Manju

Yesterday, most European markets closed in the red, unable to maintain their rally due to geopolitical news around the world, gloomy sentiment over the U.S.-China trade talks, and rising tension between India and Pakistan. The U.K.’s FTSE 100 lost 0.61% with higher volume. Germany’s DAX and France’s CAC lost 0.46% and 0.26%, respectively, on higher volumes.

The Stoxx 600 closed 0.28% in the red, with higher volume adding Distribution Days to the count (5 DD).
The top performing sector was Banks, while the major losers were Travel & Leisure and Chemicals.
Countries that closed in the green were Ireland, Austria, and Italy.

Global Laggards

Posted on February 28, 2019March 27, 2019 by Heetae Kim

Highlighted Charts

U.S.: Pan American Silver ( PAAS ), Adtalem Global Education ( ATGE ), Helen of Troy ( HELE ), Edgewell Personal Care ( EPC ), EQT Corporation ( EQT ), Interactive Brokers ( IBKR ), Encompass Health ( EHC ), Kar Auction Services ( KAR ), Domino’s Pizza ( DPZ ), Interdigital ( IDCC ), Allscripts Healthcare ( MDRX ), Jetblue Airways ( JBLU )

Developed: Henkel Ag ( HEN3X.DE; HEN3 GR ), Denso ( DE@N.JP; 6902: JP ), Fancl ( FANC.JP; 4921 JP ), Orkla ( ORK.NO; ORK NO ) Imperial Oil ( IMO.CA; IMO CN ), Hargreaves Lansdown ( HL.GB; HL LN ) Cochlear ( COH.AU; COH:AU ), Ferguson ( FERG.GB; FERG LN ), Hitachi Metals ( HM@N.JP; 5486 JP ), NTT Data ( COMM.JP;9613 JP )

Stocks worth focusing on in this week’s Global Laggards:

U.S.

Edgewell Personal Care ( EPC ) – Consumer Staple; $2.4B market cap – U.S.-based consumer products company with brands including Edge and Skintimate (shaving gels), Stay free and Carefree (feminine products), Playtex (infant care), and Bull Dog (skin care).

O’Neil Methodology

Shares are reverting from resistance at the down-sloping 200-DMA. Shares are trading 25% off 52-week high.
Poor RS Rating at 34 and down-sloping RS line.
Sharp deterioration in Group Rank at 166, compared to 70 on February 22.

Commentary

Edgewell faces heavy competition in the U.S. where it derives about 55% of its revenue. As of Q1 FY 2019, its market share in the shaving gels segment lost 120bps y/y, owing to stiff competition from P&G’s Gillette.
The Company’s Q1 FY 2019 revenue declined 2.4% y/y, better than consensus estimates of a 5% decrease. Organic net sales dropped 3.5% y/y owing to a fall in revenue from North America wet shave, feminine care, and infant care segments due to concentrated market competition.
Moreover for FY 2019, it expects a low single digit y/y decrease in net revenue and adjusted EPS of $3.30–3.6 (versus consensus estimates of $3.44). However, it reduced GAAP EPS estimates to $2.09–2.39 (versus its previous guidance of $2.2–2.5), as it considers certain expenses, including restructuring charges and integration costs.
Further, the U.S. Consumer Staples sector is currently under pressure owing to lower than expected earnings reported by most companies in the recent earnings season.

WON Europe Today

Posted on February 27, 2019April 5, 2019 by Veera Manju

Yesterday, European markets closed in the green despite fading optimism surrounding the U.S.–China trade talks in the morning session. The markets closed on a high on the back of positive news from Wall Street. Among the major markets, the U.K. was an exception and closed in the red due to a strong sterling, which was at a five-month high against the dollar. The U.K.’s FTSE 100 lost 0.45% on higher volume. Germany’s DAX and France’s CAC gained 0.31% and 0.13%, respectively, on higher volumes.

Global Laggards

Posted on February 21, 2019March 27, 2019 by Heetae Kim

This report has been curated by our sector analysts to find stocks showing technical weakness. We believe these stocks are laggards relative to their own domestic markets. We recommend that they be underweighted as they may be vulnerable to further downside risk and underperformance.

Highlighted Charts

U.S.: Teck Resources (

), Proto Labs (

), Dish Network (

), Constellation Brands (

), Marathon Petroleum (

), Rayonier Reit (

), Teva Pharmaceuticals (

), Urban outfitters (

), Juniper Networks (

), Bottomline Technologies (

), American Airlines (

Developed: Kuraray (RK@N.JP; 3405 JP), Siemens (SIEX.DE; SIE GR), ITV (ITV.GB; ITV LN), Imperial Oil (IMO.CA; IMO CN), Resona (DBHI.JP; 8308 JP), Hisamitsu Pharmaceutical (HSMP.JP,4530 JP), Ain (DCL.JP; 9627 JP), Hitachi Metals (HM@N.JP; 5486 JP), NTT Data (COMM.JP; 9613 JP), Swedbank SA (SWED.SA).

Emerging: Hyundai Motor (HDR.KR; 005380 KS).

Stocks worth focusing on in this week’s Global Laggards:

Swedbank SA (SWED.SE) – Swedbank offers financial services in Sweden, Estonia, Latvia, and Lithuania. Its main offerings are mortgages, asset management, and card services.

O’Neil Methodology

The shares are reacting negatively over the last two sessions and are clearly trading below key support levels.
Poor fundamental ratings: EPS Rank of 68, Composite Rating of 42, SMR Rating of B.
Technical ratings: RS Rating of 35 (near all-time low), A/D Rating of B-.
The Bank-Money Center Industry Group of Sweden has sharply declined in rank over the last few weeks. The group is now ranked 75, down from 37 eight weeks ago.

Commentary

In the Danske Bank scandal, Swedbank is the latest Nordic bank to be linked to alleged money laundering.

Per Bloomberg, Nordic and Baltic banks were helping the former Soviet Union channel illegal funds to the West.
On Wednesday, Swedbank’s CEO said she couldn’t deny allegations from a Swedish media report that claimed Swedbank handled approximately $4B linked to Danske Bank’s suspicious activities.
The Estonian Financial Supervisory Authorities (FSA) announced it would start investigating immediately, with the Swedish FSA joining efforts. The Bank of Lithuania will also support the investigation.
Bill Browder, a London-based investor, said he intends to file criminal complaints against Swedbank over the allegations.
Browder claims he has sufficient evidence to show that Russian money launderers used the Nordic banking system to move funds illegally.
We believe the latest reports will bring continuous selling pressure to the stock, which will remain under pressure.

There may be downside support at the SEK 153 level, about 8% downside. But given how Danske Bank shares are trading, Swedbank shares may trend below this support level. We advise covering the short at the 200-DMA as a stop-loss.