Report
Dave Nicoski ...
  • Ross LaDuke
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Vermilion Macro Vision: U.S. Equity Strategy

The S&P 500 continues its march higher, however the troops have been unable to keep up with the generals and with this is an ounce of concern. Sending the generals into battle often ends up with no more leaders. Our view of the markets is to deploy a barbell approach of growth and safety. While growth continues to outperform, it does so without the small-caps. Meanwhile utilities and staples continue to march just behind the growth areas of the market, and have been unable to reach new RS highs since the December decline. In this report we detail our investment thesis and outlook for U.S. equities, highlighting our favorite sectors and bottoms up ideas.
Underlyings
Accenture PLC

Adobe

Adobe is a software company. The company's business is organized into three segments: Digital Media, which provides products, services and solutions that enable individuals, teams and enterprises to create, publish and promote their content; Digital Experience, which provides enterprises and brands a suite of products, services and solutions for creating, managing, executing, measuring and optimizing customer experiences that span from advertising to commerce; and Publishing, which contains products and services that address market opportunities including eLearning solutions, technical document publishing, web conferencing, document and forms platform, web application development and printing.

Advanced Micro Devices Inc.

Advanced Micro Devices is a semiconductor company. The company has two reportable segments: Computing and Graphics, which primarily includes desktop and notebook processors and chipsets, graphics processing units (GPUs), professional GPUs and licensing portions of its intellectual property (IP) portfolio; and Enterprise, Embedded and Semi-Custom, which primarily includes server and embedded processors, semi-custom System-on-Chip products, development services, technology for game consoles and licensing portions of its IP portfolio. The company sells its products through its direct sales force and through independent distributors and sales representatives in both domestic and international markets.

Alphabet Class A

Alphabet is a holding company. The company has two segments: Google and Other Bets. Google includes the company's main products such as Ads, Android, Chrome, Google Cloud, Google Maps, Google Play, Hardware (including Nest), Search, and YouTube. The company provides a range of products across screens and formats. Also, the company delivers both performance advertising and brand advertising. Other Bets includes businesses such as Access, Calico, CapitalG, GV, Verily, Waymo, and X. Other Bets primarily engages in the sale of internet and TV services through Access as well as licensing and research and development services through Verily.

Amazon.com Inc.

Amazon.com serves consumers through its online and physical stores. The company also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, and Echo devices, and the company develops and produces media content. The company provides programs that enable sellers to grow their businesses, sell their products in its stores, and fulfill orders through the company The company serves developers and enterprises of various sizes, including start-ups, government agencies, and academic institutions, through its Amazon Web Services segment, which provides a set of global compute, storage, database, and other service offerings. In addition, the company provides services, such as advertising.

American Tower Corp

American Tower is a holding company. Through its subsidiaries, the company is a real estate investment trusts and an independent owner, operator and developer of multitenant communications real estate. The company's primary business is the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. The company also provides tower-related services, including site acquisition, zoning and permitting and structural analysis, which primarily support its site leasing business, including the addition of new tenants and equipment on its sites.

Apple Inc.

Apple designs, manufactures and markets mobile communication and media devices and personal computers, and sells a variety of related software, services, accessories, and third-party digital content and applications. The company's products and services include iPhone?, iPad?, Mac?, Apple Watch?, AirPods?, Apple TV?, HomePod?, a portfolio of consumer and personnel software applications, iOS, macOS?, watchOS? and tvOS? operating systems, iCloud?, Apple Pay? and a variety of other accessory, service and support offerings. The company sells and delivers digital content and applications through the iTunes Store?, App Store?, Mac App Store, TV App Store, Book Store and Apple Music?.

Aspen Technology Inc.

Aspen Technology supplies asset optimization solutions for industrial environments. The company's applications are grouped into three suites: engineering; manufacturing and supply chain; and asset performance management. The company's engineering software is used to develop process designs of new plants, re-vamp existing plants, and optimize existing processes. The company's manufacturing software is used to optimize processing activities. The company's supply chain management software enables process manufacturers to reduce inventory levels, respond to market demands and optimize supply chain operations, among others. The company's asset performance management suite is used to understand and predict the reliability of a system.

Charter Communications Inc. Cl A

Charter Communications is a holding company. Through its subsidiaries, the company is a cable operator and a broadband communications company providing video, Internet and voice services. The company also provides its mobile service to residential customers. In addition, the company sells video and online advertising inventory to local, regional and national advertising customers and fiber-delivered communications and managed information technology solutions to enterprise customers. The company also owns and operates regional sports networks and local sports, news and lifestyle channels. The company owns and operates a two-way telecommunications network which passes households and small and medium businesses across the U.S.

Comcast Corp. Cl A

Comcast is a media and technology company. The company's segments are: Cable Communications, which provides high-speed Internet, video, voice, and security and automation services individually and as bundled services at a discounted rate over its cable distribution system to residential and business customers; NBCUniversal, which includes a portfolio of national cable networks that provide a variety of entertainment, news and information, and sports content, regional sports and news networks, international cable networks, and cable television studio production operations; and Sky, which owns a portfolio of pay television channels that provide entertainment, news, sports and movies.

CoreLogic

CoreLogic is a property information, analytics and data-enabled services provider operating in North America, Western Europe and Asia Pacific. The company has two segments: Property Intelligence and Risk Management Solutions, which combines property information, mortgage information and consumer information to deliver housing market and property-level insights, predictive analytics and risk management capabilities; and Underwriting and Workflow Solutions, which combines property information, mortgage information and consumer information to provide mortgage origination and monitoring solutions, including underwriting-related solutions and data-enabled valuations and appraisals.

Equinix Inc.

Equinix provides a choice of data center interconnection solutions and platform services primarily comprised of colocation, interconnection solutions and platform services. The company operates International Business Exchange? (IBX?) data centers across the Americas; Europe, Middle East and Africa and Asia-Pacific regions where customers directly interconnect with a network ecosystem of partners and customers. The company's IBX data centers include several layers of physical security, cabinet space availability, on-site trained staff, areas for customer care and equipment staging, redundant alternating current/direct current power systems and other redundant and fault-tolerant infrastructure systems.

Facebook Class A

Facebook is focused on building and engaging products that enable people to connect and share with friends and family through mobile devices, personal computers, and other surfaces. The company's products include: Facebook, which enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, which is a community for sharing photos, videos, and messages; Messenger and WhatsApp, which are messaging applications; and Oculus, which is a hardware, software, and developer ecosystem that allows people to come together and connect with each other through its Oculus virtual reality products. The company also sells advertising placements to marketers.

Invesco S&P 500 Equal Weight Financials ETF

Invesco S&P 500 Equal Weight Industrials ETF

iShares China Large-Cap ETF

iShares MSCI Emerging Markets ETF

Market Vectors Junior Gold Miners ETF

Marvell Technology Group Ltd.

Marvell Technology Group is a fabless semiconductor provider of application-specific products. The company is focused on the development of System-on-a-Chip devices, utilizing its technology portfolio of intellectual property in the areas of analog, mixed-signal, and digital signal processing. The company's product portfolio includes devices for storage, in which the company engages in data storage controller solutions spanning consumer, mobile, desktop and enterprise markets; networking, which addresses end markets in cloud, enterprise, small and medium business and service provider networks; and connectivity, which addresses end markets in consumer, enterprise, desktop, service provider networks and automotive.

Microsoft Corp.

Microsoft is a technology company. The company develops and supports software, services, devices, and solutions. The company's products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; and video games. The company also designs, manufactures, and sells devices, including personal computers, tablets, gaming and entertainment consoles, other devices, and related accessories. The company provides an array of services, including cloud-based solutions as well as solution support and consulting services. The company also delivers releavant online advertising.

Moody's Corp.

Moody's is a provider of credit ratings; credit, capital markets and economic related research, data and analytical tools; software solutions; quantitatively derived credit scores; learning solutions and certification services; offshore financial research and analytical services; and company information and business intelligence products. The company's segments are: Moody's Investors Service, which publishes credit ratings on a range of debt obligations and the entities that issue such obligations in markets worldwide; and Moody's Analytics, which develops products and services that support financial analysis and risk management activities of institutional participants in global financial markets.

Netflix Inc.

Netflix is an internet entertainment service with paid memberships members in several countries enjoying TV series, documentaries and feature films across a variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, without commercials or commitments. Several members in the U.S. subscribe to the company's DVD-by-mail service. The company has three reportable segments: Domestic streaming, which streams content to its members in the U.S.; International streaming, which streams content to its members outside the U.S.; and Domestic DVD, which provides services consisting solely of DVD-by-mail.

PayPal Holdings

PayPal Holdings is a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. The company enables its consumers and merchants to manage and move their money on any platform and using any device. The company also facilitates person-to-person payments through its PayPal, Venmo, and Xoom products. The company's combined payment solutions, including its PayPal, PayPal Credit, Braintree, Venmo, Xoom, and iZettle products, compose its proprietary Payments Platform. The company charges fees for completing payment transactions for its customers and other payment-related services that are processed on its Payments Platform.

S&P Global

S&P Global is a provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. The company's segments include: S&P Global Ratings, which provides credit ratings, research and analytics; S&P Global Market Intelligence, which provides multi-asset-class data, research and analytical capabilities that integrate cross-asset analytics and desktop services; S&P Global Platts, which provides information and benchmark prices for the commodity and energy markets; and S&P Dow Jones Indices, which provides a variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors.

SBA Communications

SBA Communications, through its subsidiaries, owns and operates wireless communications infrastructure, including tower structures, rooftops, and structures that support antennas used for wireless communications. The company's services include: network pre-design; site audits; identification of potential locations for towers and equipment on existing infrastructure; support in leasing of the location; obtaining zoning approvals and permits; tower and related site construction; antenna installation; and radio equipment installation, commissioning, and maintenance. The company provides site development services at its towers and at towers owned by others on a local basis, through market and regional offices.

Select Sector SPDR-Consumer Staples

Select Sector SPDR-Technology

Select Sector SPDR-Utilities

SHOPIFY INC

Shopify provides a cloud-based commerce platform designed for small and medium-sized businesses. Merchants use its software to run their business across all of their sales channels, including web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops. Co. provides a platform for merchants to create an omni-channel experience that helps showcase the merchant's brand and grow its business. Co.'s platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, build customer relationships and leverage analytics and reporting.

STMicroelectronics N.V. ADS

The Communication Services Select Sector SPDR Fund

VanEck Vectors Gold Miners ETF

Visa

Visa is a payments technology company. The company's primary products consist of business solutions, which include small business, corporate cards, purchasing cards, virtual accounts, and disbursement accounts; credit, which allows consumers and businesses to access credit to pay for goods and services; debit, which allows consumers and small businesses to purchase goods and services using funds in their demand deposit accounts; prepaid, which addresses consumer-use cases and needs including, general purpose reloadable and payroll; and global ATM, which provides account holders with cash access through issuing and acquiring partnerships with financial institutions and independent ATM operators.

WEX
WEX

Wex is a provider of corporate card payment solutions. The company operates in three business segments: Fleet Solutions, which provides customers with fleet vehicle payment processing services specifically designed for the needs of commercial and government fleets; Travel and Corporate Solutions, which focuses on the payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs; and Health and Employee Benefit Solutions, which is a provider of integrated software-as-a-service technologies and services, healthcare premium billing, payment and workflow management.

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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