Author: Dean Kim

Dean Kim is an Executive Director, Research Analyst for William O’Neil + Co.. Mr. Kim joined the firm to establish equity research coverage of the financial technology (“fintech”) sector. He has unique insight into the industry’s growth drivers, with broad experience covering the financial sector as an analyst and overhauling corporate business processes as a management consultant. Most recently, Mr. Kim served as Chief Financial Officer of Jios Aerogel Limited, a leading producer of the aerogel nanotechnology-based insulation material. As CFO, he raised more than $5 million in capital and managed liquidity, budgeting, and forecasting. Previously, he was an equity analyst for more than a decade. From 2007–2011, Mr. Kim headed equity research for BNP Paribas’ Korea office and simultaneously covered the banking sector, for which he was ranked number one by the Thomson Reuters/Joong-Ang Daily poll. He was also an equity analyst on Lehman Brothers' proprietary trading desk in Hong Kong, and on an Institutional Investor-ranked small cap team at UBS. Earlier in his career, Mr. Kim, an engineer, worked as a business process redesign specialist at Deloitte Consulting, analyzing the organization-wide processes of utilities and manufacturing companies. Mr. Kim earned a Bachelor’s degree in Electrical Engineering at Yale University, and an MBA from Columbia Business School. Outside of work, Mr. Kim enjoys coaching his kids’ soccer teams and traveling with his family.

HDFC Bank

Posted on by Dean Kim

Key points from this report:

 

  • On the back of a strong Q2 FY21 update, the stock broke out of a 41-week, stage-one cup-with-handle base.
  • Big winner: The stock has been on our Focus List on two prior occasions, with decent gains.
  • Excellent fundamental ratings and rankings: EPS Rank 95, Composite Rating 80, and SMR Rating A. Average pretax margin and ROE for the last four years were higher than 27% and 17%, respectively.
  • Improving technical ratings: RS Rating of 48 and A/D Rating of B+. RS line is holding up well and has seen an uptick recently.

Indutrade

Posted on by Dean Kim

Key points from this report:

  • Indutrade manages a portfolio of acquired companies that have well-diversified customer and product offerings. It has 200 subsidiaries, which operate independently. Indutrade focuses on acquiring owner-led industrial companies with niche technological or manufacturing advantages, low multiple valuation, and high margins.
  • The stock is breaking out from a stage-two cup base with a pivot at SEK 490.20 on above average volume. It is trading above its key moving averages and is at all-time highs. The stock is up 30% since being added to our Focus List and is again actionable.
  • Fundamental ratings: EPS Rank of 90, Composite Rating of 91, and best SMR Rating of A, driven by the strong double-digit earnings growth (16%) and sales growth (11%) over the past five years and ROE of 22%.
  • Strong technical ratings: A/D Rating of 31, which has been rising with increased accumulation over the past five weeks, Up/Down Volume ratio of 1.1 showing positive demand for the stock, and RS Rating of 81 is good.
  • Indutrade acquired the Czech medical-technology company Cheiron last week. Cheiron engages in the production of equipment used for healthcare applications in surgery rooms, ICUs, emergency wards, and cardio units. Cheiron will be included in Indutrade’s industrial components business and generates annual sales of SEK 120M (<1% of revenues), which is expected to be earnings accretive.
  • The company reported better-than-expected Q2FY20 revenue and EPS, beating estimates by 7.5% and 35.0%, respectively. Revenue and EPS had CAGR of 12% and 17% over the past three years. Consensus estimates a double-digit EPS growth for both FY20 and FY21.

Nexi

Posted on by Dean Kim

Key points from this report:

 

  • Nexi (NEXI.IT) and SIA agree to merge to become a payment powerhouse in Italy.
  • Nexi shares have a Composite Rating of 81 and SMR Rating of C. Estimated FY20 EPS is €0.4, up from €0.06 in FY19.
  • H1 revenue fell 6.3% y/y, and transaction volume fell 16.9% y/y. However, Nexi reported that transaction volume has recovered to pre-COVID levels. The company has progressed well with its cost containment plan, reducing total H1 costs 8.9% y/y.
  • The stock is under accumulation, reflected in its A/D Rating of 21 and Up/Down Volume ratio of 1.3 and improving. RS Rating is 92.
  • Institutional sponsorship has been improving, with 823 funds holding Nexi shares in June, up from 240 a year ago.

Daifuku

Posted on by Dean Kim

Key points from this report:

 

  • The stock is breaking out of a stage-two 11-week cup base on average volume to a new 52-week high.
  • It is trading constructively above its moving averages with support along its 50-DMA (-9.3%).
  • Technical ratings improved the past three weeks as the stock found support at ¥9,100 and retook its 50-DMA on above average volume. RS Rating 92, A/D Rating B+, Up/Down Volume ratio 1.3.
  • Very strong fundamental ratings: EPS Rank 83, SMR Rating A, Composite Rating 95.
  • Consensus expects double-digit EPS growth in 2021 and 2022.
  • Industry Group Rank has declined to 61 out of 188.
  • The stock has a low beta of 0.95, indicating that it is less volatile than the market. It has a beta stability factor of 40.00, indicating that 60% of the risk associated with the stock is unique and 40% is market risk.

Experian

Posted on by Dean Kim

Key points from this report:

 

  • The stock recently broke out of a nine-week flat base and is currently actionable.
  • Fundamental profile: EPS Rank 56 and Composite Rating 92.
  • RS line is near all-time highs with an RS Rating of 85 and Up/Down Volume ratio of 1.0.
  • The stock has seen an increase in fund sponsorship in nine straight quarters.
  • The Financial Services-Specialty industry group is currently ranked 35 (of 154 total groups in the U.K.).

Worldline

Posted on by Dean Kim

Key points from this report:

 

  • The stock is breaking out of a stage-one cup base spanning eight weeks. Actionable.
  • Fundamental profile: EPS Rank 44, SMR Rating B, Composite Rating 83.
  • Technical ratings: RS Rating 87, Up/Down Volume ratio 1.6, A/D Rating B+.
  • Institutional sponsorship has improved ~21% y/y to 1,351 in June.
  • The Financial Services – Specialty Industry Group is now ranked 16 out of 123 total groups in France.

Industrials: What’s Hot, What’s Not

Posted on by Dean Kim

Key takeaways:

 

  • Capital Equipment Focus List stocks
    • EM and DM stocks have outperformed U.S. additions
  • Companies have beaten Q2 forecasts    
    • Green energy, Modernization, Household segments
  • Japan: Good trends in Building Residential and HVAC segment
  • U.S.: Demand for composites and homebuilders (BLD, LGIH)
  • Sweden, Norway: INDT.SE, NIBE.SE have reported good beat
    • TOM.NO – volume light but very good A/D Rating and Up/Down Volume ratio of 1.7
  • Brazil: Currency depreciation against U.S. dollar
  • Take some profits: NIBE.SE, HALMA.GB, WG3.BR, ROFR.FR
  • Aerospace and Defense stocks have come back in the last month – industry group continues to lag
    • Supply of defense-related rare metals from China
    • Eased norms for exporting low-range UAVs to allies
  • Actionable stocks
    • Anhui Conch Cement (ANH.HK) – breaking out of stage-one nine-week double-bottom base and bouncing off 50-DMA
    • Exponent Inc (EXPO) – breaking out of an 18-week consolidation base
    • LMT is actionable – poor Industry Group Rank and has been a laggard.