With many global markets under pressure, Executive Director, Research Analyst Dean Kim discusses our continued bearish view of developed market banks in this webinar. He also highlights key support levels for payment and insurance stocks on our Focus List and provides guidance for investors to protect their portfolios should stocks breach these levels.
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.
Global Financial Sector Overview
Key points from the report:
- Avoid developed market banks.
- Favor non-bank financials, global payment processors, and emerging market banks
June 27, 2019 – A Review of Payment Processor Stocks
What’s the best way to address payment processor stocks in the current market environment? In this webinar, Executive Director, Research Analyst Dean Kim will reveal important support and resistance levels for stocks in this group as well as how to identify long-term winners. He will also discuss several names from our watch list that look fundamentally strong and, given the appropriate technical setup, could be outperformers.
Payment Processors
Some highlights from this report:
- The IPAY ETF outperformed the Nasdaq and S&P 500 by 13.3% and 16.2%, year-to-date, respectively.
- Valuation is becoming stretched with the group’s PE currently sitting at 32x 2020 EPS versus the S&P 500’s 17x. However, we rely more on stocks’ William O’Neil proprietary fundamental and technical ratings and rankings to guide our entry (add) or exit (trim) into and out of stocks.
- Fundamentally, we continue to see solid visibility of TPV growth on the back of continued structural shift to digital forms of payments as well as stable consumer spending globally. We firmly believe that payment processors are in a multi-year up cycle of higher growth.
- However, we need to be mindful of overall market condition as changes in macro status in the U.S., developed, and emerging markets will likely impact share prices.
- In this report, we will focus on support and resistance levels to help guide when to add to positions and when to trim.
Muangthai Capital Update
Key points:
On June 5, the stock broke out of a 31-week consolidation base, turning actionable.
Muangthai has three- and five-year earnings growth of 69% and 52%, respectively, resulting in a strong EPS Rank of 98.
Technical profile: RS Rating of 97, Up/Down Volume ratio of 2.3, A/D Rating of A-.
Thailand’s Finance – Consumer Loans industry group has sharply jumped in rank over the past few weeks to fifth out of 107 groups.
Institutional holdings have grown 21% from 153 in March 2018 to 185 in March 2019.
April 25, 2019 – Financial Stocks to Watch This Earnings Season
This earnings season so far has brought mixed results from some of the major U.S. banks, in line with our negative outlook on the group since last fall. We continue to be bearish on U.S. banks, but we are starting to see a change from a potential hard landing to a soft landing. In this week’s webinar, Executive Director, Research Analyst Dean Kim examines financial stocks that are actionable or setting up well and reveals how to prepare your portfolio for upcoming results from the ideas on our U.S. Focus List.
Global Financial Sector Overview
Some highlights from this report:
U.S. banks may avoid a heavy selloff as the yield curve is bouncing back with the two- to 10-year at 19bps versus 14bps a month ago. However, we are not in the clear because the Fed’s rate movement will dictate future direction.
European financials are starting to break out after a year-long downtrend. We highlight several names.
Banks and insurance companies continue to do well in APAC and LatAm. Our top picks are Ping An Insurance, China Merchants Bank, Bajaj Finance, and Kotak Mahindra Bank.
Global fintechs are approaching new highs, with many of our Focus List names extended from proper entry. Our top picks are PayPal and Adyen.
Cash vs. Cashless
The payment processor ETF, IPAY, hit an all-time high earlier this month after breaking out from a deep cup-with-handle formation. Many payment processors on our Focus List are either actionable, setting up, or extended. In this note, we examine what’s behind the extraordinary momentum of this sector as well as offer a brief overview of each stock on our Focus List.
Global Financial Sector Webinar with Dean Kim — February 28, 2019
Executive Director, Research Analyst Dean Kim will examine the global financial sector, including analysis of the fintech and banking/insurance/real estate spaces.
Global Financial Sector Overview
Some highlights from this report:
- Payment processors add value at multiple levels of the supply chain. Our top picks are PYPL and ADYE.NL.
- U.S. banks are lacking any positive growth catalyst, while emerging market banks offer ample room for growth due to underpenetrated financial markets. Our top picks in the latter are HFC.IN and IO3.BR.
- In the insurance sector, we favor Brazil’s growing but underpenetrated market and Asia’s market, which is growing with its rising middle class. Our top ideas here are SUA.BR, AGP.HK, and PING.HK.
- This report accompanies Dean Kim’s webinar on the Financial sector on Thursday, February 28 at 8am PT/11 am ET.
