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.

World Pay Inc

Posted on August 9, 2018February 1, 2019 by Dean Kim

Key Points:

• The stock gapped up on the beat-and-raise quarterly earnings report and is currently actionable.
• RS Rating of 72 and A/D Rating of C- are set to improve after today’s gap up in price.
• Composite Rating 85. EPS Rank 85. SMR Rating A.
• Average ROE for the trailing five years stands at ~50%.
• Consensus expects 2018 and 2019 EPS growth of 13% and 18%, y/y, respectively.

Global Payments

Posted on July 13, 2018February 1, 2019 by Dean Kim

Key points:

The stock recently retook its 21- and 50-DMA on above average volume.

The stock’s RS line is trending higher with an RS Rating of 80. A/D Rating improved to B+.

Up/Down volume ratio 1.1.

EPS Rank 94. SMR Rating B. Composite Rating 93.

Accelerating pretax margin over the trailing three years.

Consensus expects 2018 and 2019 EPS growth of 27% and 16%, y/y, respectively.

Banco Del Bajio

Posted on July 6, 2018February 1, 2019 by Dean Kim

Key points:

The stock is breaking out of an 18-week double-bottom base. We recommend that investors accumulate the stock at current levels.

The stock’s RS line is trending higher and its RS Rating currently stands at 93. A/D Rating of A-.

Strong EPS Rank of 96. Consensus estimates have EPS growing 17% and 9% in 2018 and 2019, respectively.

Morgan Stanley

Posted on June 26, 2018February 1, 2019 by Dean Kim

Key points:

The stock is under significant selling pressure and is currently trading below key support areas.

A/D Rating has deteriorated to E and RS Rating has fallen to 26.

Weakness is broad-based, as the stock’s Industry Group Rank deteriorated to 179.

The stock is currently trading 19% off highs.

SS&C Technologies

Posted on June 19, 2018February 1, 2019 by Dean Kim

Some Highlights from the report:

SSNC broke out of a flat base on high volume. It is actionable.
RS Rating is trending upward and stands at 86. Composite Rating 96.
A/D Rating of B+ and Up/Down volume ratio of 2.2 indicates accumulation.
EPS Rank of 90. 2016–2018 earnings stability rating of 1.
Fund ownership up 38% y/y as of March 2018.

Fleetcor Technologies

Posted on June 19, 2018February 1, 2019 by Dean Kim

Some Highlights from the report:

The stock broke out of a stage-two flat base on 6.2x average volume and is currently actionable.
FLT delivered seven straight quarters of double-digit earnings growth and has a strong EPS Rank of 94. Historically, revenue has grown an average of 26% (2014–2018) with stable margins (pretax margins of more than 50%).
RS line near a new high with an RS Rating of 87.
A/D Rating improves to B.
Up/Down volume ratio 1.5.

Alibaba Group Holding

Posted on June 7, 2018February 1, 2019 by Dean Kim

Highlights from the report:

• BABA has broken out from an 18-week consolidation on healthy average volume and is actionable.

• BABA’s FY 2016–2018 EPS growth rate is 31% and the stock has an EPS Rank of 96.

• RS Rating of 86. A/D Rating of A-. Up/Down volume ratio of 1.6.

Global Fintech Sector

Posted on May 9, 2018May 9, 2018 by Dean Kim

Attached is the latest Global Fintech Sector report from Executive Director, Research Analyst Dean Kim.

Some highlights from the report:

Two groups within the U.S. Fintech sector, Finance – Credit Card/Payment (G6413) and Computer Software – Financial (G2821), continue to outperform both S&P 500 and the NASDAQ year-to-date. We have eight payment processors and four financial software companies on our U.S. Focus List. Our top large-cap pick continues to be PYPL and our new small-cap pick is QTWO. We continue to believe that PYPL will expand its market share in the growing ecommerce space while maintaining a lock on current users. QTWO has a large potential market of smaller banks and credit unions that will benefit from its core banking software.

Outside of the U.S., we currently have two companies in the payment processor sector: WDIX.DE (Wirecard) and GMOP.JP (GMO Payments). Our top pick internationally is WDIX.DE, which continues to grow more than 25% organically with margin expansion due to its push into emerging Asian markets for payment processing.

Global Financial Sector

Posted on April 12, 2018April 13, 2018 by Dean Kim

Some highlights from the report:

U.S.
1. U.S. bank stocks have faltered along with the market correction that began in January and the 10-year bond yield’s failure to break above long-term resistance (3.0%). Concerns of a flattening yield curve have also put a damper on banks, although underlying fundamentals are showing improvements with forecast estimates rising. We will likely see positive Q1 2018 results as banks kick off earnings, but the overall sentiment is governed by the 10-year bond yield, which has a high correlation to stock prices.
2. Large money center banks are currently trading below or at the 100-DMA, while regional banks are faring better closer to the 50-DMA. We recommend adding to positions above the 50-DMA on strong volume.
3. We have SCHW and MKTX on the brokerage side on our Focus List. Both are trading below the 50-DMA. However, fundamentals look appealing for both stocks as rising rates and volatility help drive earnings.
4. Our top pick continues to be SIVB.
EMEA
1. European banks are underperforming on a long-term basis and currently retreating from short-term outperformance. The cost of funding is on the rise with the three-month LIBOR-OIS rate at a nine-year high. In addition, system-wide loan growth continues to be tepid at low single-digits.
2. As a result, we continue to struggle to find higher growth banks in Europe.
APAC
1. Indian banks look to be building the right side of bases with Indusind Bank ( IBK.IN ) breaking out. We continue to be bullish on India’s healthy GDP growth and under-levered economy with respect to loans. Indian banks continue to be a bright spot globally with +25% loan growth, +23% ROE, and very low net NPAs.
2. Indonesian banks are attractive in 2018 as the government is pushing for double-digit loan growth.
3. Our top picks are IBK.IN , IEZ.IN , and GRU.IN .

Indonesian Banks

Posted on March 19, 2018February 1, 2019 by Dean Kim

The Indonesian banking sector looks set for double-digit system-wide loan growth supported by higher GDP growth expectations, low inflation, and an underpenetrated banking system. Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan) expects loan growth to pick up in 2018. We have two banks in Indonesia on our Global Focus List that are currently attempting to build the right side of a consolidation base: Bank Negara Indonesia and Bank Tabungan Negara.