Author: Derek Higa

Derek Higa is a senior equity analyst and a lead for the APAC region and the Consumer Cyclical sector. He serves on the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets, and compiles Asia Watch, a weekly recap of regional investing news. Since joining William O’Neil + Company in 2005, he has lent his market expertise to alpha capture, product development, and historical studies on outperforming stocks. Derek graduated summa cum laude from California State University Los Angeles with a B.S. in Finance and Information Systems. He holds a Series 65 securities license.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

 

Please refer to the attached PDF for the full report.

 

  • On July 18, we moved Japan to an Uptrend Under Pressure from a Confirmed Uptrend. Ten of 13 markets are in a Confirmed Uptrend, with Japan and India in an Uptrend Under Pressure and South Korea on day 39 of a Rally Attempt.
  • The Japan-South Korea trade dispute is in status quo with the decision of whether to remove South Korea from Japan’s preferred trading partners list expected as early as this week. See KOSPI annotations on page 8 and Korean Negative Alerts on page 9.
  • Australia is trading at all-time highs not seen since November 2007, before the global financial crisis. Basic Material and Consumer Staple stocks have performed well in the near term. Refer to page 10 for ASX All Ordinary Index annotations.
  • Refer page 11 for notable Australian mining ideas with good Composite Ratings.
  • Highlighted Focus List Ideas: A2 Milk (

    ) and Nanosonics (

    ). Refer to annotated charts on pages 6 and 7.

  • Refer to page 12 for ideas near trading near pivot in Australia.
  • Refer to page 13 for APAC Actionable Focus List ideas.

Match Group

Posted on by Derek Higa

Key points:

  • We are reiterating our Buy Recommendation on MTCH as shares are breaking out to all-time highs from an early stage base. The Company is the market leader in an underpenetrated online dating business with a huge opportunity in Asia. Q2 results are expected on August 7.
  • Shares are breaking out of a stage-two nine-week flat base on above average volume and are currently actionable.
  • EPS Rank of 88, Composite Rating of 95, and SMR Rating of A indicate good fundamentals.
  • RS line is near an all-time high. RS Rating of 97 indicates good technicals.
  • The number of institutions holding the stock grew 32.2% y/y to 501 in March.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

 

Please refer to the attached PDF for the full report.

 

  • Eleven of 13 APAC markets are in a Confirmed Uptrend. Australia and New Zealand are the two constructive markets in the region.
  • Concerns about Japan are rising with a clustering of distribution days amid trade tensions with South Korea. We look forward to Japan’s announcement of preferred trading partners on July 24. Refer to page 8 for an annotated chart of the Nikkei 225 Index.
  • For notable Japan ideas with high negative alert counts see pages 9 and 10.
  • Southeast Asian markets remain in a Confirmed Uptrend. Small-cap stocks are leading in the region. Refer to pages 11 and 12 for annotated index charts for Thailand and the Philippines.
  • Consumer-facing stocks are performing better than the broader market in Southeast Asia. Refer to page 5 for consumer ideas near pivots.
  • Highlighted Focus List Idea: Bank Central Asia ( BCA.ID ). Refer to page 7 for annotated chart.
  • Refer to page 13 for other notable ideas from Southeast Asia.
  • Refer to page 14 for APAC Actionable Ideas.

Walt Disney Company

Posted on by Derek Higa

Key points:

 

  • Shares broke out of a second-stage seven-week cup base on above average volume and are currently actionable. Following Disney’s investor conference on April 11, it gapped up 10% to an all-time high, breaking out of a 40-month consolidation.
  • With strong performance expected from studio entertainment this year, the expansion of its parks and resorts, and the planned rollout of Disney+, we expect revenue growth to be strong in Q2 and beyond.
  • Good fundamental ratings: Composite Rating of 79, SMR Rating of B, and EPS Rank of 59, which is affected by the Company’s investment in its DTC platform.
  • Good technical ratings: RS line trending upward with an RS Rating of 94 and an A/D Rating of B.
  • Institutional sponsorship has increased steadily to 3,672 (12% q/q; 26% y/y) as of March 2019.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

 

Please refer to the attached PDF for the full report.

 

  • Eleven of 13 APAC markets are in a Confirmed Uptrend. The average number of distribution days has increased slightly to 2.6.
  • Reaction to India’s budget has been a drag on the market. We shifted India to an Uptrend Under Pressure as weakness broadened across sectors. We recommend a cautious approach. Refer to page 6 for an annotated Sensex Datagraph™.
  • See page 7 for Indian ideas with high negative alert scores.
  • Indian Financial ideas have performed relatively better. NBFC, including Focus List ideas HDFC ( HDF.IN ) and Bajaj Finance ( BJF.IN ), have benefited from the Indian budget.
  • Highlighted Focus List idea: Bajaj Finance ( BJF.IN ). Annotated chart on page 5.
  • Refer to page 8 for actionable Focus List ideas.

Chegg Inc

Posted on by Derek Higa
  • Shares broke out of a stage-two 16-week consolidation base on higher volume and are currently actionable.
  • Best-in-class fundamental ratings: EPS Rank of 99, Composite Rating of 99, and SMR Rating of A.
  • Good technical ratings: RS Rating of 93 and A/D Rating of B+
  • The number of institutional holdings was 465 (+38% y/y) in June 2019.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Twelve of 13 APAC markets are in a Confirmed Uptrend; we recommend gradually increasing allocation of capital.

India is in a Confirmed Uptrend. With a newly elected government presenting its FY20 budget on July 5, we expect consumer and infrastructure-related to be among benefiting industry groups.

Refer to page 8 for consumer and infrastructure ideas from India.

Highlighted Focus List idea – Bata India (BIN.IN). Refer to annotated chart on page 6.

Refer to page 9 for APAC actionable ideas.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • We shifted China to a Confirmed Uptrend from Under Pressure last Thursday.
  • Investors are advised to follow a wait-and-see approach, as we expect markets to be range-bound going into the G-20 meeting in Japan this week.
  • India and Australia continue to be in a strong uptrend year-to-date.
  • Thailand, Australia, and Taiwan had the highest percentage of stocks breaking out in the last three weeks. See leading Thai ideas on page 3.
  • APAC breakouts were predominantly in the Utility, Financial, and Technology sectors.
  • Highlighted Focus List ideas: Chailease Holdings ( CLI.TW ) and Tata Consultancy Services ( TSE.IN ). Annotated charts on pages 6 and 8.
  • Find a list of top ideas in the Financial and Technology sectors on page 9.
  • Find actionable Focus List ideas list on page 10.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

 

Please refer to the attached PDF for the full report.

 

  • We have moved Hong Kong, Japan, Taiwan, and Thailand to a Confirmed Uptrend from a Rally Attempt.
  • Investors are advised to allocate their capital gradually as follow-through days could fail amid the outcome of the U.S. Federal Reserve meeting and the Trump-Xi meet at the G-20 next week.
  • Refer to pages 3–6 for detailed Datagraphs of the indices.
  • Refer to pages 7–9 for near pivot/actionable ideas from these markets.
  • Refer to page 10 for our actionable ideas from APAC.

June 13, 2019 – APAC Market Overview: Leading Markets, Themes, and Ideas with Derek Higa

Posted on by Derek Higa

Several APAC markets are in a Rally Attempt and could have a follow-through day in the coming sessions, warranting an update to a Confirmed Uptrend. For now, our investment approach remains cautious, however, we continue to notice pockets of strength in APAC. In this week’s webinar, Director, Research Analyst Derek Higa will highlight APAC market conditions and sector rotation. He’ll be joined by other William O’Neil + Co. analysts to examine the themes and ideas they think warrant your attention.