United Rentals (URI) – $26B market cap; $346M ADV: We removed United Rentals from our U.S. Focus List due to technical deterioration. The stock has declined 23% from its 52-week high in the past three weeks
and is trading below its 100-DMA. We see next support along its 200-DMA (-9%)
Author: gundaboina saikiran
O’Neil Capital Equipment Sector Weekly
U.S. Economic Summary
Q4 GDP up 2.7% as per second estimate: Per the second estimate, the UYSY economy grew 2Y7% y/y in Q4,
20bps below the advance estimatesY Consumer spending rose 1Y4%, the least since Q1 2022, and below
2Y1% in the advance estimateY Spending on goods declined 0Y5%, revised from an initial estimate of a
1Y1% riseY Spending on services increased 2Y4%, also below the 2Y6% in the advance estimateY Net trade
contribution was also revised lower as exports fell further and imports declined lessY
O’Neil Capital Equipment Sector Weekly
Epiroc (EPIA.SE) won its largest ever automation order worth $70M, which involves converting 96 haul trucks to driverless vehicles. The vehicles will be used at the Roy Hill mine in Australia. The stock reclaimed its
100-DMA on above average volume and faces resistance along its declining 21-DMA. It is consolidating in a stage-one flat base and is actionable above SEK 217.6 (+9%). It has an RS Rating of 70 and an A/D Rating
of C.
O’Neil Capital Equipment Sector Weekly
General Electric (GE) sells partial stake in AerCap (AER): GE is selling $1.6B worth of shares in AerCap holdings as part of a plan to wind down its nearly $7B stake in the aircraft
leasing company. GE owns 45% of AerCap following the 2021 deal that combined GE’s leasing business with AerCap. GE has previously said it planned to eventually monetize its stake in
AerCap (world’s largest aircraft lessor).
O’Neil Capital Equipment Sector Weekly
Korea Aerospace Industries (ZCM.KR) FA-50 was chosen by Malaysia to replace its aging fighter aircraft fleet. The initial order for 18 aircraft worth $920M can be extended for another 18. The deliveries are expected to start
in 2026. The stock failed to reclaim its 200-DMA and has a declining technical profile. Avoid.
O’Neil Capital Equipment Sector Weekly
Discerene Group, a long-term shareholder (3.6% stake) of IAA, has indicated that it will vote against the proposed offer by Ritchie Bros Auctioneers (RBA.CA). Ritchie Bros Auctioneers revised its offer for IAA to $44.4 per share in
January from its initial headline offer of $46.88 per share. RBA.CA is testing support along its 200-DMA. It has a good RS Rating of 83 and an A/D Rating of B.
O’Neil Capital Equipment Sector Weekly
Air India placed an order for 470 aircrafts from Boeing (BA) and Airbus (AIRS.FR). Boeing will supply 220 aircrafts- 190 737-Max, 20 787-9 and 10 777-9s with an option for 70 more aircrafts. Airbus will supply 250 aircrafts. This is the
single largest order in aviation history by an airline. The aircrafts are expected to be delivered from the second half of 2023. BA is extended and is trading at a 52-week high. It has a good RS Rating of 94 and an A/D Rating of A+.
AIRS.FR has pulled back to its 50-DMA after failing to breakout of a stage-one consolidation base and has poor RS Rating of 69 and an A/D Rating of D.
ITC
ITC is one of the big conglomerate businesses in India, with a presence in tobacco,
FMCG, hotel, packaging & paper, agricultural commodities, and IT spaces.
In the FMCG space, it has a presence in cigarettes, food, personal care products,
stationery products, agarbattis, and safety matches. Its portfolio comprises iconic
brands like Ashirwad, Classmate, Gold Flake, and Classic.
The company is the second largest exporter of agricultural products in India. It is involved in wheat, rice, pulses,
marine products like shrimp, processed foods, and feed ingredients like soyameal.
O’Neil Capital Equipment Sector Weekly
Federal Signal (FSS) – $3B market cap; $17M ADV: We added Federal Signal to our U.S. Focus List after the stock broke out of a stage-one cup base to a 52-week high. It manufactures specialized vehicles like street sweepers,
sewer cleaners, safe digging equipment, and public announcement systems. The environmental solutions segment (83% of revenue) may benefit from the $350B investment in upgradation of local equipment and infrastructure in the
U.S., while the safety and security segment (17% of revenue) may see margin improvement from higher levels of digitization in its products. Consensus expects revenue CAGR of 13% and an adjusted EPS CAGR of 16% over the next
two years with adjusted EBITDA margin expanding 150–200bps. Fundamental & Technical note
