E Ink (PVI.TW): Held its earnings call last week. It reported weaker-than-expected Q4 FY23 numbers in the previous week. Revenue (-32% y/y) missed estimates by 4%, while EPS (-32% y/y) missed estimates by 20%. We recommend that investors hold positions and look for support near TWD 220 (-5%), with next support at its 50-DMA (-9%).
Author: vipin khare
O’Neil Capital Equipment Sector Weekly
VAT (VACN.CH): Reported FY23 results yesterday before market open. Revenue (-23% y/y), came largely in line with estimates, while EPS (-38% y/y) beat estimates by 5%. Q1 FY24 revenue guidance came in 15% below estimates. The stock
has pulled back 6% from its 52-week high. We recommend investors hold positions and look for support at its 21-DMA (-1%), followed by its 50-DMA (-4%).
O’Neil Capital Equipment Sector Weekly
Federal Signal (FSS): Reported its Q4 FY23 results yesterday before market open. Revenue (+15% y/y) beat estimates by 5%, and adjusted EPS (+30% y/y) beat estimates by 14%. The stock is extended from an ideal buy point. We
recommend that investors add positions on a low-volume pullback to its 10- or 21-DMA.
O’Neil Capital Equipment Sector Weekly
E Ink (PVI.TW) – $8B market cap; $50M ADV: We added E Ink to the Emerging Markets Focus List as the stock broke out of a stage-two 34-week cup-with-handle base on above average volume. It is 5% off its 52-week high and is actionable
here. E Ink manufactures electronic paper displays used in e-readers, electronic shelf labels, and digital signage. The company pioneered the technology and is a global leader in the e-paper market with ~90% share. The market is expected to
have a 20%+ CAGR over the next four years. Adoption of electronic shelf labels by Walmart is expected to drive adoption across retailers in the U.S. Its TAM is expected to grow as newer applications, including colour-changing cars, billboards,
and indoor and outdoor signage, evolve. Consensus expects revenue and earnings to have a CAGR of 24% and 26%, respectively, in FY23–25.
O’Neil Capital Equipment Sector Weekly
TransDigm (TDG): Reported Q1 FY24 results. Revenue (+28% y/y) beat estimates by 7% and EPS (+56% y/y) beat estimates by 12%. The stock was down 1.6% post results and has taken support at its 10- DMA. We recommend that investors hold positions and look for a high volume bounce off its 10- or 21-DMA. On the downside it has support along its 21-DMA (-4%) followed by its 50-DMA (-9%).
O’Neil Capital Equipment Sector Weekly
TransDigm (TDG): Will report Q1 FY24 results Thursday before market open. Revenue is expected to grow 20% y/y and EPS to grow 40% y/y. The stock is extended after breaking out of a stage-two flat base and is trading close to its all-time highs. We recommend that investors hold positions into the print. It has support at its 21-DMA followed by its 50-DMA.
O’Neil Capital Equipment Sector Weekly
Larsen & Toubro (LST.IN): Reported mixed Q3 FY24 results yesterday after market close. Revenue (+19% y/y) beat estimates by 3%, while EPS (+18% y/y) missed estimates by 7%. The stock found support at
its 50-DMA (-1%) intraday. Add positions on a bounce off its 50-DMA on above average volume. Next support is at its 100-DMA (-8%).
O’Neil Capital Equipment Sector Weekly
Munters Group (MUGR.SE): The company published its preliminary numbers, which was unscheduled, after a ransomware attack at one of its service providers. Revenue (+22% y/y) missed estimates by 1%, while EPS
(-57% y/y) missed estimates by 81%.
EPS during the quarter was impacted by one-time expenses such as costs from restructuring and M&A activities and increase in financial and tax expenses.
Key highlight was 80% y/y growth in order intake, beating estimates by 49%.
Full results on February 1.
The stock pulled back 7% from its all-time highs and has found support along its 50-DMA (-3%). Next support is along its pivot at SEK 145.50 (-5%). Strong technical ratings: RS Rating of 93, A/D Rating of B+, and Up/Down
Volume ratio of 2.2
O’Neil Capital Equipment Sector Weekly
Saab (SAAB.SE) – $9B market cap; $20M ADV: We added Saab to our Developed Markets Focus List as the stock broke out of a stage-two 39-week consolidation base on above average volume into a new all-time high. Saab
manufactures equipment used in air defense, ground surveillance, and is a world leader in surface-based radar systems. The company is expected to benefit from the increase in defense expenditure across Europe, along with
Sweden’s possible accession to NATO. Saab has a strong order backlog of SEK 139B (+24% y/y), 3.3x its FY22 revenue, offering strong visibility. For FY23, management expects organic sales growth to be around 19–23% y/y and
operating income to outgrow organic sales. Fundamental & Technical note
O’Neil Capital Equipment Sector Weekly
Sterling Infrastructure (STRL) – $3B market cap; $35M ADV: We added Sterling Infrastructure to the U.S. Focus List as the stock broke out of a stage-three consolidation base. Sterling provides construction and site
development services for data centers, warehouse operators, public infrastructure projects, and homebuilders in the U.S. It benefits from the rising data center, electric battery, and semiconductor plants built out in the U.S. on the
back of onshore manufacturing trends. Shift toward high-margin commercial work should aid margin expansion. The recent drop in mortgage rates has caused housing starts in the U.S. to reach a record high of six months, which
should support demand for its building solutions. Consensus expects revenue to grow at a 12% CAGR and EPS to grow at a 21% CAGR over FY22–24
