Grid R1000 20171017 - Research 2nd Ave S, Ste. 1225 Minneapolis, MN 55402 Compass ... 6RXWK $PHULFDQ $LUOLQHV FRQWLQXH WR OHDG WKLV 6HFWRU $WWUDFWLYH QDPHV LQFOXGH LTM, CPA, and GOL

10/18/17 Sector trends reinforce bullish outlookSector-level trends still endorse the risk-on trade. In addition to Tech’s tenure as long-term leadership, other cyclicals continue to congregate at the top of our weekly relative strength rankings, including Materials, Manufacturing, and Transports (as well as Health Care). Of these, Manufacturing just broke out to all-time relative strength highs (see chart below), re-inforcing its overweight status. These trends, in addition to improving technicals overseas,

Further down our rankings, improvements are visible in other Sectors, including Energy and Consumer Discretionary. Energy, which we have highlighted extensively for the past month, continues to work through a bottoming process, with both Brent and WTI emerging from multi-year bottoms. We view this Sector as an attractive market-weight. And in Consumer Discre-tionary, though still a laggard, pockets of strength continue to develop in areas like Autos, Homebuilders, and Hotels and Casinos.

In this week’s report we focus on actionable ideas in four Groups, one from our Manufacturing Sector, three from Materials:

• Specialty Metals (MA-03). KRO, ATI, GSM, CRS, USAP... page 6-8

• Large-Cap Specialty Chemicals (MA-08). AIQUY, PX, APD, AKZOY, ALB, CC, OLN... page 9-12

• Plastics, Polymers, & Resins (MA-10). POL, KRA, SHLM, OMN, CMT... page 13-15

• Engineered Metals/Materials (MF-37). LECO, VMI, HSC, TRB, PKOH, HNH, BOOM, FSTR, EML... page 16-20

John Betz, CMTGlobal [email protected]

David Nicoski, CMT

[email protected]

Joseph Jasper, CFAPresident [email protected]

Eric AndersonInstitutional [email protected]

Michael SchemelInstitutional [email protected]

Vermilion Research LLC920 2nd Ave S, Ste. 1225Minneapolis, MN 55402

CompassU.S. Technical Strategy

MF-Manufacturing

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

4 4

6 6

8 8

10 10

20 20

40 40

60 60

80 80

100 100

vs Equal Wtd Index 10/13/2017

RS RankOUTP ( 1-10)

NEUT (11-20)

UNDP (21-30)

MACD

0 0

Overweight. OurManufacturing Sector isbreaking out to all-time priceand relative strength highs.

MARKET OBSERVATIONS Manufacturing tops our Sector rankings.

Sector Rankings (RSR)Manufacturing just surpassed Health Care as our top-ranked (equal-weighted) Sector. Overweight.

Health Care, though no longer in the pole position, re-mains a leader, with biotechs exhibiting attractive entry points.

Materials and Tech are close on the heels of Manufactur-ing and Health Care.

Energy (market weight) continues to creep higher in our weekly rankings. It’s not a leader, but it no longer ranks dead-last; that honor now belongs to Consumer Staples (underweight).

No weighting changes

No changes to our Sector weightings this week.

Materials is on-deck for a potential upgrade.

Compass 2

Sector Highlights

Communications: Underweight

RS remains mediocre.

GOOG, GOOGL, BIDU, BABA, YNDX, IAC and BCOR.SPGI, MCO, MORN.

EBAY, WUBA, ATHM, BITA, GRPN, WBMD, ETSY, BZUN, RATE, SFUN, LPSN, ANGI, LLNW, XNET, TTGT, QNST, FB, WB, YELP, YY, ZNGA and MTCH.

Consumer Discretionary: Underweight • • GM is leading this campaign in the U.S., and F

• MAR, HLT, WYN, HGV, VAC.•

Consumer Staples: Underweight• GIS• PPC, TSN, WMT, CL, MNST, and KO.

Energy: Market Weight•

CVX, RDS.A, BP, STO, COP, EOG, OXY, PBR, CNQ, REPYY, APC, DVN, CXO, PDCE, MTDR, SM, SLB, HAL, RES, NR, OII, PTEN, and NBR.

• PSX, VLO, MPC, ANDV, HFC, PBF, CVI, CVRR, ALDW and CLMT.

Financials: Market Weight• -

ITUB, BBD, BAP, BCH, BSAC, BMA, BSMX, and GGAL.

-clude RY, TD, BNS, BMO and CM.

BLK, STT, AMP, TROW, AMG, SEIC, APO, EV, LPLA and FII.

JPM, C, GS, MS, SCHW, CS, AMTD, ETFC, BGCP, SF, MD, HLI, ITG, LTS, & COWN.

MMC, AON, WLTW, AJG, BRO, EHTH, HIRQ, MFC, AFL, SLF, AEG, KMPR, AZSEY, AXAHY, ING, HIG, CB, TRV, ALL, PGR, MKL, FNF, CINF, FAF, NAVG, MBI, SAFT, FNFV, KNSL, and TRUP.

MTG, RDN, ESNT, and NMIH.

PLD, DCT, DFT, FR, EGP, STAG, REXR, TRNO, MNR, and HIFR.

Compass 3

Sector Highlights

Health Care: Overweight• Health Care ranks just behind Manufacturing, followed closely by Materials, Manufacturing, Tech, and Transports.• Biotechs remain a favorite theme, and recent comments by Trump relating to drug prices helped create attractive

pullback opportunities in names like AMGN, CELG, GILD, ALXN, NBIX and NKTR.• Pharma, led by JNJ (breaking out), exhibits continued improvements. Other actionable names: PFE, LLY, & AERI.• Actionable med device charts: ATRI, BAX, BDX, CMD, EW, HRC, IDXX, IVC, OMCL, PEN, RMD, and SYK.

Manufacturing: Overweight • Aero defense related names continue to dominate the Sector in terms of relative strength. Attractive names include:

BA, LMT, RTN, NOC, HII, ESLT, IIVI, AJRD, AVAV, TDG, TXT, SPR, OA, TDY, ERJ, HEI.A, HEI, CVU, SPA, COL, HRS, LLL, DGI, GOGO, CMTL, MOG.A, KTOS, and MOG.B.

ETN, AXL, DAN, VC, DLPH, CPS, MGA, LEA, ALV, BWA, WBC, ADNT, LCII, MTOR, FOXF, MOD, BLDP, and SPAR.

• Our Trucks and Components Group (MF-14) is breaking to historical price highs, and RS continues to point in a northerly direction. Attractive names include: CMI, PCAR, OSK, NAV, RUSHA, WNC, CYD, PLOW, BLBD, RUSHB, STS and MLR.

include: TRN, GBX, TPIC, FSTR and RAIL. • Construction Equipment is another leadership Group with many technically attractive names: CAT, CAE, TEX,

RUSHA, MTW, ALG, HY, and CMCO.• Instrumentation and Process Controls is another standout in the Sector. Attractive names include: DHR, ROP, FTV,

ROK, AME, THR and BMI. • Industrial Rental Equipment (Group MF-30) is breaking to new highs with names such as URI, HRI, HEES and

NEFF leading the way. -

pected surge in demand from Irma. Attractive names include: MAS, OC, USG, JELD, BECN, AWI, TREX, SSD, BLD, BLDR, and IBP.

• Group MF-37 Engineered Metals /Materials is breaking a long-term price and RS downtrend. This group is featured in this week’s compass. Attractive names: LECO, B, VMI, IIVI, MCRN, HSC, MCRN, TRS, BRSS, PKOH.

Materials: Market Weight• Non-U.S. Steel is a leadership group. Attractive names include: RIO, MT, PKX, TX, GGB, and SID.• Specialty metals and Aluminum are also leadership. Attractive names include: KRO, ATI, GSM, CRS, NHYDY,

AA, AWCNY, ACH, CENX, KALU and CSTM. • Chemicals continue to plod ahead and contain many technically attractive names, such as: DWDP, BASFY, DD,

LYB, CE, EMN, FMC, HUN, WLK, MEOH, BAK, SHI, OEC, APD, AKZOY, AIQUY, PX, ALB, and CC.•

the aftermath of Irma. Attractive names include: WY, IP, LPX, UFS, BCC, and DEL. • BHP, RIO, BBL, NGLOY, and TECK.• SCCO, FCX, TECK,

TRQ, LUNMF, and TGB.• Gold Miners appear to be carving out a bottom and look to be turning up at a major area of support. Attractive names

that have pulled back to support include: NEM, ABX, FNV, GG, AEM, RGLD, KGC, BVN, IAG, AUY, BTG, NGD, AGI, NG, MUX, SA, RIC, TGB, GOLD, and GFI.

Services: Market Weight• Services continues to hover in the middle of our weekly relative strength rankings, reinforcing our market weight.• Our Data Processing Groups contain actionable breakouts: FLT, WEX (10-month base), G, & SYNT.• VRNT, CIGI, NSCC, and LAKE.

Compass 4

Sector Highlights

Technology: Overweight• XLK•

CAVM, CEVA, CREE, IDTI, KLAC, KLIC, MRVL, NANO, SIMO, & SWKS.

• ATVI, BLKB, CDK, CRM, CTXS, EBIX, MANH , PCTY, PTC, VRNT, and WDAY.

• CREE

Transports: Market Weight LTM, CPA, and GOL.

CHRW, XPO, LSTR, AAWW, FWRD, ATSG, JBHT, ODFL, LSTR, KNX, WERN, SWFT, SNDR, HTLD, SAIA, MRTN, ARCB, ULH, FRPH, YRCW, CVTI, RRTS, CGI, and PTSI.

AER, R, AL, CAR, HTZ, FTAI, TGH, and CAI.

RYAAY, ICAGY, DLAKY, AFLYY, and KLMR.

Utilities: Underweight• not -

Actionable Groups:

Compass 5

Attractive Groups: MA-03 Metals, Specialty

5

10

15

20

2530

KRO-USAKronos Worldwide, Inc. $25.92 Produces and markets value-added titanium dioxidePrice Chg: 0.16 % Chg: 0.62 Avg Vol: 370,076 Yield: 2.3 % MktCap: 3,004 MM 2017E P/E: 17.6x 2018E P/E 14.5x

US dollarsPrice 50 Day Moving Average 200 Day Moving Average

20

40

60

80100120140160

Kronos Worldwide, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Kronos Worldwide, Inc. - Relative Strength Index (RSI)

0

1,000

2,000

10/17/2017Kronos Worldwide, Inc. - Volume - Daily - for Date Requested

MA-03 Metals, Specialty

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2 2

4 4

6 6

8 8

10 10

20 20

40 40

60 60

80 80

100 100

1 1

SYM RSRTC MDKRO 1 U3 +ATI 1 U3 +GSM 2 U3 +CRS 1 U3 +

USAP 2 U3 +


RS RankOUTP ( 1-10)

NEUT (11-20)

UNDP (21-30)

MACD

0 0

Compass 6

Accumulate. Major priceand RS reversals.

Accumulate. Priceand RS uptrendsremain intact.


6

8

10

12

14

16

18202224

GSM-USAFerroglobe PLC $14.58 Operates as a holding company with interests in siPrice Chg: 0.02 % Chg: 0.14 Avg Vol: 673,645 Yield: 0 % MktCap: 2,505 MM 2017E P/E: 177.6x 2018E P/E 17.8x


40

50

60

708090100110

Ferroglobe PLC - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Ferroglobe PLC - Relative Strength Index (RSI)

04,0008,00012,000

10/17/2017Ferroglobe PLC - Volume - Daily - for Date Requested

10

15

20

25

303540

ATI-USA Metals & MiningAllegheny Technologies Incorporated $24.48 Manufactures steel and specialty metalsPrice Chg: -0.47 % Chg: -1.88 Avg Vol: 2,098,957 Yield: 0 % MktCap: 2,665 MM 2017E P/E: 59.1x 2018E P/E 22.0x


30

40

5060708090100

Allegheny Technologies Incorporated - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Allegheny Technologies Incorporated - Relative Strength Index (RSI)

0

10,000

20,000

10/17/2017Allegheny Technologies Incorporated - Volume - Daily - for Date Requested

Compass 7

Accumulate. Bullishbase. RS at multi-year highs.

Accumulate. Bullishbase. RS at multi-year highs.


5

10

15

20

25

3035

USAP-USAUniversal Stainless & Alloy Products, Inc. $21.45 Manufactures and markets semi-finished and finishePrice Chg: -0.48 % Chg: -2.19 Avg Vol: 28,547 Yield: 0 % MktCap: 155 MM 2017E P/E: 63.6x 2018E P/E 26.7x


30

40

5060708090100110Universal Stainless & Alloy Products, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Universal Stainless & Alloy Products, Inc. - Relative Strength Index (RSI)

0

400

800

10/17/2017Universal Stainless & Alloy Products, Inc. - Volume - Daily - for Date Requested

25

30

35

40

45

50

55

60

CRS-USA Metals & MiningCarpenter Technology Corporation $49.97 Manufactures and distributes specialty metalsPrice Chg: 0.05 % Chg: 0.10 Avg Vol: 417,844 Yield: 1.4 % MktCap: 2,336 MM 2017E P/E: 46.2x 2018E P/E 22.6x


60

70

80

90

100

110Carpenter Technology Corporation - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Carpenter Technology Corporation - Relative Strength Index (RSI)

01,0002,0003,000

10/17/2017Carpenter Technology Corporation - Volume - Daily - for Date Requested

Compass 8

Accumulate. Topsidethe base. RS near amajor breakout.


Attractive Groups: MA-08 Specialty Chemicals, Large-Cap

17

18

19

20

21

22

23

24

25

AIQUY-USAAir Liquide SA Unsponsored ADR $24.46 Supplies gases, technologies and services for thePrice Chg: -0.22 % Chg: -0.89 Avg Vol: 79,266 Yield: 1.6 % MktCap: 57,359 MM 2017E P/E: 21.8x 2018E P/E 19.9x


75

80

85

90

95

100

105Air Liquide SA Unsponsored ADR - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Air Liquide SA Unsponsored ADR - Relative Strength Index (RSI)

04008001,2001,600

10/17/2017Air Liquide SA Unsponsored ADR - Volume - Daily - for Date Requested

MA-08 Specialty Chemicals, Large-Cap

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2 2

4 4

6 6

8 810 10

20 20

40 40

60 60

80 80100 100

200 200

1 1

SYM SYMRSR RSRTC TCMD MDAIQUY 8 U3 +

PX 10 U3 +APD 14 U3 +

AKZOY16 U3 -ALB 2 U3 +CC 1 U3 +

OLN 3 U3 +NEU 27 U1 +

GRA 20 U3 +


RS RankOUTP ( 1-10)

NEUT (11-20)

UNDP (21-30)

MACD0 0

Compass 9

Accumulate. Long-termprice and RS uptrendsremain intact.

Accumulate. Topside a bullishbase. RS at multi-month highs.


110

120

130

140

150

APD-USA ChemicalsAir Products and Chemicals, Inc. $153.47 Manufactures hydrogen, helium, and other industriaPrice Chg: 0.25 % Chg: 0.16 Avg Vol: 1,299,333 Yield: 2.5 % MktCap: 33,450 MM 2017E P/E: 24.6x 2018E P/E 22.1x


90

95

100

105

110Air Products and Chemicals, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Air Products and Chemicals, Inc. - Relative Strength Index (RSI)

04,0008,00012,000

10/17/2017Air Products and Chemicals, Inc. - Volume - Daily - for Date Requested

100

110

120

130

140

PX-USA ChemicalsPraxair, Inc. $141.44 Produces and distributes industrial gasesPrice Chg: 0.15 % Chg: 0.11 Avg Vol: 1,337,993 Yield: 2.2 % MktCap: 40,461 MM 2017E P/E: 24.6x 2018E P/E 22.5x


75

80

85

90

95

100Praxair, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Praxair, Inc. - Relative Strength Index (RSI)

2,0004,0006,000

10/17/2017Praxair, Inc. - Volume - Daily - for Date Requested

Compass 10

Accumulate. Topside thebase. Major RS reversal.

Accumulate. Topside amajor base. RS isconstructive.


40

60

80

100

120

140

160

ALB-USA ChemicalsAlbemarle Corporation $139.41 Manufactures and markets specialty polymers, chemiPrice Chg: -0.75 % Chg: -0.54 Avg Vol: 1,286,230 Yield: 0.9 % MktCap: 15,401 MM 2017E P/E: 32.0x 2018E P/E 27.8x


80

100

120

140

160180200Albemarle Corporation - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Albemarle Corporation - Relative Strength Index (RSI)

0

10,000

20,000

10/17/2017Albemarle Corporation - Volume - Daily - for Date Requested

18

20

22

24

26

28

30

32

AKZOY-USAAkzo Nobel N.V. Sponsored ADR $30.74 Manufactures and sells decorative paints, performaPrice Chg: -0.26 % Chg: -0.83 Avg Vol: 90,850 Yield: 1.6 % MktCap: 23,239 MM 2017E P/E: 18.6x 2018E P/E 17.7x


80

85

90

95

100

105110115Akzo Nobel N.V. Sponsored ADR - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

40

60

80

Akzo Nobel N.V. Sponsored ADR - Relative Strength Index (RSI)

04008001,2001,600

10/17/2017Akzo Nobel N.V. Sponsored ADR - Volume - Daily - for Date Requested

Compass 11

Accumulate. Price and RSuptrends remain intact.


2

345678910

20

30405060

CC-USA ChemicalsChemours Co. $56.85 Provides performance chemicalsPrice Chg: -0.16 % Chg: -0.28 Avg Vol: 3,000,658 Yield: 0.2 % MktCap: 10,506 MM 2017E P/E: 16.0x 2018E P/E 11.8x


10

2030405060

100

200

Chemours Co. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Chemours Co. - Relative Strength Index (RSI)

010,00020,00030,000

10/17/2017Chemours Co. - Volume - Daily - for Date Requested


15

20

25

30

35

OLN-USA ChemicalsOlin Corporation $34.81 Engages in manufacturing and distributing the chemPrice Chg: -0.65 % Chg: -1.83 Avg Vol: 2,199,476 Yield: 2.3 % MktCap: 5,787 MM 2017E P/E: 31.5x 2018E P/E 15.9x


60

70

80

90100110120

Olin Corporation - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Olin Corporation - Relative Strength Index (RSI)

0

10,000

20,000

10/17/2017Olin Corporation - Volume - Daily - for Date Requested

Compass 12


Accumulate. Topside amajor base. RS uptrendremains intact.

Attractive Groups: MA-10 Plastics, Polymers & Resins

25

30

35

40

POL-USA ChemicalsPolyOne Corporation $41.01 Manufactures specialized polymer materialsPrice Chg: -0.55 % Chg: -1.32 Avg Vol: 532,500 Yield: 1.7 % MktCap: 3,354 MM 2017E P/E: 18.8x 2018E P/E 16.6x


70

75

80

85

9095100105

PolyOne Corporation - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80PolyOne Corporation - Relative Strength Index (RSI)

0

1,000

2,000

10/17/2017PolyOne Corporation - Volume - Daily - for Date Requested

MA-10 Plastics, Polymers & Resins

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2 2

4 4

6 6

8 8

10 10

20 20

40 40

1 1

SYM SYMRSR RSRTC TCMD MDPOL 7 U2 +TSE 9 U3 +SCL 14 U2 +KRA 2 U3 +

SHLM 1 U3 +OMN 2 U3 +LNDC 27 D3 -CXDC 16 U2 +

CMT 9 U3 +ITKG 1 U2 +


RS RankOUTP ( 1-10)

NEUT (11-20)

UNDP (21-30)

MACD

0 0

Compass 13

Accumulate. Newprice highs. RSnear 14-year highs.

Accumulate. Topside amajor base. Major RSreversal.


20

25

30

35

40

45

50

SHLM-USA ChemicalsA. Schulman, Inc. $36.85 Produces and supplies plastic compounds and resinsPrice Chg: -0.75 % Chg: -1.99 Avg Vol: 218,011 Yield: 2.2 % MktCap: 1,084 MM 2017E P/E: 22.6x 2018E P/E 17.6x


60

70

80

90100110120130140150A. Schulman, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80A. Schulman, Inc. - Relative Strength Index (RSI)

0

1,000

2,000

10/17/2017A. Schulman, Inc. - Volume - Daily - for Date Requested

15

20

25

30

35

40

45

KRA-USA ChemicalsKraton Corporation $41.41 Manufactures and markets styrenic block copolymersPrice Chg: -0.55 % Chg: -1.31 Avg Vol: 322,570 Yield: 0 % MktCap: 1,290 MM 2017E P/E: 18.8x 2018E P/E 12.3x


80

100

120

140160180200

Kraton Corporation - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Kraton Corporation - Relative Strength Index (RSI)

0

2,000

4,000

10/17/2017Kraton Corporation - Volume - Daily - for Date Requested

Compass 14

Accumulate. Newprice and RS highs.

Accumulate.Bullish base.RS reversal.


10

15

20

25

30

CMT-USACore Molding Technologies, Inc. $22.63 Engages in molding fiberglass reinforced plasticsPrice Chg: -0.01 % Chg: -0.04 Avg Vol: 44,971 Yield: 0.9 % MktCap: 179 MM 2017E P/E: x 2018E P/E x


60

80

100

120

140160180200Core Molding Technologies, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80

Core Molding Technologies, Inc. - Relative Strength Index (RSI)

0200400600

10/17/2017Core Molding Technologies, Inc. - Volume - Daily - for Date Requested

5

6

7

8

9

10

1112

OMN-USAOMNOVA Solutions Inc. $11.05 Develops, manufactures, and markets emulsion polymPrice Chg: 0.00 % Chg: 0.00 Avg Vol: 151,143 Yield: 0 % MktCap: 496 MM 2017E P/E: 18.4x 2018E P/E 15.6x


80

90

100

110

120130140150

OMNOVA Solutions Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80OMNOVA Solutions Inc. - Relative Strength Index (RSI)

0

800

1,600

10/17/2017OMNOVA Solutions Inc. - Volume - Daily - for Date Requested

Compass 15

Accumulate.New price highs.RS reversal.

Accumulate. Topside abullish base. RS uptrendremains intact.

Attractive Groups: MF-37 Engineered Metals/Materials

50

60

70

80

90

100

LECO-USA MachineryLincoln Electric Holdings, Inc. $94.44 Manufactures welding, cutting and brazing productsPrice Chg: -0.43 % Chg: -0.45 Avg Vol: 425,912 Yield: 1.5 % MktCap: 6,224 MM 2017E P/E: 25.3x 2018E P/E 22.7x


70

75

80859095100105110115

Lincoln Electric Holdings, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Lincoln Electric Holdings, Inc. - Relative Strength Index (RSI)

01,0002,0003,000

10/17/2017Lincoln Electric Holdings, Inc. - Volume - Daily - for Date Requested

MF-37 Engineered Metals/Materials

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2 2

4 4

6 6

8 8

10 10

20 20

40 40

60 60

80 80SYM SYMRSR RSRTC TCMD MDLECO 16 U2 +

CR 16 U2 +B 2 U3 +

VMI 16 U3 +I IV I 2 U3 +M L I 5 U3 +HSC 1 U3 +

MCRN 14 U1 +

TRS 2 U3 +BRSS 8 U2 +PKOH 2 U3 +DBMG 12 U3 -HNH 24 D1 -

BOOM 1 U3 +FSTR 1 U3 +EML 11 U2 +


RS RankOUTP ( 1-10)

NEUT (11-20)

UNDP (21-30)

MACD

0 0

Compass 16

Accumulate. New pricehighs. Major RS reversal.



5

10

15

20

25

HSC-USA MachineryHarsco Corporation $21.15 Manufacture steel productsPrice Chg: -0.70 % Chg: -3.20 Avg Vol: 689,893 Yield: 0 % MktCap: 1,701 MM 2017E P/E: 34.2x 2018E P/E 28.9x


20

30

405060708090100110

Harsco Corporation - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Harsco Corporation - Relative Strength Index (RSI)

04,000

8,000

12,000

10/17/2017Harsco Corporation - Volume - Daily - for Date Requested

90

100

110

120

130

140

150

160

170

VMI-USA Construction & EngineeringValmont Industries, Inc. $158.95 Manufactures and produces fabricated metal productPrice Chg: -0.20 % Chg: -0.13 Avg Vol: 184,896 Yield: 0.9 % MktCap: 3,591 MM 2017E P/E: 22.5x 2018E P/E 20.0x


65

70

75

80

859095100

Valmont Industries, Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80Valmont Industries, Inc. - Relative Strength Index (RSI)

0400

800

1,200

10/17/2017Valmont Industries, Inc. - Volume - Daily - for Date Requested

Compass 17

Accumulate. Priceuptrend remainsintact. RS reversal.


25

30

35

40

45

50

556065

PKOH-USAPark-Ohio Holdings Corp. $45.50 Provides supply chain logistics services and manufPrice Chg: -0.50 % Chg: -1.09 Avg Vol: 42,603 Yield: 1.1 % MktCap: 569 MM 2017E P/E: 14.4x 2018E P/E 12.1x


50

60

708090100110120

Park-Ohio Holdings Corp. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Park-Ohio Holdings Corp. - Relative Strength Index (RSI)

0200400600

10/17/2017Park-Ohio Holdings Corp. - Volume - Daily - for Date Requested

14

16

18

20

22

24

26

28

30

TRS-USATriMas Corporation $27.55 Designs, manufactures and distributes engineered aPrice Chg: -0.25 % Chg: -0.90 Avg Vol: 234,038 Yield: 0 % MktCap: 1,260 MM 2017E P/E: 19.5x 2018E P/E 17.9x


70

80

90

100

110

TriMas Corporation - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80TriMas Corporation - Relative Strength Index (RSI)

01,0002,0003,000

10/17/2017TriMas Corporation - Volume - Daily - for Date Requested


Compass 18

Accumulate. Topsidethe base. RS at multi-year highs.

Accumulate.Bullish base. RSis improving.


4

6

8

10

12

1416182022

BOOM-USADMC Global Inc. $17.50 Manufactures explosion welded clad metal platesPrice Chg: -0.45 % Chg: -2.51 Avg Vol: 72,508 Yield: 0.4 % MktCap: 258 MM 2017E P/E: 143.6x 2018E P/E 24.1x


30

40

50

60708090100

DMC Global Inc. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80DMC Global Inc. - Relative Strength Index (RSI)

0

1,000

2,000

10/17/2017DMC Global Inc. - Volume - Daily - for Date Requested

15

20

25

30

35

40

4550

HNH-USAHandy & Harman Ltd. $30.30 Engages in manufacturing of engineered niche indusPrice Chg: 0.00 % Chg: 0.00 Avg Vol: 17,696 Yield: 0 % MktCap: 371 MM 2017E P/E: x 2018E P/E x


40

60

80

100

120140

Handy & Harman Ltd. - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80Handy & Harman Ltd. - Relative Strength Index (RSI)

0

200

400

10/17/2017Handy & Harman Ltd. - Volume - Daily - for Date Requested

Compass 19

Normal pullback to thebase. RS uptrend remainsintact.

Accumulate. Topsidea bullish base. RSremains constructive.


14

16

18

20

22

24

26

283032

EML-USAEastern Company $29.95 Manufactures industrial hardware, security productPrice Chg: -0.65 % Chg: -2.12 Avg Vol: 13,142 Yield: 1.4 % MktCap: 187 MM 2017E P/E: x 2018E P/E x


90

100

110

120

130

140150160Eastern Company - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/1720

40

60

80

Eastern Company - Relative Strength Index (RSI)

0200400600

10/17/2017Eastern Company - Volume - Daily - for Date Requested

10

20

30

40

50

60

FSTR-USAL. B. Foster Company $25.70 Manufactures and distributes transportation and coPrice Chg: -0.35 % Chg: -1.34 Avg Vol: 76,740 Yield: 0 % MktCap: 266 MM 2017E P/E: x 2018E P/E x


10

20

304050607080100

L. B. Foster Company - Price Relative to S&P 500

1/15 4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17

20

40

60

80L. B. Foster Company - Relative Strength Index (RSI)

04008001,200

10/17/2017L. B. Foster Company - Volume - Daily - for Date Requested

Compass 20

Accumulate. Topside the base.RS at multi-month highs.

Accumulate. Price uptrendremains intact. RS remainsconstructive.

Com

pass

2

1

Com

pass

2

2

Com

pass

2

3

David P. Nicoski, CMT952-922-7502

[email protected]

Joe W. Jasper, CFA952-922-7501

[email protected]

John M. Betz, CMT952-922-7506

[email protected]

920 Second Avenue S., Ste. 1225 • Minneapolis, MN 55402 • 952-922-7500 • www.vermilioncap.com

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Grid R1000 20171017 - Research 2nd Ave S, Ste. 1225 Minneapolis, MN 55402 Compass ... 6RXWK $PHULFDQ $LUOLQHV FRQWLQXH WR OHDG WKLV 6HFWRU $WWUDFWLYH QDPHV LQFOXGH LTM, CPA, and GOL