What Worked Asia - 30 Jun 2017 - Value and to a lesser degree Size did well this week

What Worked

Value and to a lesser degree Beta dominated in South Korea this week. Dongkuk Steel Mill is up 13% and Daishin Securities is up 14%. In China, long-term momentum names did well this week. Grand Baoxin Auto Group is up 6% and China Tian Lun Gas Holdings is up 2%.

Nothing really significant stood out in Hong Kong and India. In Singapore it was all about high dividend yield names. Croesus Retail Trust is up 12% and Frasers Logistic & Industrial Trust is up 2%. In Taiwan, low PBR names and to a lesser degree Size outperformed this week. United Microelectronics is up 15% and Au Optronics Corp is up 8%.

Who Moved

157 names moved on volume this week. Taiwan pick up approx. a third of the volume spikes and HK/China also pick up a third of the spikes. The rest of the spikes were spread across the other regions. At the sector level, the Finance Sector picked up approx. a third of the volume spikes. On the positive side, Hongkong & Shanghai Hotels is up 28%, iNtRon Biotechnology is up 20% and Jaiprakash Associates Limited is up 20%. On the other side, BEP International Holdings is down 32%, Hua Hong Semiconductor is down 10% and TalkMed is down 9%.

Summary

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What Worked Japan - 30 Jun 2017 - Value and High Beta names dominated this week

What Worked

Value and high Beta named dominated this week. Low PBR names have not done this well since last August. Low PBR names have been stuck in a slump since the middle of April. Low PBR names that did well this week were Kobe Steel up 11% and JFE Holdings up 9%.

High Beta names also did well this week. The last time Beta was this strong was back in December of last year. High Beta name that did well were Hitachi Metals up 10% and TADANO up 9%. On the other side, names up over the last three months were really hurt the most this week. Toshiba is down 11%, Tokyo Electron is down 6% and Sohgo Security Services is down 5%. High ROE names also did not do well this week. Nitori Holdings is down 9% and Temp Holdings is down 7%. There was also a slight selloff in Size this week.

Who Moved

Only 11 names moved on volume this week. On the positive side, Oracle Corp is up 6% and Taiheiyo Cement is up 5%. On the other side, Sumitomo Dainippon Pharma is down 10% and Takashimaya Corp is down 6%.

Summary

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What Worked Australia - 30 Jun 2017 - PER very strong on the back of momentum reversal

What Worked

PER, both forward and trailing, were the standout factors for this week in the Aussie market, mounting a huge positive reversal on Low PER names after nearly 2 months of strong negative ICs. While the more expensive names in the market took a break this week, finishing largely in line with the benchmark, it was the cheaper names that took the show. Flexigroup Limited (FXL, +8.0%), Whitehaven Coal (WHC, +6.9%) and Seven West Media (SWM, +3.6%) all ended the week up, and yet still trading at sub-10x forward earnings.

While ROIC and ROE have gotten a couple of mentions over the last few weeks, ROIC finally dropped into the negative IC space, albeit only just. ROE still provided some returns, with almost equal performance in the top and bottom quintiles – high ROE names did well, low ROE names did not. As a factor, these signals are still looking overstretched and primed for a reversal. There was also a reasonably strong reversal in the mid-term momentum space, notably 3- month came off this week. While name up over the last 3 months still managed to outperform the index, it was the laggards that came out on top. Amongst the names down over the last 3 months that finished this week up were Sigma Healthcare (SIG, +3.8%), Galaxy Resources (GXY, +1.5%) and Greencross Limited (GXL, +10.6%). All of these names still have a way to go to break even after losses over the trailing 3 months

Who Moved

14 names in the benchmark S&P ASX 200 managed to move on volume this week, with an even spread between the losers and winners. On the losing side, Aveo Group (AOG, -8.9%), Crown Resorts (CWN, -3.8%) and Regis Healthcare (REG, -1.5%), while the winners circle included names such as Mineral Resources (MIN, +18.2%), SIMS Metal Management (SGM, +11.2%) and Bega Cheese (BGA, +9.7%).

Summary

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What Worked Asia - 23 Jun 2017 - Overall Dividend Yield did well in Asia

What Worked

Nothing really stood out in both China and Hong Kong this week. However names up last week in China were hurt this week. IMAX China Holdings is down 13% and Tian Ge Interactive is down 8%. In Singapore, high Dividend yield names continued to do well this week. Fortune Real Estate Investment is up 5% and Asian Pay Television Trust is up 6%.

In South Korea there was a slight selloff in high Dividend Yield names and a move into Growth. High growth names that did well were Samsung Electro-Mechanics is up 12% and Samsung SDI is up 12%. In Taiwan, large-cap names did well this week. Eclat Textile is up 9% and Airtac International is up 9%. Indonesia  and Malaysia saw a good selloff in Value and a move into Size. In the Philippines it was the opposite with Value doing well and large-cap names getting hurt this week. Vivant corp is down 10% and Belle Corp is down 6%.

Who Moved

182 names moved on volume this week. The volume spikes look to be well distributed across the different regions and sectors. On the positive side, GreaterChina Professional Services is up 19%, Lai Sun Development is up 12% and Jaiprakash Associates is up 16%. On the other side, SillaJen is down 16%, KEPCO is down 15% and Sapura Energy is down 15%.

Summary

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What Worked Australia - 23 Jun 2017 - Value Punished & Profitability still strong

What Worked

Value, in all its forms that we cover, was sold off this week. Of the Value signals, PBR was hit the hardest. In what has been a solid month of outperformance for the most expensive names in the market on a PBR basis, it was the cheaper side of the market that underperformed this week. Amongst the cheapest names on a PBR basis that finished lower was Santos Limited (STO, -3.5%), Myer Holdings (MYR, -4.39%) and Aveo Group (AOG, -4.2%). High Dividend Yield names were also hit this week, amongst the highest in the market that finished lower was Cromwell Property (CMW, -2.4%), Harvey Norman Holdings (HVN, -4.4%) and Retail Food Group (RFG, -9.7%), only making them more attractive on a pure yield basis.

The profitability measures also returned strong numbers this week. While ROE was the clear outperformer on the back of a sell-off in PBR, ROIC has managed to continue along for another week in the positive. The big difference this week, however, was in the quintile performance. While last week saw low ROIC names being sold off, this week saw a surge into High ROIC names, while the low ROIC basket remained flat to the market. High ROIC names doing well this week include the names that managed market outperformance last week despite a flat result for High ROIC names. Bellamy’s Australia (BAL, +8.9%), a2 Milk (A2M, +5.4%) and St. Barbara (SBM, +4.2%).

Who Moved

Some good volumes this week, with almost 10% of the benchmark moving on significantly higher than normal volumes. On the positive side Navitas (NVT, +6.1%), Regis Resources (RRL, +5.2%) and Sydney Airport (SYD, +3.1%) all finished the week positive despite a down market. On the other side, QBE Insurance (QBE, -10.2%), Vicinity Centres (VCX, -5.7%) and Tassal Group (TGR, -5.3%) all finished lower on the back of strong volume.

Summary

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What Worked Japan - 23 Jun 2017 - Quality worked and really nothing else stood out

What Worked

Low Debt to Equity and high ROIC names did the best this week. Low Debt to Equity names that did well were Murata Manufacturing (6981) up 11%, Zeon Corp (4205) up 10% and Alps Electrics (6770) up 9%. Low Debt to Equity names have only done this well once in the last 2 years. High ROIC names that did well were Yamaha (7951) up 6%, Hitachi Chemical (4217) up 7% and OBIC (4684) is up 7%.

On the other side, there was a slight selloff in low PBR names. Low PBR names have not really done well since the middle of April. Low PBR names that were hurt were Nomura Real Estate Holdings (3231) down 13%, Hokuriku Electric Power (9505) down 5% and Nippon Yusen Kabushiki Kaisha (9101) down 4%. All other factors were pretty much insignificant.

Who Moved

Only 13 named moved on volume this week. On the positive side, Murata Manufacturing (6981) is up 11%, Taiyo Yuden (6976) is up 7% and Aiful Corp (8515) is up 5%. On the other side, there was only one name down on volume this week, Tsumura (4540) down 1%.

Summary

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What Worked Asia - 16 Jun 2017 - Value worked in Singapore and South Korea

What Worked

Names with high dividend yield dominated in Singapore this week. Hutchinson Port Holdings is up 9% and Ascendas India Trust is up 7%. South Korea was all about Value, particularly low PE, this week. Low PE names that did well were SK Gas up 7% and SKC up 8%. High Beta names also did well in South Korea this week. In China, there was a selloff in short-term momentum and large-cap names. Large-cap names that were hurt were China Evergrande Group down 16% and Want Want China Holdings down 9%.

In Hong Kong, nothing really stood out this week. India was the same with only a slight selloff in large-cap names. In the Philippines, momentum was hurt this week. This is the first-week momentum has not done well since the end of March. Atok-Big Wedge is down 8% and Rizal Commercial Banking is down 8%. Value also did very well in Taiwan this week. Low PBR names that were up were Casetek Holdings up 8% and Tatung Co up 8%.

Who Moved

172 names moved on volume this week. The volume spikes look to be relatively spread evenly across sectors. However, at the country level, South Korea picked up a good number of volume spikes. On the positive side, SillaJen Inc is up 48%, Igarashi Motors India is up 21% and GMR Infrastructure is up 16%. On the other side, Esprit Holdings is down 25%, Global Brands Group is down 22% and Xiabuxiabu Catering Management is down 17%.

Summary

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What Worked Australia - 16 Jun 2017 - Profitability rules this week

What Worked

Profitability metrics stood out this week, in large part driven by underperformance of Australia’s least profitable names. This week saw the strongest week for ROIC in 9 months, and it has been steadily climbing over the last 3 weeks. One thing to be wary of though is that seems to be about the limit for this factor, with some serious negative performance potential in the next couple of weeks. Low ROIC names doing poorly this week included Iluka Resources (ILU, -3.3%), Ardent Leisure Group (AAD, -0.9%) and Santos Limited (STO, -2.6%). High ROIC names also did well, although as a group was largely in line with the benchmark. High ROIC names that really outperformed included Bellamy’s Australia (BAL, +15.2%), a2 Milk (A2M, +2.8%) and St. Barbara (SBM, +3.1%).

There was also a reasonably strong reversal in the short term momentum names. This Rank IC number, however, is not reflected in the top and bottom quintiles and is in large part being driven by names in the middle 60% of the market. Short term momentum has been working as a positive signal for the best part of the last month, and has finally hit its snapping point and has flipped back to being a contrarian signal – names down over the last month that bounced hard this week include Sigma Healthcare (SIG, +3.6%), Sirtex Medical (SRX, +5.8%) and Mayne Pharma (MYX, +5.5%).

Who Moved

13 names in the benchmark index moved this week on significantly higher than normal volumes. For the most part, these moves were positive. On the downside, Galaxy Resources (GXY, -23.6%), Medibank Private (MPL, -2.5%) and BHP Billiton (BHP, -2.3%) all finished the week lower. On the positive side of things, Acconex (ACX, +10.8%), Mineral Resources (MIN, +8.4%) and Ansell Limited (ANN, +7.6%) all finished the week higher.

Summary

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What Worked Japan - 16 Jun 2017 - Beta and Long-term momentum names were hurt this week

What Worked

Long-term momentum and high Beta names were hurt this week. Long-term momentum names have not done this poorly since the end of March this year. Disco (6146) is down 10%, Furukawa Electric is down 10% and Toyo Tire & Rubber (5105) is down 9%.  High Beta names also did not do well this week. Beta has only worked 1 out of the last 6 weeks. High Beta names that outperformed this week were Maeda (1824) is up 8%, Toshiba (6502) is up 7% and Daiwa House Industry (1925) is up 6%.

To a lesser degree, growth names did not do well this week. Sumco (3436) is down 9%, Nippon Paint Holdings (4612) is down 8% and Tokyo Electron (8035) is down 7%.

Who Moved

Only 10 names moved on volume this week. On the positive side, Tsumura (4540) is up 11%, ONO Pharma (4528) is up 9% and Aiful (8515) is up 3%. On the other side, Mabuchi Motors (6592) is down 8%, Nippon Paint Holdings (4612) is down 8% and Softbank Group (9984) is down 4%

Summary

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What Worked Australia - 02 Jun 2017 - Earnings Revisions strong, Low Sales Growth working

What Worked

Not a lot of colour in the market this week, with the only factors showing any real movement was EPS Revisions. 1 Month EPS revisions had their strongest week so far this year, almost doubling the closest week in terms of Rank IC. Names with good EPS revisions over the last month that finished up for the week included James Hardie (JHX, +2.8%), Fischer & Paykel Healthcare (FPH, +4.0%) and Aristocrat Leisure (ALL, +3.0%), while names with earnings downgrades over the last month finished down. Among these were Ardent Leisure (AAD, -2.8%), Vocus Group (VOC, -6.1%) and Nanosonics (NAN, -2.5%).

Forward Sales growth positive negative results for the week, but largely on the back of names with poor sales growth outperforming the index, rather than high growth names underperforming. Low forecast Sales Growth names that did well this week included Alumina Limited (AWC, +3.5%), IOOF Holdings (IFL, +1.2%) and Cromwell Property Group (CMW, +2.3%).

Who Moved

18 Names managed to move this week on volume, with a good spread across the sectors, and for the most part finishing up. On the positive side, Sigma Pharma (SIG, +10.2%), Flexigroup (FXL, +8.1%) and Fischer & Paykel Healthcare (FPH, +4.0%) rounded out the best performers on volume, while Domino’s Pizza (DMP, -7.1%), Galaxy Resources (GXY, -4.5%) and Wesfarmers Limited (WES, -1.6%) all finished the week down.

Summary

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