What Worked Australia - 12 May 2017 - Disastrous week for Div Yield, Size hurt

What Worked

This week saw the worst week in our tracked history for Dividend Yield, after having spent the last month in positive territory. While the higher yielding names stayed largely in line with the market, it was low div yield names that jumped significantly, with the bottom quintile (i.e. 20%) of the market measured by Div. Yield provided +3.9% of outperformance. Australian Agricultural Company (AAC, +12.6%), Galaxy Resources (GXY, +17.1%) and Syrah Resources (SYR, +10.1%) all finished up in a big way this week, and all with forecast FY1 dividend yields of zero. The other side of that trade saw some of the higher yielding names underperform, including Genworth Mortgage Insurance (GMA, -1.3%), Harvey Norman Holdings (HVN, -8.5%) and Myer Holdings (MYR, -14.9%) all finishing well off the benchmark.

Size was also hurt this week, in large part caused by a rally in the smaller end of the market. The larger end of the market was all but flat to the benchmark (as one would expect from a cap-weighted index), while small cap names surged +2.4% higher than the ASX 200. The smallest names in the benchmark this week included iSentia (ISD, +0.3%), OFX Group (OFX, +0.3%) and Virtus Health (VRT, +0.7%), all-in-all only 8 names from the smallest 20% of the market posted losses this week. The larger end of town was a mixed bag however, and the losses seemed to be focused on the banks. Commonwealth Bank (CBA, -3.4%), Westpac (WBC, -3.9%) and ANZ (ANZ, -4.9%) all finished the week lower.

Who Moved

With most of the Asia Pac region having holidays in one form or another this week, Australia seemed to pick up a little of slack in trading volumes. 21 names from the benchmark index moved on significantly higher than normal volumes this week. On the positive side, Qantas Airways (QAN, +4.2%), ARB Corp (ARB, +3.9%) and CSR Limited (CSR, +3.7%) all finished the week higher backed by volume, while Mayne Pharma (MYX, -11.5%), Independence Group (IGO, -8.0%) and Alumina Limited (AWC, -7.3%) all finished lower.

Summary

PDF Report available here: Download


What Worked Japan - 12 May 2017 - Selloff in low PBR and high Beta names and into Quality

What Worked

There was a selloff in high Beta and Value, particularly low PBR, names this week. Low PBR names that went down this week were Isetan Mitsukoshi (3099) down 10%, Hitachi Zosen (7004) down 11% and Shinsei Bank (8303) down 8%. High Beta names that were also hurt were Subaru (7270) down 8%, Taiyo Nippon Sanso (4091) down 8% and Konica Minolta (4902) down 7%.

Quality names and to a lesser degree large-cap names benefited from the rotation away from Beta and Value. High ROE names that did well this week were COLOPL (3668) up 12%, Zenkoku Hosho (7164) up 11% and Start Today (3092) up 12%.

Who Moved

Strong volume week. 101 names moved on more than 1 standard deviation of volume. The volume spikes look to be spread relatively evenly across all sectors. On the positive side, Benesse Holdings (9783) is up 18%, Mitsubishi Tanabe Pharma (4508) is up 11% and IHI Corp (7013) is up 10% On the other side, Kakaku.com (2371) is down 8%, Meitec Corp is down 7% and Asahi Glass (5201) is down 6%. Isetan Mitsukoshi and Subaru mentioned above also moved on strong volume.

Summary

PDF Report available here: Download


What Worked Australia - 05 May 2017 - Short term momentum hurts value and growth alike

What Worked

Value, growth – did not matter this week as a swing into short term momentum hit both value and high growth names alike. While names like Bellamy’s (BAL, +12.3%), Flight Centre Travel (FLT, +9.7%) and BT Investment (BTT, +1.8%) are among the best performing names over the last month that added to gains once again this week. On the other side however, Vocus Group (VOC, -29.4%), Fortescue Metal (FMG, -6.4%) and Mayne Pharma Group (MYX, -11.5%) all underperformers for the month that closed the week lower.

While momentum ran, Value took a dive – cheap names on a forward PER basis such as Resolute Mining (RSG, -6.2%), Flexigroup (FXL, -12.4%) and Mineral Resources (MIN, -9.1%) all names that are trading at less than 10x forward earnings, and all were hit hard this week. On the other side of that trade saw NextDC (NXT, +3.8%), Sydney Airport (SYD, +3.5%) and APA Group (APA, +3.2%) all becoming more expensive. Looking over history, using forward PER as the sole basis for a strategy would have yielded almost the same return whether you bought the cheapest or the most expensive group over the last 2 years.

Who Moved

With most of the Asia Pac region having holidays in one form or another this week, Australia seemed to pick up a little of slack in trading volumes. 21 names from the benchmark index moved on significantly higher than normal volumes this week. On the positive side, Qantas Airways (QAN, +4.2%), ARB Corp (ARB, +3.9%) and CSR Limited (CSR, +3.7%) all finished the week higher backed by volume, while Mayne Pharma (MYX, -11.5%), Independence Group (IGO, -8.0%) and Alumina Limited (AWC, -7.3%) all finished lower.

Summary

PDF Report available here: Download


What Worked Australia - 28 Apr 2017 - Worst week for PBR in over a year

What Worked

Yet another poor week for value this week in the Aussie market, and a slight reversal in short term momentum, all leading to a swing into more profitable names. PBR had its worst week in over a year, with names cheaper on a PBR basis finishing up with a -22% IC, and a long/short spread of -1.8% vs. the benchmark being up over 1.0%. With the Australian Government’s announcement of an Energy Security policy, naturally the Energy space was hit pretty hard, and this is where a lot of cheap names on a PBR basis are sitting. Santos Limited (STO, -4.4%), OZ Minerals (OZL, -5.8%) and Whitehaven Coal (WHC, -2.1%) all off this week, and all the more less expensive on a PBR basis for it. Hard sell though with the potential uncertainty facing the energy market…

On a positive note, ROE names benefitted from the move away from value, and saw Amcor Limited (AMC, +2.3%), Platinum Asset Management (PTM, +2.9%) and Magellan Financial (MFG, +2.4%) all up and amongst the more profitable names in the index on a forward ROE basis. On the other side of that trade however Syrah Resources (SYR, -6.5%), Japara Healthcare (JHC, -2.4%) and Western Areas (WSA, -3.6%) all finished the week down.

Who Moved

Not a strong week for volumes, not even in the energy space. Only four names moved on volume this week, and only one of those managed to outperform the index. Sirtex Medical (SRX, -10.5%) and Coca-Cola Amatil (CCL, -2.7%) both finished lower on significantly higher than normal volumes, while Australian Pharmaceuticals Limited (API, +6.8) finished over the benchmark for the week.

Summary

PDF Report available here: Download


What Worked Japan - 28 Apr 2017 - Low PE and High Beta names continue to do well

What Worked

Only 44 names in TOPIX 500 were down this week. However, there was a clear rotation away from names up over the last month into underperforming names. Izumi (8273) is down 2%, Peptidream (4587) is down 0.4% and Kyowa Hakko Kirin (4151) is up just 1%. Low PE names continue to outperform. This is the third week in a row that low PE names have done well. Showa Denko (4004) is up 22%, Tokuyama Corp (4043) is up 14% and Alps Electric (6770) is up 11%.

High Beta names also have down well in the last 3 weeks after 2 months of underperformance. Daido Steel (5471) is up 20%, Ibiden (4062) is up 16% and IHI Corp (7013) is up 12%. Names with a high % of Institutional Investors also outperformed this week. DMG Mori (6141) is up 11% and Capcom (9697) is up 9%.

Who Moved

32 names moved on volume this week. On the positive side, Showa Denko (4004) is up 22%, Daido Steel (5471) is up 20% and OBIC (4684) is up 12% all on strong volume. On the other side, ITO EN (2593) is down 1.5%, LINE (3938) is down 1% and Park24 (4666) is down 1%.

Summary

PDF Report available here: Download


What Worked Asia - 21 Apr 2017 - Value was hurt in China/Hong Kong but Div Yield names did very well in Singapore

What Worked

Good sell off in low PBR names in China and a strong move into high ROIC names. High ROIC names that did well were AAC Technologies Holdings up 11% and Sunny Optical up 9%. In Hong Kong, there was the same selloff in Value names but there was not a rotation into Quality names. Low PBR names that did poorly this week were Hengdeli Holdings is down 18% and Mason Financial Holdings is down 3%.

In Singapore, high dividend yield names did very well this week. TalkMed Group is up 9% and Asian Pay Television Trust is up 8%. Value and high Beta names were hurt this week in South Korea. High PE names that were down were Interflex down 9% and Leeno Industrial down 4%. High Beta names did incredibly well in Malaysia this week. Malaysia Building Society is up 14% and AirAsia is up 6%.

Who Moved

Only 85 names moved on volume this week. A good portion came in South Korea. At the sector level, the spikes look to well distributed. On the positive side, DoubleUGames is up 39, Indiabulls Real Estate is up 35% and CUB Elecparts is up 27%. On the other side, Japfa Ltd is down 21%, Vivant Corp is down 9% and TMB Bank Public is down 9%.

Summary

PDF Report available here: Download

 


What Worked Australia - 21 Apr 2017 - Two shortened weeks, Value hurt in both

What Worked

At the end of two shortened weeks in the Aussie market, Value, and growth for that matter, have lost out two in a row. Cheap names on a forward PER basis have been sold off in droves over the last two weeks, while the more expensive end of the market has remained relatively flat to the benchmark. Metals and Mining names where made up a good portion of the value names sold off, among them Resolute Mining (RSG, -9.4%), Whitehaven Coal (WHC, -4.5%) and Saracen Mineral Holdings (SAR, -11.8%) where among the worst affected, and continue to look cheaper on a forward PER basis. These names are also among the biggest growth names in the market, but at the same time are seeing some of the biggest downgrades from the sell-side.

On a positive note, Dividend Yield is showing some promise. This week saw names with bottom of the market dividend yields dropping over -2% compared to the market by mid-Friday, although ended almost flat for the week. In the meantime, higher yielding names were flat up until the middle of today, and closed much higher as a group in the end. Names hurt in particular included Infigen Energy (IFN, -3.6%), Syrah Resources (SYR, -2.4%) and Oil Search Limited (OSH, -3.8%).

Who Moved

As might be expected, volumes are a little off given the much shorter weeks. Only one name managed to move on volume this week, namely TPG Telecom (TPM, -9.4%). On the other side, there were 30 names that made significant moves on very light volumes. GWA Group (GWA, +2.7%), SIMS Metal management (SGM, +2.5%) and Carsales (CAR, +2.1%) all ended up strong for the week on very weak volumes, while Woodside Petroleum (WPL, -3.2%), Sigma Pharmaceutical (SIP, -2.0%) and Westfield (WFD, -1.9%) all finished weaker on very poor volume.

Summary

PDF Report available here: Download


What Worked Japan - 21 Apr 2017 - Move into High Beta names and slight move away from Large cap

What Worked

With Earnings Season starting next week, there was not a lot that stood out. As with most pre-earning weeks, most of the factors were insignificant. However, there was a move into high Beta names and a slight move away from large-caps.

High Beta names that did well this week were Aiful Corp (8515) up 8%, NOK (7240) up 7% and DeNA (2432) up 7%. Large-cap names that were down this week were Idemitsu Kosan (5019) down 5%, Fujifilm (4901) down 4% and CyberAgent (4751) down 3%. 

Who Moved

Only 15 names moved on volume this week. On the positive side, Kyowa Hakko Kirin (4151) is up 13%, Aiful (8515) is up 8% and Toho (9602) is up 6%. On the other side, Maruha Nichiro (1333) is down 6%, AEON (8905) is down 3% and Japan Post Holdings (6178) is down 1%. 

Summary

PDF Report available here: Download


What Worked Asia - 07 Apr 2017 - Value worked in Singapore but was hurt in South Korea

What Worked

Nothing really stood out in China and there was just a slight move into low PBR names in Hong Kong. South China Holdings is up 11%. In Singapore, there was a move into Value names and names with positive EPS revisions. Value names that did well in Singapore were China Aviation Oil up 8% and Yanlord Land Group is up 6%. In South Korea there was selloff in Value and Large-cap names and a move into Growth. Growth names that outperformed were CJ CGV up 10% and Interflex up 9%.

In India, high ROE / ROIC names did not do well and there was a slight rotation into Beta. High ROE names that underperformed were SpiceJet down 7% and United Spirits down 7%. In the Philippines, large-cap names did well this week. Megaworld is up 17% and Metro pacific Investments is up 9%.

Who Moved

122 names moved on volume this week. On the positive side, BBMG Corp is up 42%, Indah Kiat Pulp & Paper is up 26% and Maoye International is up 23%. On the other side, AhnLab is down 11%, Ennoconn is down 9% and CT Environmental Group is down 9%.

Summary

PDF Report available here: Download

 


What Worked Japan - 07 Apr 2017 - Beta hurt hard again after being destroyed two weeks ago

What Worked

High Beta names took another huge hit this week, almost as bad as two weeks ago. However, this week Value was hurt more than it was two weeks ago. High Beta names that were hurt were Toshiba (6502) down 10%, Mitsui Mining and Smelting (5706) down 7% and Taiyo Yuden down 7%. Low PBR names that went down this week were Tokai Rika (6995) down 7%, Dai-Ichi Life (8750) down 7% and Resona Holdings (8308) down 6%.

On the other side, Growth names did well this week and have continued to do well since the beginning of February. However this is the best week for growth names since the rally started. Seven & I Holdings (3382) is up 6%, Shimamura (8227) is up 5% and Ezaki Gilco (2206) is up 6%.

Who Moved

80 names moved on volume this week. This is compared to an average 22 names moving on volume weekly in March.  Volume spikes look to be spread relatively evenly across sectors. On the positive side, Sohgo Securities Services (2331) is up 11%, Nitori Holdings (9843) is up 7% and Shimamura (8227) is up 5%. On the other side, Kewpie Corp (2809) is down 9%, Hitachi Metals (5486) is down 6% and NSK (6471) is down 6%.

Summary

PDF Report available here: Download