What Worked Australia - 04 Mar 2016 - A good week to be a value investor in Australia

What Worked – While Div Yield did quite poorly this week, other value metrics produced some outstanding results. While the quintile spread came through with lack-luster numbers, PER came through for the fourth week in a row. Driven largely by a strong pickup in the cheaper names, the more expensive end of the market was also up,. Value, for the first time in almost two years, is net positive for the last 3 months. PBR was however the standout this week, generating a 40% IC, and is proving to be a stronger value indicator than PER at the moment in the Australian market. Origin Energy (ORG, +20%), Glenworth Mortgage (GMA, +8.7%) and Santos Limited (STO, +21.4%) all low PBR names that produced strong returns for the week.

On the other side of the coin, 12 Month momentum produced some disastrous results for the week. While the 12 month winners were off slightly, it was a pickup in the laggards that generated these numbers for the week, and largely in energy related names. Independence Group (IGO, +23.5%), BHP Billiton (BHP, +13.8%) and Worleyparsons (WOR, +54.4%) all generating strong returns after a very poor run over the last year

Who Moved – Volume continues to be strong, with 35 names trading on substantially higher than normal volumes for the week. The winners circle saw Mesoblast (MSB, +43.4%), Sims Metal (SGM, +23.0%) and UGL Limited (UGL, +15.2%) all up on strong volume, while Slater & Gordon(SGH, -55.4%) led the losers down on the back of some poor news around a pending deadline from their creditors. 


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