What Worked Australia - 25 Mar 2016 - Value comes off hard, move into Profitable Growth names

What Worked – Values run has finally come to an end, and in a big way. While PBR has been one of the strongest performing signal over the last 2 months, if came off particularly hard this week, generating an IC just shy of -40%. These kind of numbers are usually restricted to the more volatile signals like Beta and 1 week/month reversal signals. Low PBR names erasing gains this week included Origin Energy (ORD, -5.8%), Seven Group Holdings (SVW, -7.8%) and Fortescue Metals (FMG, -6.5%). PBR was largely a one-sided affair however, with the gains on the high PBR names not as spectacular of the losses from the low PBR names.

Sales Growth and ROE fared better this week, with high growth, high ROE names like Cochlear (COH, +2.1%), Aristocrat (ALL, +3.8%) and TPG Telecom (TPM, +9.3%) finishing the short week well up over the index.

Who Moved – For a short week there was some good volume around. 27 Names from the index posted higher than normal volumes for the week. Of those finishing up on volume for the week, Ardent Leisure (AAD, +15.7%), Premier Investment (PMV, +15.2%) and Paladin Energy (PDN, +13.6%) all finished up very strongly, while Evolution Mining (EVN, -12.8%), Independence Group (IGO, -12.1%) and Karoon Gas (KAR, -11.8%) rounded out the losers for the week.

Summary

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