What Worked Australia - 17 Jun 2016 - Profitability and Long term Momentum take the stage

What Worked – In what is almost a mirror image of last week’s performance, Profitability/Quality metrics really came into play this week. ROIC in particular saw a rather large sell-off in the low ROIC space, and an a more subdued uptick in the high ROIC names. Beach Energy (BPT, -13.3%), Nine Entertainment (NEC, -5.7%) and Santos (STO, -9.7%) all hurt very badly this week on negative ROIC numbers, while Ozforex (OFX, +0.0%), JB Hi-Fi (JBH, +1.7%) and REA Group (REA, +0.3%) all managed a positive return for the week (just).

Long term (12 month) momentum continued its index beating run, while the 1 year losers took another beating. Origin Energy (ORG, -9.4%), Spotless Group (SPO, -3.6%) and Sims Metal Management (SGM, -6.9%) all amongst the biggest under-performers for the year, and all furthered their loss this week. On the other hand, Regis Resources (RRL, +1.2%), Norther Star Resources (NST, +2.8%) and Metcash Limited (MTS, +1.4%) all returned positive results this week, furthering their gains for the year in opposition to the rest of the market.

Who Moved – Not a lot around in terms of volume this week, with only 7 names managing to post higher than normal volumes. On the underperforming side, Mesoblast (MSB, -44.8%), MMA Offshore (MRM, -25.0%) and Atlas Iron (AGO, -13.6%) all down significantly and back by very strong volumes, and nothing managed to return a positive result back by volume this week.

Summary

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