What Worked Australia - 15 Jul 2016 - Great week to be a value investor

What Worked – In what has been a good week for the index, momentum in all its flavours was punished this week as value swung back into fashion. Momentum, while largely driven by a pickup in the laggards, did also see a slight sell off in the better performing names. Qantas (QAN, +10.0%), Flight Centre (FLT, +4.9%) and Henderson Group (HGG, +10.7%) all producing very strong results this week while still being amongst the biggest losers over the previous 3 months.

In terms of value, Flexigroup (FXL, +15.2%), Seven West media (SWM, +7.1%) and Nine Entertainment (NEC, +8.6%) all posted very strong results this week and are amongst the cheapest names on the index on a trailing PER basis. Sales Growth on the back of this underperformed the index, with names like Vocus Communications (VOC, +3.6%), Mirvac Group (MGR, +3.4%) and Evolution Mining (EVN, -1.2%) all falling short of the benchmark this week.

Who Moved – This week saw only 21 names in the entire index produce negative results, but in the end volumes are sitting around average. Only 5 names from the index managed to move on significantly higher than normal volumes, and all of them produced very strong positive returns over the index. Amongst the top, Sandfire Resources (SFR, +25.0%), Whitehaven Coal (WHC, +23.2%) and Western Areas Limited (WSA, +16.7%) up sharply over the week and backed by very strong volumes.


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