What Worked – For the first time this year Value signals have produced an IC of greater than 25%, a big number in terms of weekly results. This was not however the market buying cheap names, but rather a large sell-off in the more expensive names. Value itself has been working as an overall signal for the last few weeks, but while the cheaper names have continued upwards rather steadily, the more expensive names have been hurt. Since the beginning of August, more expensive names on an FY1 PER basis have underperformed the market by almost -2.5%, and off -3.8% from the mid-August peak. Names that are expensive on a forward PER basis that did poorly this week included Aconex (ACX, -4.6%), Nextdx Limited (-7.6%) and Technology One Limited (TNE, -5.4%). Technology Services as a sector saw no names posting a positive result this week.
Growth was negatively impacted this week also, although a more even distribution – the low growth names did well, while the high growth names were sold off. Syrah Resources (SYR, +5.4%), Goodman Group (GMG, +1.1%) and Westfield Corp (WFD, +1.6%) amongst the low growth names that outperformed the index this week, while Galaxy Resources (GXY, -9.0%), Orocobre Limited (ORE, -3.3%) and Bellamy’s Australia (BAL, -4.6%) where all sold off while being amongst the highest growth names in the index.
Who Moved – Not a big week for volume this week, with 7 names from the 200 moving on higher than normal volumes. Those that underperformed this week included OFX Group (OFX, -10.7%), Bank of Queensland (BOQ, -0.8%) and Tabcorp Holdings (TAH, -0.8%), while BT Investment Management (BTT, +10.6%), Sigma Pharma (SIP, +1.0%) and Telstra (TLS, +1.0%) all finished the week higher.
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