What Worked Australia - 21 Oct 2016 - Book rules as profitability sold

What Worked – PBR continued to produce solid numbers this week, but once again driven by a sell-off in the more expensive names by these measures in the market. That being said, the cheaper names on a PBR basis have produced excess returns consistently since June. Periods of value working like this have been historically followed by a large sell-off soon after. Expensive names on a PBR basis that were hurt this week included Amcor Limited (AMC, -4.9%), Dominos Pizza (DMP, -2.8%) and Iron Mountain Inc (INM, -4.0%) while some of the cheaper names saw positive returns like Origin Energy (ORG, +2.2%), Genworth Mortgage (GMA, +3.3%) and Santos Limited (STO, +3.0%).

Dividend Yield suffered this week also, with higher yielding names seeing a continued sell-off including Nine Entertainment Holdings (NEC, -4.8%), Seven West Media (SWM, -3.3%) and Cromwell Property Group (CMW, -2.7%). On the other side, lower yielding names bounced including Infigen Energy (IFN, +22.9%), NextDC (NXT, +9.6%) and Galaxy Resources (GXY, +4.5%) leading the charge.

Who Moved – 9 names from the 200 strong index managed to move this week on significantly higher than normal volumes. Finishing the week down included Crown Resorts (CWN, -17.0%), Start Entertainment (SGR, -9.4%) and Fisher & Paykel Healthcare (FPH, -4.2%), while Tatts Group (TTS, +14.6%), Credit Corp Group (CCP, +5.5%) and Tabcorp Holdings (TAH, +2.0%) all finished the week well above the index.


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