What Worked Australia - 10 Feb 2017 - Beta and Momentum still off

What Worked – This week saw the longer term momentum signals continue to peel off returns made over the 3-12 months, while names that lost over the last week bounced a little, the winners from last week also saw additional gains. While names up opver the last three months did see a slight uptick, the numbers this week were being driven in large part by a pickup in the names down over the last 3 months – with bottom of the market picking up +3.0% outperformance this week. Names down over the last 3 months that saw market beating returns this week included Bellamy’s Australia (BAL, +11.9%), Aconex (ACX, +6.8%) and Mayne Pharma (MYX, +9.8%). Names up over the last 3 months that sold-off this week included Galaxy Resources (GXY, -7.6%), QBE Insurance (QBE, -2.8%) and Downer EDI (DOW, -2.3%).

Earnings Revisions also saw very negative numbers this week – not driven by a sell-off in the higher revision names, but rather buying into the names with poor revisions, over both the 1 month and 3 month periods. Names showing terrible forecast earnings revisions over the last month that picked up this week included Transurban Group (TCL, +5.1%), Resolute Mining (RSG, +7.5%) and Saracen Mineral Holdings (SAR, +9.6%). High beta names also saw selling pressure this week, going against the positive direction of the market overall. High beta names such as Santos Limited (STO, -3.5%), Beach Energy (BPT, -4.0%) and BHP Billiton (BHP, -3.0%) all finished the week lower.

Who Moved – 12 names managed to move on substantially higher than normal volumes this week – back up in line with the long term norm. On the positive side, Seven Group Holdings (SVW, +16.4%), CIMIC Group (CIM, +10.7%) and Premier Investments (PMV, +8.5%)  all finished higher backed by strong volume, while Genworth Mortgage (GMA, -17.4%), Tabcorp Holdings (TAH, -7.7%) and James Hardie (JHX, -5.0%) all finished off weaker.

Please take a look and let me know if we can do anything else.


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