What Worked Australia - 28 Apr 2017 - Worst week for PBR in over a year

What Worked

Yet another poor week for value this week in the Aussie market, and a slight reversal in short term momentum, all leading to a swing into more profitable names. PBR had its worst week in over a year, with names cheaper on a PBR basis finishing up with a -22% IC, and a long/short spread of -1.8% vs. the benchmark being up over 1.0%. With the Australian Government’s announcement of an Energy Security policy, naturally the Energy space was hit pretty hard, and this is where a lot of cheap names on a PBR basis are sitting. Santos Limited (STO, -4.4%), OZ Minerals (OZL, -5.8%) and Whitehaven Coal (WHC, -2.1%) all off this week, and all the more less expensive on a PBR basis for it. Hard sell though with the potential uncertainty facing the energy market…

On a positive note, ROE names benefitted from the move away from value, and saw Amcor Limited (AMC, +2.3%), Platinum Asset Management (PTM, +2.9%) and Magellan Financial (MFG, +2.4%) all up and amongst the more profitable names in the index on a forward ROE basis. On the other side of that trade however Syrah Resources (SYR, -6.5%), Japara Healthcare (JHC, -2.4%) and Western Areas (WSA, -3.6%) all finished the week down.

Who Moved

Not a strong week for volumes, not even in the energy space. Only four names moved on volume this week, and only one of those managed to outperform the index. Sirtex Medical (SRX, -10.5%) and Coca-Cola Amatil (CCL, -2.7%) both finished lower on significantly higher than normal volumes, while Australian Pharmaceuticals Limited (API, +6.8) finished over the benchmark for the week.


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