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ASX 200 May Review, Market Movers and Sector Performance

ASX 200 May Review, Market Movers and Sector Performance
Select Harvests gained a staggering 42% during May and narrowed its year-to-date loss to only 12%.
Jun 03, 2016 By Wise-owl Tags: ASX, ASX200, Analysis, Market Movers, Sector Review, ASX Review

May marked the third consecutive month of gains on the ASX with the benchmark index S&P/ASX 200 rising 2.4%. Despite a share market rout during the first two months of the year, the ASX is now in positive territory for the year after rising for three consecutive months. However, Australia’s bourse is still well below the level seen 12 months ago. 

74% of all companies on the ASX200 gained during the month of May (148 of the top 200 companies) which is slightly weaker than the 77.5% recorded in April, but arguable a strong performance overall and above the 2016 average. On a year-to-date timeframe 67.5% of all companies in Australia’s leading benchmark index are currently in the black.

We have recently assessed the year-to-date performance of all sectors on the ASX 200 and noticed that Materials (+14.3%), Health Care (+10.7%) and Industrials (+9.20%) have outperformed the broader market while Staples (-1.8%) and Financials (-3.3%) lag behind. You can read the full sector analysis here.

Please note: All closing prices are as of 31/05/2016. No guarantee is made for the accuracy of this data. Dividend payments are not included in the total returns.

 

ASX May Performance

 

Index

May

YTD

ASX200

+2.4%

+1.6%

All Ordinaries

+2.5%

+1.9%

Small Ordinaries

+4.0%

+6.9%

 

The ASX 200, Australia’s benchmark index of the 200 largest companies, gained 2.4% in May and is now 1.6% higher compared to its closing price on 31 December 2015. Small and mid-caps continue to outperform pushing the ‘Small Ordinaries Index’ 4% higher for the month and 6.9% in profit for the year. The S&P/ASX Small Ordinaries Index (XSO) is comprised of companies included in the S&P/ASX 300 index, but not in the S&P/ASX 100 index. This index provides a benchmark for small-cap investments.

 

Best ASX200 Performers May

The table below contains the ten best performing stocks on the ASX200 during the month of May as well as their performance year-to-date. This table does not include any dividend payments and solely focuses on capital growth.

 

Ticker

Company

April

YTD

Industry

SHV

Select Harvests

+42.1%

-12.2%

Consumer Staples

CYB

CYBG Plc

+35.1%

+38.5%

Financials

PRG

Programmed Maintenance

+28.7%

-22.2%

Industrials

ALL

Aristocrat Leisure

+28.6%

+25.0%

Consumer Discretionary

MMS

McMillan Shakespeare

+22%

+14.4%

Industrials

AAC

Australian Agriculture

+22%

+29.1%

Consumer Staples

MQG

Macquarie Group

+21.9%

-7.2%

Financials

CCP

Credit Corp Group

+21.5%

+20.2%

Industrials

FPH

Fisher & Paykel

+18.2%

+17%

Health Care

MTS

Metcash Ltd

+16.5%

+26%

Consumer Staples

 

While last month’s best performing stocks were dominated by resource and energy companies, the composition of well performing stocks in May appears to be more diversified. Our top 10 market movers belong to the industry groups Industrials (3), Consumer Staples (3), Financials (2) as well as Health Care and Discretionary.

Select Harvests gained a staggering 42% during May and narrowed its year-to-date loss to only 12%. However, it is worth noting that the 12-month loss is close to 30%.

The best performing financial stock is CYBG plc, National Australia Bank's UK subsidiary Clydesdale Bank, which was separately listed in February as part of a demerger. While CYB dragged down NAB’s returns, which ultimately led to the spin-off, it appears that the company as a single entity was able to deliver cost cuttings and improved margins.

Programmed Maintenance Services (ASX:PRG), McMillan Shakespeare (ASX:MMS) as well as Credit Corp Group (ASX:CCP) belong to the ASX200 Industrials sector. Programmed Maintenance, which provides staffing, maintenance and facility management services recently announced a profit of $38.8million (before non-trading items). However, the actual result showed a $98million loss following a goodwill non-cash impairment charge of its marine division. Revenue rose 54% compared to pcp, mainly due to acquisition of Skilled Group. Overall cost savings of more than $30million were already delivered due to the acquisition.

Australia’s largest investment bank Macquarie Group (ASX:MQG) appreciated 20% during the month, but the value of Macquarie’s stock is still more than 10% lower compared to the beginning of the year.

 

Top 3 Best ASX200 Performers Year-to-Date

 

Ticker

Company

YTD

Industry

MIN

Mineral Resources

+106.6%

Industrials

SBM

St. Barbara

+83.1%

Materials

SAR

Saracen Mineral Hldg

+83%

Materials

 

Mineral Resources (ASX:MIN) continues to be the star performer on the ASX 200 year-to-date as the company is trading at the highest valuation since 2014. Even though MIN is still well below its 2012 peak, investors who bought before the beginning of the year logged in a return of nearly 107% since January 1.

St. Barbara Limited (ASX:SBM) has gained 83% and remains the strongest gold mining company on the ASX200. The company was included to the top 200 index on 18 March 2016. Credit rating agency Moody’s also upgraded St. Barbara’s credit rating due to an improvement in the company’s financial profile. Wise-owl is attracted to its Simberi operation and low cost Gwalie mine.

At the end of the month Saracen Mineral’s year-to-date gain totalled 83% which propels the stock into our top three performers. At the end of the March quarter the company announced that it expects to double production rate to 300,000 oz per annum over the long-term whilst maintaining a strong balance sheet. As at 31 March Saracen had $34.3m in cash and no debt. The FY16 guidance was upgraded 175-195,000 oz.

 

Worst ASX200 Performers in May

The table below contains the ten worst performing stocks on the ASX200 in April as well as their YTD performance. This table does not account for dividend payments.

 

Ticker

Company

March

YTD

Industry

FLT

Flight Centre

-19.6%

-20.3%

Consumer Discretionary

WSA

Western Areas

-18.4%

-9.6%

Materials

SGM

Sims Metal Mngmt

-13.8%

+13.3%

Materials

FXL

Flexigroup Ltd

-13.8%

-30.2%

Financials

SKT

SKY Network

-13.6%

+1.3%

Consumer Discretionary

ALQ

ALS Ltd

-13.5%

+6.6%

Industrials

RIO

Rio Tinto

-13.3%

+2.8%

Materials

ASB

Austal Ltd

-12.8%

-8.1%

Industrials

FMG

Fortescue Metals

-12.6%

+60.2%

Materials

SPO

Spotless Group

-10.4%

+9.7%

Industrials

Four of the 10 worst performing companies of May belong to the materials/resources sector.

Investors continue to reduce exposure from Western Areas (ASX:WSA) as nickel prices remain stubbornly low. In Wise-owl’s latest commodity market update on May 16, we noted that Nickel prices have depreciated nearly 40% in the past 12 months.

Fortescue Metals (ASX:FMG) and Rio Tinto (ASX:RIO) fell along with the price in iron ore with eased in May. A stronger US Dollar weighed on almost all commodities, but iron ore was hit especially hard following speculative buying during the first four months of the year. China’s iron ore and steel futures contracted nearly 30% during the month of May. Data from Metal Bulletin Ltd showed that ore prices rose 23% in April, posting the third straight monthly gain, but collapsed 30% since peaking on April 21 at U$70. Sims Metal Management (ASX:SGM), which is focused on metal and electronic recycling, is felling macroeconomic headwinds too as slowing Chinee steel demand and low market prices places downwards pressure on Sims earnings.

The worst performing ASX 200 stock in May was Flight Centre Limited (ASX:FLT) as investors assess if the current ‘challenging trading conditions’ are temporary or potentially long-term headwinds for the business.  

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Wise-owl Author: Wise-owl Jun 03, 2016

www.wise-owl.com

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