Winners and losers of the markets in 2015 - CNBC Africa

Winners and losers of the markets in 2015

Financial

by Chris Pretorius, Wealth Manager, AlphaWealth 0

Stock markets 2015. Photo: Wikemedia

Tuesday, 14 December 2015: Chris Pretorius, Wealth Manager at AlphaWealth reviewed the 2015 stock winners and losers locally and internationally.  

Winners

The big winners globally in the S&P500, FSTE100 and Euro Stoxx 50 (in local currency) were the technology companies, with Netflix being the best performing share. Netflix is replacing cable or DSTV television by offering customers series and movies on demand for much less money than traditional satellite TV. The other winners were Amazon, the online retailer and Activation Blizzard, the gaming company (Diablo, Starcraft and Warcraft). 

Local winner, Montauk, is a 100% US business that converts waste into gas. The company is highly illiquid and profitability is questionable given that it is heavily subsidised and there is a global over supply of gas. Fortress Income Fund is the runner up with a 117% return this year after a spectacular 100% in 2014. Going forward we would expect returns to be more in-line with the rest of the sector. PSG and Brait also had a phenomenal year and now look incredibly expensive. PSG for example is the third best performing share on the JSE, however its biggest holdings - Capitec, Zeder and PSG Konsult are not in the top 10. PSG is thus trading at a premium to NAV.  

Top 5 Best Performing Global Stocks

Sector

2015 YTD Return

NETFLIX INC

Consumer Discretionary

156.2015

AMAZON.COM INC

Consumer Discretionary

118.782

ACTIVISION BLIZZ

Information Technology

87.25627

TOTAL SYS SERVS

Information Technology

65.24324

AIRBUS GROUP SE

Industrials

64.01797

 

Top 5 Best JSE Stocks

Sector

2015 YTD Return

MONTAUK ENERGY H

Utilities

254.386

FORTRESS-INC

Financials

135.7144

PSG GROUP LTD

Financials

117.658

BRAIT SE

Financials

106.4752

CASHBUILD LTD

Consumer Discretionary

106.4671 

Losers 

The common theme is that commodity shares have been the biggest losers, with Lonmin and Aveng losing nearly all of their equity value. Globally the highly geared shale producers are the worst performers. There are two companies that stand out in the bottom performing tables both locally and abroad that are worth a mention.

Locally Allied Electrical was the fifth worst performing share losing 68% YTD. This is a classic example of a family run business where the second generation is just not up to the task. The legacy of Bill Venter has been destroyed due to incompetent management. Globally Fossil is an outlier as its business model is not related to the commodity cycle but to consumer spending. The terrible performance of their watch business is as a result of consumers leaning towards smart watches.

Top 5 Worst Performing Global Stocks

Sector

2015 YTD Return

CONSOL ENERGY

Energy

-78.1652

 

CHESAPEAKE ENERGY

Energy

-73.4502

 

GLENCORE PLC

Materials

-67.8725

 

SOUTHWESTERN ENERGY

Energy

-66.9476

 

FOSSIL GROUP INC

Consumer Discretionary

-66.5252

 

 

Top 5 Worst JSE Stocks

Sector

2015 YTD Return

LONMIN PLC

Materials

-92.6607

 

AVENG LTD

Industrials

-84.9425

 

ARCELORMITTAL SO

Materials

-84.2105

 

KUMBA IRON ORE L

Materials

-80.3068

 

ALLIED ELECTRICAL

Industrials

-68.0733

 

Hero to zero 

I also considered companies that had a very successful 2014 and a horrible 2015. Coronation is the highest profile loser of 2015 after an incredible run over the last couple of years, this is largely due to its market exposure and in particular its emerging market focus. Tongaat also followed a very successful 2014 with a horrible 2015, however the performance is driven by the sugar commodity price.  Globally, Micron leads this category as the SD manufacturer has lost market share in this highly competitive market.   

Hero to Zero Shares

Sector

2015 YTD Return

2014 Return

CORONATION

Financials

-42.1535

52.3023

MICRON TECH

Information Technology

-56.2411

60.96251

KEURIG GREEN MOU

Consumer Staples

-64.9987

76.91322

TONGAAT HULETT

Consumer Staples

-39.2813

56.0997

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