Brokers still playing picks game
A2 Milk, F&P Healthcare, Chorus and Pushpay have fired up performances
We’re halfway through what’s turned out a roller coaster of a year for equity markets. Sharemarkets around the world plunged by 30 to 40 per cent in late March as the severity of the pandemic became clear.
Yet, somehow despite border closures and lockdowns pushing New Zealand and much of the world into recession, the local NZX-50 is tracking just 1 per cent off where it was when we started the annual Brokers’ Picks game on December 18.
“Actually there’s been more carnage on the market than what the headline index might suggest,” says Mark Lister, Head of Private Wealth Research at Craigs Investment Partners.
Only four NZX0-50 companies — a2 Milk, F&P Healthcare, Chorus and
Pushpay — had year, he said.
“The a2 and F&P Healthcare effect has been phenomenal.”
Those two, accounting for 30 per cent of the index total weighting, and both performing very strongly, had dragged the index up significantly.
In fact just eight out of the 50 index stocks were in the black this year, Lister said.
“I count 20 companies down more than 20 per cent. If I just look at the NZX-50 Year to date and do the average share price change, it’s minus 15 per cent.”
With most of the players in the Brokers Picks game having picked a2 Milk, success was this year really coming down to avoiding any of the stocks that had really fallen off a cliff, Lister said.
Overall
the
really
fired
players
this
haven’t performed too badly, with no one facing double-digit losses.
Leading the pack at this stage is broker Hamilton Hindin Greene which had the good foresight to pick both market stars — F&P Healthcare and a2 Milk.
That puts them 4.8 per cent up, well off the pace of last year’s winner
MSL Markets with bull returns of 55.6 per cent.
In fact even last year’s worst performer returned more than 13 per cent.
In second place at this stage is Forsyth Barr — up 2.7 per cent — by virtue of including both a2 and Chorus.
Also still in the black
Markets — at 1.4 per cent.
The other players have all been dragged down due to picking at least one stock that has been hit hard by Covid-19.
For example Jarden, currently off 6.7 per cent — had returns dragged down by retailer Kathmandu, which is off nearly 50 per cent.
“We’ve seen quite a divergence in returns with cyclicals underperforming,” said Jarden head of research Arie Dekker.
“In particular companies with retail; tourism and housing market exposure. Underperformance has been elevated in companies with too much debt.”
For the record NZ retail investor
market
is MSL web forum Sharetrader has been tracking the Herald Broker Picks game and is currently up 12 per cent — by virtue of a2 as well as outperforming minnows Plexure and Bliss Technologies.
Disclaimer — It’s a game
Readers should recognise that the results of the Brokers Picks are skewed by some features of the game. The figures exclude brokers’ fees. Brokers are asked to choose the securities that will give the best shortterm performance. If they had been asked to choose, for example, a fiveyear term, the results might be different. The survey does not allow brokers to review choices during the year. The survey implies a one-sizefits-all approach. It takes no account of individual circumstances such as an investor’s appetite for risk, need for income or tax circumstances. The views expressed do not constitute personalised financial advice and are not directed at any person. Finally, past performance is no guarantee of future performance.