Strategy
Growth
Australia

ASX Value Strategy

5 Feb 2020
By
As one of our key ASX growth strategies, the ASX Value Strategy buys stocks within the ASX 200. These stocks have fundamentals that show a strong tendency for earnings stability, coupled together with growth potential.

Latest Update – 05 February 2020

This month, we will be making just one change to the portfolio. First we will be selling Netwealth Group Limited (NWL) and using the proceeds to buy Aristocrat Leisure (ALL). Of the sold stocks, NWL should realise an approximate loss of 9.30%.

As a reminder, this strategy rebalances on the 5th of each month (or the next business day if the 5th is a non-trading day). For specific details of closed trades, please see our closed trades page.

For historical trade updates please click here.

Stock codeStock nameRankQtyEntry dateEntry priceCurrent priceCurrent valueReturn percentage
ALL
Aristocrat Leisure Ltd
10
1405 Feb 20$36.63$37.04$5,185.601.12%
ALU
Altium Ltd
4
3295 Feb 18$15.21$42.49$13,979.21179.36%
BSL
BlueScope Steel Ltd
5
4145 Aug 19$12.07$13.93$5,767.0215.41%
BVS
Bravura Solutions Ltd
9
1,0165 Dec 19$4.92$5.45$5,537.2010.77%
HUB
HUB24 Ltd
2
3955 Sep 19$12.65$10.83$4,277.85(14.39%)
IEL
IDP Education Ltd
6
3035 Sep 19$16.48$22.16$6,714.4834.47%
PME
Pro Medicus Ltd
3
1355 Sep 19$37.17$23.51$3,173.85(36.75%)
REA
REA Group Ltd
7
675 Mar 18$75.08$112.89$7,563.6350.36%
TNE
Technology One Ltd
8
5926 Jan 20$8.44$8.69$5,144.482.96%
WTC
WiseTech Global Ltd
1
2495 Mar 19$20.10$29.15$7,258.3545.02%

*Quantities are based on investing $5,000 per stock on the entry date

ASX Value Strategy

We have defined a ‘value’ stock as one that has strong prospects of future share price growth based on a range of fundamental factors. The quality and efficiency of the company’s earnings are a significant part of this analysis. We evaluate several items from the income statement and balance sheet to calculate the Rivkin ‘value score’. On the 5th of each month (or next trading day), our model ranks ten stocks from the ASX 200, providing a list of medium to large-sized companies. This strategy differs from other forms of trading as the portfolio holdings are re-evaluated regularly, in this case, one month. Furthermore, trades are held without an initial stop loss.

How to follow the Strategy

Rivkin’s strategies are designed to be as easy as possible for investors to follow. To follow the ASX Value strategy, investors need to buy the stocks in the above table in equal weights. Weights can drift over time as stock prices move, but we only recommend re-balancing stock weights if they stray too far from the target weight (10% per stock). The stock volumes shown in this table are based on a $5,000 investment per stock which produces a $50,000 portfolio.

Once per month, the list of stocks will be updated in what we call a ‘re-balance’. This means investors will need to look at the new list and sell any stocks that are no longer on the list. After these stocks are sold, the new stocks from the current table can be bought.

About the Strategy

The ASX Value strategy was developed by Rivkin during 2017 and was rolled out as a strategy to clients in February 2018. Extensive back-testing was done to create and refine the strategy, and it is this back-testing that we rely on to give us increased confidence about future expectations. Please click here to find out more about the strategy.

View Comments

8
Comments

John Gordon

I have a strong suspicion, this report was compiled not on the 5th of February, but the day before, on the 4th. Aristocrat Leisure (ALL) hasn’t been under $36 on the 5th of February, as I write. Consequently, no member could have bought it at the $35.95 – it results showing an unrealistic profit. May I suggest to have this report finalized on the same day, as it is published?
John

Thomas Brunton

Hi John, Thanks for the message. As a result of a number of clients requesting the tables be adjusted the night before the rebalance date, updates occur after markets close the night prior to ensure clients have additional time to place their trades. This allows clients following the strategy to pick up the open price stated on the rebalance date. Once markets have closed on the rebalance date, which in the case of ASX Value is the 5th of each month, the table will then readjust to reflect an entry price that matches the open price recorded on that day.… Read more »

Ian Guy

Is it possible to have a print option down the left hand side with all the other quick options?
Ian

William O'Loughlin

Hi Ian,
We have just implemented this change. The print icon is now available in the left hand quick menu.
Regards,
William

Ian Guy

Great job, thanks.

Richard Cook

Up until recently, the Value, Momentum, Event Rebalance Emails were Clear, well laid out and
easy to follow.
Now, the articles are all spread out, much slower to get to and will not print properly.
So, at least on my computer, the rebalance articles are slower to bring up and to
read. Does this mean we have to now live with untidy screens compared to what they were?

Richard Cook

Steve Aldred

Why is BVS not in the stock table? We’ve held for over 3 weeks now.

William O'Loughlin

Hi Steve,
BVS currently doesn’t show in the table as we designed the new website such that ASX Value would always be a 10 stock portfolio. We are currently looking at how to build more flexibility into this so that we can show more stocks if required. In any case, it is likely that at the next rebalance we will be returning to a 10 stock portfolio.
Regards,
William

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