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 – 06 April 2020
With it being the 6th of the month, we need to complete a review to determine if the Value Portfolio requires a rebalance. Following the completion of the review, we need to replace two stocks in the portfolio. The stocks to sell are Aristocrat Leisure (ALL) and Computershare (CPU), and these need to be replaced with IPH Ltd (IPH) and Caltex Australia (CTX).
Based on recent closing prices, the approximate loss from the stocks sold is around Aristocrat Leisure (-43.6%) and Computershare (-32.3%).
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 code||Stock name||Rank||Qty||Entry date||Entry price||Current price||Current value||Return percentage|
|229||5 Mar 20||$21.80||$21.82||$4,996.78||0.09%|
Caltex Australia Ltd
|217||6 Apr 20||$23.00||$23.99||$5,205.83||4.30%|
Clinuvel Pharmaceuticals Ltd
|280||5 Mar 20||$17.81||$20.74||$5,807.20||16.45%|
|395||5 Sep 19||$12.65||$8.88||$3,507.60||(29.80%)|
|701||6 Apr 20||$7.13||$7.20||$5,047.20||0.98%|
Netwealth Group Ltd
|701||5 Mar 20||$7.13||$7.32||$5,131.32||2.66%|
|249||5 Mar 20||$20.02||$17.44||$4,342.56||(12.89%)|
Pro Medicus Ltd
|135||5 Sep 19||$37.17||$22.68||$3,061.80||(38.98%)|
REA Group Ltd
|67||5 Mar 18||$75.08||$84.11||$5,635.37||12.03%|
Technology One Ltd
|592||6 Jan 20||$8.44||$8.11||$4,801.12||(3.91%)|
*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.
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