Our Stock Returns Beat the Street Significantly; We Rank 1st in 8 Stocks

9 January 2018, Asia Pacific – Time flies, Crucial Perspective is now 10 months old! We take this opportunity to review the performance of our stock ratings so far. In summary, our 17 stock ratings have yielded an absolute return of 27% (on a market cap-weighted basis) so far, significantly outperforming the Street. 

Based on Bloomberg’s tally, our absolute return was 12.2% which outperformed our peers’ stock returns by 8ppts in the past 3 months based on stock ratings.

We are ranked 1st in terms of absolute return among all analysts for 8 out of the 17 stocks that we have been covering for the past 3 months based on Bloomberg’s calculations. We are also ranked 2nd or 3rd position for 6 stocks we cover and 5th position for the remaining 3 stocks we cover. 

Note that as per our stringent company policy to ensure complete research independence, we do not have any stock positions in the companies under our coverage. Furthermore, we do not receive any compensation or benefits from the companies under our coverage.

 

BASED ON BLOOMBERG’S CALCULATIONS, WE ARE RANKED FIRST PLACE IN TERMS OF ABSOLUTE RETURN AMONG ALL ANALYSTS FOR 8 OUT OF THE 17 STOCKS THAT WE HAVE BEEN COVERING FOR THE PAST 3 MONTHS

Bloomberg tallies each analyst’s stock returns and ranking versus the returns of all the analysts (i.e. peers) covering the same stocks based on their recommendations. We have grabbed a screenshot here for your reference.  For Bloomberg Terminal users: Please type <Corrine Png> and select <Analyst Recommendations> on your Bloomberg terminal to see our stock ratings’ absolute returns performance in real time.

In the past 3 months, our stock returns rank us in the 1st position among all analysts for our Outperform ratings on 8 stocks – China Southern Airlines, China Eastern Airlines, Air China, Japan Airlines, ANA Holdings, Cathay Pacific, Singapore Airlines and SIA Engineering; 2nd position for 2 stocks – Orient Overseas International and Guangzhou Baiyun International Airport; 3rd position for 4 stocks – ST Engineering, China Airlines, EVA Airways and Shanghai International Airport; 5th position for 3 stocks – AirAsia, Pacific Basin Shipping and Beijing Capital International Airport. Please refer to the Bloomberg Absolute Return Rank (BARR) column in the chart below.

Our stock recommendations yielded an average return of 12.2% while the analyst community (i.e. peers)’s average return was 3.8% in the past 3 months. Our returns have therefore outperformed our peers’ returns significantly by 8ppts during this period.

Chart: Crucial Perspective’s stock returns and ranking versus the peer returns of all the analysts covering the same stocks based on their recommendations (Past 3 months as at 9th January 2018)

Chart: Crucial Perspective’s stock returns and ranking versus the peer returns of all the analysts covering the same stocks based on their recommendations (Past 3 months as at 9th January 2018)

Note: The above calculations by Bloomberg include the 17 stocks that have been under our coverage for at least 3 months.

Our stock ratings have also significantly outperformed the Street in the past 6 months. Our stock recommendations yielded an average return of 13.8% while the analyst community (i.e. peers)’s average return was 6.2% in the past 6 months. Our returns have therefore outperformed our peers’ returns significantly by 8ppts during this period.

Chart: Crucial Perspective’s stock returns and ranking versus the peer returns of all the analysts covering the same stocks based on their recommendations (Past 6 months as at 9th January 2018)

Chart: Crucial Perspective’s stock returns and ranking versus the peer returns of all the analysts covering the same stocks based on their recommendations (Past 6 months as at 9th January 2018)

Note: The above calculations by Bloomberg include the 13 stocks that have been under our coverage for at least 6 months.

 

 

OUR STOCK RATINGS HAVE YIELDED AN ABSOLUTE STOCK RETURN OF 27% SO FAR SINCE OUR RESEARCH COVERAGE INITIATION – OOIL (+73%), AIR CHINA (+61%) & CHINA SOUTHERN AIRLINES (+55%) ARE OUR BEST CALLS

Since our launch in March 2017, we have initiated research coverage on 17 companies so far.

In terms of absolute share price performance since our research coverage initiation, 11 out of our 17 stock ratings (i.e. two-thirds of our covered stocks) have yielded positive absolute returns. Our total return based on all our stock ratings is 27% so far on a market cap weighted basis.

Our Outperform rating of Orient Overseas International (OOIL) has been our best stock call so far – OOIL’s share price has risen 73% since we initiated research coverage on 14th March 2017.

This is followed by our Outperform rating of Air China, whose share price has risen 61% so far since we initiated coverage, followed by China Southern Airlines (+55%) and China Eastern Airlines (+35%).

In addition, we had mentioned that Air China is our top pick among the Chinese carriers when we initiated research coverage on 4th April 2017 and it has indeed outperformed China Southern Airlines and China Eastern Airlines since we initiated research coverage on these stocks.

Chart: Absolute returns performance of Crucial Perspective’s ratings since our research coverage initiations

Chart: Absolute returns performance of Crucial Perspective’s ratings since our research coverage initiations

OUR BEST TRANSPORTATION STOCK CALLS SO FAR

Here are our best transportation stock calls so far:

Initiated coverage on Orient Overseas International Limited with Outperform rating

OOIL (316:HK)’s share price has risen 73% since we initiated research coverage on 14th March 2017 and is our best call.

Orient Overseas (International) Ltd. Initiation Report – Still good value based on key fundamentals and potential takeover

 

Initiated coverage on Air China with Outperform rating 

Air China (753:HK)’s share price has risen 61% so far since we initiated coverage. We mentioned that Air China is our top pick among the Chinese carriers when we initiated research coverage on 4th April 2017 and it has indeed outperformed China Southern Airlines and China Eastern Airlines whose share prices have risen 55% and 35% respectively since we initiated coverage on these stocks on 10th April 2017.

Air China Initiation Research Report 2017: Top choice among the Chinese airlines

 

Initiated coverage on AirAsia with Outperform rating
AirAsia (AIRA:MK)’s share price has risen 25% since we initiated coverage on 31st May 2017.

AirAsia (AIRA:MK) Initiation Research Report 2017 – Cost Leadership, Extensive Network & Strong Branding

 

Initiated coverage on ANA Holdings and Japan Airlines with Outperform ratings
ANA Holdings (9202:JP) and Japan Airlines (9201:JP)’s share prices have risen 22% and 21% respectively since we initiated coverage on 3rd August 2017.

Research Report: Japan Airlines (9201:JP) offers more upside than ANA (9202:JP)

 

Initiated coverage on the Taiwanese airlines, stating that China Airlines has greater upside than EVA Airways

China Airlines (2610:TT)’s share price has risen 34% so far since we initiated coverage on the Taiwanese carriers. We mentioned that we see greater upside in China Airlines, which has historically been the less favoured stock between the two Taiwanese carriers, than EVA Airways (2618:TT) when we initiated research coverage on 15th August 2017 and it has indeed outperformed EVA Airways whose share price has only risen by 13%.

Research Report: EVA Airways (2618:TT) & China Airlines (2610:TT) valuations to remain rangebound until China-Taiwan relations thaw

 

Note: Stocks with upside of more than 10% based on our fair value are assigned an Outperform rating. Stocks with downside of more than 10% based on our fair value are assigned an Underperform rating. Stocks with upside or downside of less than 10% based on our fair value are assigned an In-line rating. These are Crucial Perspective’s proprietary rating classifications and by no means serve as investment recommendations.

Related Reports:

Here are the links to all our company initiation research reports for your reference:

Air China Initiation Research Report 2017: Top choice among the Chinese airlines

AirAsia (AIRA:MK) Initiation Research Report 2017 – Cost Leadership, Extensive Network & Strong Branding

Cathay Pacific Airways (293:HK) Initiation Research Report 2017 – Cathay Pacific outlook to stay gloomy?

Cathay Pacific (293:HK) upgraded to Outperform: Takeover by Air China (753:HK) likely

China Eastern Airlines Initiation Research Report 2017: Rapid improvement but aggressive expansion risk abounds

China Southern Airlines Initiation Research Report 2017 – Strong domestic drivers tempered by funding needs

Research Report: Chinese Airports (694:HK, 600009:CH) may see near-term price correction

Research Report: EVA Airways (2618:TT) & China Airlines (2610:TT) valuations to remain rangebound until China-Taiwan relations thaw 

Research Report: Japan Airlines (9201:JP) offers more upside than ANA (9202:JP)

Orient Overseas (International) Ltd. Initiation Report – Still good value based on key fundamentals and potential takeover

Research Report: Pacific Basin Shipping (2343:HK) highly leveraged to Handysize recovery

Singapore Airlines Initiation Research Report 2017: Will SIA be a “sexy” stock again?

SIA Engineering (SIE:SP) Initiation Research Report 2017: Well-positioned to leverage on potential MRO upturn

Singapore Technologies Engineering (STE:SP) Initiation Research Report 2017 – Strong orderbook as MRO, Infrastructure & Defense spending increases

 

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