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The post-earnings announcement drift (PEAD) effect in September

28th September 2017
The post-earnings announcement drift (PEAD) effect in September
Julia Lee
Equities Analyst
Bell Direct

In her September review, Julia discusses:

  • Does the post-earnings announcement drift (PEAD) effect hold true? (1:00)
  • Seven Holdings Group, St Barbara Mines and Monadelphous February-September return performance (2:07)
  • Focus on Mineral Resources, Abacus Property and a2 Milk 30-day share performance (3:05)
  • Looking ahead: downturn in the healthcare space and pullback in metals (4:10)

 

2017 has been characterised by a sideways movement and with September closing down, there might be some more weaknesses ahead for the Australian share market.

Does the post-earnings announcement drift (PEAD) effect on the market hold true? (Companies which outperformed on the day of their earnings announcement - on their fundamentals and share price - tend to outperform the market in the following weeks and even months after their results). Best performers Mineral Resources, Abacus Property and a2 Milk recent 30-day share performance tends to confirm the trend.

It’s interesting to note that the worst performers in September were also in the bottom list in August.

Julia also shares her stock & sector tips:

  • Healthcare stocks should be avoided for the time being
  • There are opportunities in metals with global growth at its highest level in six years
  • Defensive stocks are expected to underperform in the type of market we are in
  • Whilst the US is looking overvalued, the Eurozone is starting to fire up