Hanseatic Championship - Round 2/SG
- HanseaticHunter
- Jun 17, 2021
- 2 min read
Updated: Jun 18, 2021
Quest for top equity investments
When we kicked off the competition on April 30, 2021, we detailed what it takes to be a winner. The core selection model is our “Fusion Investing” approach, which combines the fundamental evaluation aspects with the sentiment analysis of the stock. While Round 1 covered the former. Round 2 is all about the latter.
Sentiment analyses have become common place with the rise of behavioral finance over the last 30 years. There are many well known approaches for the market as a whole such as the “Fear & Greed Index” of CNN. However, on a stock level, sentiment analysis is still far less comprehensive. It is often sub-summarized in only one factor and usually summarized under the term “momentum”. At the core of our stock-level sentiment analysis are:
Stock price momentum
Analysts’ earnings revisions
Analysts’ recommendations
Shareholder activity (insiders, core holders, big funds, shortseller)
Earnings surprise momentum
While these are visible indicators, the key is the correct interpretation. This is where “fusion” comes in and literally means fusion, i.e. combining fundamental und sentiment indicators. For example, highly valued stocks usually react asymmetrically to earnings surprises with disappointments more heavily penalized than positive surprises are rewarded. While academics have made “behavioral finance” an established research field and machine learning algorithms cope with multiple layers, fusion analysis is still as much an art as it is a science.
We attempt to make this art form as scientific (or as disciplined) as possible by including proven input factors such as momentum (of both price & earnings). For the last of the five indicators above, earnings surprise momentum, we have built our proprietary “HH Earnings Tracker”, a detailed database of earnings events in our investment universe.
We open Round 2 with the biggest category, “Solid Growth” (see category definition here). 64 stocks were winners in this category in Round 1. After performing the above analysis, exactly half of these drop out. Conversely, 32 show an attractive combination of accelerating fundamentals and improving sentiment. These are the winners of “Round 2 – Solid Growth” and will proceed to the K.O. phase:
1 Accell ACCEL
2 Dometic DOM
3 HelloFresh HFG
4 Knaus Tabbert KTA
5 Leifheit LEI
6 Pierer Mobility (KTM) PMAG
7 Storytel STORYB
8 Zalando ZAL
9 Acomo ACOMO
10 Greenyard GREEN
11 Mowi MHG
12 Basler BSL
13 SMA Solar Technology S92
14 Stemmer Imaging S9I
15 va-Q-tec VQT
16 Wolftank-Adisa WAH
17 BayWa BYW6
18 Deutsche Post DPW
19 DSV DSV
20 ALK-Abello ALKB
21 Arjo ARJO
22 Novo Nordisk NOVOB
23 Shop Apotheke Europe SAE
24 Sonova SOON
25 Adesso ADN1
26 ASML ASML
27 EQS Group EQS
28 GK Software GKS
29 Infineon IFX
30 Init IXX
31 Lagercrantz LAGRB
32 Nexus NXU
The HanseaticHunter
Comments