Markit review
17 July 2014 London
Image: Shutterstock
The most expensive companies have consistently underperformed in US markets over the last two years, according to a report by Markit, by a cumulative 15.58 percent—3.06 percent of which came since the end of Q1 2014.
Factor performance in Q2 has been excellent, though Markit noted a reversal of signal in June.
The performance is only relative however, as US markets have marched higher unabated for the past two years despite shares in the most expensive group on average increasing by 1.2 percent each month.
While energy firms continue to make popular shorts, names in the pharmaceutical and biotechnology sector have become the most shorted, as these firms see both the largest number of constituents in the most expensive 10 percent of shares.
The market is led by Organovo, which again ranks as the most expensive stock within the sector. With plans to develop a human tissue 3D printer, Markit found that short sellers continue to bet this will not become a reality.
Other highlights of the report include Herbalife, which continues to make a popular short as its on-going saga with Bill Ackman remains in the headlines.
Factor performance in Q2 has been excellent, though Markit noted a reversal of signal in June.
The performance is only relative however, as US markets have marched higher unabated for the past two years despite shares in the most expensive group on average increasing by 1.2 percent each month.
While energy firms continue to make popular shorts, names in the pharmaceutical and biotechnology sector have become the most shorted, as these firms see both the largest number of constituents in the most expensive 10 percent of shares.
The market is led by Organovo, which again ranks as the most expensive stock within the sector. With plans to develop a human tissue 3D printer, Markit found that short sellers continue to bet this will not become a reality.
Other highlights of the report include Herbalife, which continues to make a popular short as its on-going saga with Bill Ackman remains in the headlines.
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