Markets Stumble to the Finish Line
From a macro perspective, the only significant change from last month was the 25 basis-point interest rate increase by the FED. This move has long been telegraphed and certainly should not have caught anyone by surprise. Removing that from consideration as a cause, the market weakness seen in December may simply be more reflective of generally reduced expectations for corporate profits heading into 2016. Time will tell.
As the calendar turned, oil prices continued to slide while Chinese markets dropped precipitously. Both of these factors appear to be reflective of tepid expectations for economic growth. From an investment perspective, all is not lost though as opportunities continue to exist with respect to “things that go up” – particularly precious metals like gold. Our Singular coverage list counts several companies with exposure to precious metals – AMKR, SA, and LODE. With our wide mandate to find quality, underfollowed companies no matter the industry, we offer our clients continued opportunity to generate alpha.
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Recapping the table above, for December, the S&P 500 was down 1.64%, the Russell 2000 was down 3.70% and the aggregate Singular List was down 2.65%. For the trailing twelve months, the S&P was down 0.66%, the Russell 2000 was down 2.80%, and the Singular Research List was down 2.39%.
Digging into the companies on our coverage list, as our table below shows, the top performing company on the Singular List was Century Casinos (CNTY). While there was no news from the company during the month, we did see the company/stock discussed positively in several online forums, reinforcing our positive view on the company.
Our worst performers in December saw their monthly returns driven by various factors although weak petrochem-related prices were the primary cause for the weakness seen with our two worst performers. Both TREC and REX sell products which have high pricing correlation with oil prices. Given the commodity weakness, it was therefore not surprising to see these two decline.
At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage. There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge. We thank our clients for your support of independent equity research.