5 shares that crushed the S&P/ASX 200 in January

Credit: Peter Heath

Well, what a start to 2016!

The S&P/ASX 200 is down just under 6% since the start of the year, closing just above the psychological barrier of 5000 points on Friday.

China was the worst performing major sharemarket in January, losing more than 20 per cent of its value (generally considered a bear market). A sliding oil price and concerns about the timing of US rate hikes have contributed to the market’s volatility.

The best-performing company belonging to the S&P/ASX 200 this month was discount retailer JB Hi-Fi Limited (ASX: JBH) which rose by 21.37 per cent.

The worst-performing stock this month was WHITEHAVEN COAL LIMITED (ASX: WHC) which fell over 40%. While its shares rose strongly mid-month thanks to a jump in coal output, sales and confirmation that the coal miner is on track with guidance, the gains were short lived.

As usual, we had a number of standout shares for the month. If you’re a momentum style investor, who’s aiming to capitalise on the continuance of existing trends in the market, then here are five shares that crushed the ASX200 in January:

1. JB Hi-Fi Limited (ASX: JBH) – As mentioned, JB’s shares rose 21.37% in January, outperforming the ASX200 by 27.28%.


JB’s outperformance was due mainly to the high-profile fall from grace of Dick Smith Holdings Ltd (ASX: DSH). JB Hi-Fi’s product range is most strongly aligned with Dick Smith and broker Citi suggests the closure of about 100 Dick Smith stores could deliver JB Hi-Fi an earnings uplift of about $19 million in 2015-16.

2. Medibank Private Ltd (ASX: MPL) – Medibank’s shares rose 16.73% in January, outperforming the ASX200 by 22.64%.


Last month, Medibank’s unaudited financials suggested operating profit of $270 million for the six months to December 31. It now anticipates full-year operating profit to exceed $470 million, $100 million above its previous guidance.

Managing Director George Savvides said he was pleased that the success of Medibank’s strategic health cost leadership initiatives will enable the company to invest in providing more member benefits and value, and support member acquisition and retention.

3.Treasury Wine Estates Ltd (ASX: TWE) – Treasury’s shares rose 10.89% in January, outperforming the ASX200 by 16.80%.


In January, Treasury raised its profit guidance, announcing that based on preliminary, unaudited accounts, Earnings Before Interest, Tax and SGARA (EBITS) for the six months ended 31 December 2015 will be in the range of A$140 – A$150 million; above analyst consensus of circa A$120 million.

Treasury’s Chief Executive Officer, Michael Clarke commented: “I am delighted to report a strong first half result across all regions. Our Asia business performance is particularly pleasing as we benefited from increased shipments to the region ahead of Chinese New Year in February”.

4.M2 Group Ltd (ASX: MTU) – M2’s shares rose 9.49% in January, outperforming the ASX200 by 15.40%.


The reason for the rise in M2’s share price is M2’s shareholders have backed the $3 billion merger of the telco with rival Vocus Communications, a deal that will see the combined entity become Australia’s fourth-largest telco. The shareholder approval clears the way for the formation of an integrated telco with sufficient scale to compete with the likes of Telstra, Optus and TPG.

Melbourne-based M2, which operates Dodo, iPrimus and Commander brands, flagged its intentions to tie the knot with Vocus last September, with management of both telcos hailing the growth potential of the combined entity.

5.Virgin Australia Holdings Ltd (ASX: VAH) – Virgin’s shares rose 7.69% in January, outperforming the ASX200 by 13.17%.


The reason for the rise in Virgin’s share price is the reduction in the price of jet fuel. The Jet Fuel Monthly Price – Australian Dollar per Gallon has fallen from $2.18 in December 2014 to $1.49 in December 2015, that’s a drop of 31.58%. This translates into a lift in the operating profit margin for Virgin from 3.8% to 6.8%.

Virgin Australia also clearly outperformed the S&P/ASX 200 Industrials (INDEXASX: XNJ) last month by 11.57%*, while rival Qantas Airways Limited (ASX: QAN) underperformed the same index by 3.44%*.

(*Source: Commsec)

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Motley Fool contributor John Hopkins has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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