Monday, July 15, 2013

A new week brings us a new 10 Green Diamond fund and financial services veterans are sure to recognize the name of Louis Navellier.  This veteran of the industry has been employing quantitative methods of security selection for more than 30 years with long term performance that most managers would welcome.  He has teamed up with Revenue Shares, known for their revenue weighted versions of popular indices, for the RevenueShares Navellier Overall A-100 Fund (RWV).  The fund’s quarterly rebalancings lead to high turnover so we put it in the smart beta category.

A look at the constituents on its tear sheet suggests a mid cap growth fund but it crosses categories and the variety of flags show about a quarter of AUM crosses regions too.  The sector chart has Energy, Consumer Discretionary and Financials accounting for more than half of AUM and the Sub-Industry chart shows those weighted to downstream refining and marketing, cable and satellite, and insurance.  That Sub-Industry chart has plenty of slices to ease diversification worries but the top 10 do account for a heavy 49% of AUM with almost three quarters in the top 25 out of 100 constituents.  The new performance tab on the tearsheet shows RWV performs well but can be volatile, like 2011’s third quarter drop and the one last month.  That leads to a higher than average 5 Red Risk Diamonds but as long as the market is rising, this looks like a good way to ride it.

Those two drawdowns have brought the fund’s 3 year performance below the S&P 500 and our models suggest it could be a good time to buy this manager with impressive long term credentials.  RWV’s long term technical score is its best at a solid 69.5 but even the low short term is still good at 63.1.  An overnight jump in its short interest score, from 15.4 to 84.7, accounts for a rising sentiment score of 61.5 which made the difference from almost 9 Green Diamonds on Friday to 10 today.  Most responsible for its place today is a very strong 87.1 Fundamental Score where its 60.2 PE score is the only sub score not in the 90s.  It all combines for its best rank and Green Diamond Reward Rating yet so we hope RWV gets Louis Navellier back to his winning ways.  Thanks for checking in and good luck this week.

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