July was a tale in two parts. It was a slow month with limited opportunities for new long term trades presenting themselves. That being said our existing trades continued to grow in leaps and bounds, led by the powerful earnings engine that is AAOI.
Our single new trade for July was ENVA, which reported during the quarter and promptly dropped. We see no reasonable explanation for the sell off and continue to believe in the fundamentals. In fact, the company re-iterated its earnings forecast for the full year of $1.04 - $1.43.
AAOI jumped a whopping 57% during the month, on the back of pre-releasing it’s above guidance earnings. The company is in a sweet spot at the moment, but it’s approaching fair value as its earnings can only continue such strong growth for so long.
UCTT also jumped 25%, while our two Chinese social media plays had strong months as well. YY was up 23%, well and truly breaking out of it’s weekly downtrend and looks to be on track to realising its value. At the same time, MOMO was up 18%, although it has a lot more upside already built into it’s price.
Our year-to-date performance has returned to it’s higher levels. 78% of trades are profitable with an average return of 34% for the first 7 months of the year.
Head of Investments