Renowned for engineering excellence, Rolls-Royce Holdings PLC (RYCEY) stands at the forefront of innovation, delivering advanced power and propulsion solutions across aviation, maritime, and land-based applications, while exclusively manufacturing iconic motor cars under the esteemed ownership of BMW AG since 2003. Currently ranked #10 in the SIA International ADR Report and holding a cutting-edge position in the SIACharts Hypothetical International 5 ADR Model, RYCEY has been a standout performer since its addition to the portfolio on March 13, 2023. This addition followed the sale of shares in Naspers Limited due to its declining position in the report. The investment strategy called for replacing the previous holding with the highest-ranked stock from the Relative Strength rankings with a SMAX score of 6 or higher, which was Rolls-Royce. Consequently, 1,423,937 shares were acquired at $1.72 each with proceeds from the sale. The attached candlestick chart with the Report History Overlay tool shows that RYCEY remains in the Favored Green Position. Despite this, 534,207 shares were sold at $5.62 on July 29 to address an imbalance, as the position had grown to represent 47.84% of the portfolio—similar to Nvidia's dominance in the SIA NASDAQ 100 Hypothetical Model. Currently, RYCEY constitutes 32.06% of the portfolio, reflecting a remarkable 277.91% gain since purchase, with recent trading around $6.50. The Bullish SMAX score of 10 out of 10 indicates strong short-term performance relative to other asset classes. In alignment with a beta of 1.30, which suggests higher risk compared to the broader market, RYCEY has delivered impressive YTD gains of 71.96% and a notable 14.84% increase over the past month, despite market volatility.
At SIACharts, account managers dedicate significant time to collaborating with advisors, ensuring effective use of powerful data to build portfolios that consistently outperform market averages. Relative strength rankings help investors identify stocks excelling relative to peers or index benchmarks, often signaling strong growth expectations for a company or sector. By implementing these insights through the SIA Model Portfolios, advisors can ensure investments are of the highest caliber. Many advisors find that the SIA Models tab showcases the best work available, and this view is fully supported. The investment strategy recommends the top five relative strength-ranked stocks from the SIA International ADR universe, focusing on selecting only one stock per sector to maintain diversification. When a holding is sold, it is replaced by the highest-ranked stock from the Relative Strength rankings with a SMAX score of 6 or higher. If the top-ranked stock is already represented in the current model, the selection moves down the rankings to find the next best alternative. Investments are sold if they fall into the Neutral zone with a SMAX score of 5 or less or the Unfavored zone. The SIA Hypothetical International 5-ADR Model boasts a cumulative gain of 1,703.95% since inception, with a 25.66% CAGR compared to a benchmark of 6.12%. This hypothetical model and any hypothetical transactions have been distributed since November of 2018 and any transactions or performance before this date is strictly backtested and hypothetical.
With an impressive alpha of 6.62 and a beta of 0.90—remarkable given the volatility in some ADRs—the model demonstrates outstanding performance. Notably, the 10-year performance stands at 24.54% versus the index’s 4.21%. These strategies deliver exceptional results and in the coming weeks, the focus will be on highlighting these models to emphasize the impact of concentration and relative strength on portfolio performance. Advisors can benefit from the best practices derived from the meticulous work of the SIA team. Some choose to complement these concentrated portfolios with other SIA 5-stock portfolios manually, while others opt for the SIA pooled products that automates this process with precision and efficiency. For more information on this service, please reach out to an SIA account representative.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
