In its most recent update, the top performing Saville Capital Emerging Companies Fund has cautioned against reading too much into the strong performance (+4.4 per cent) of the Small Industrials Accumulation Index in August 2018.
Two of the largest weightings within that index are tech stock high flyers Wisetech Global (ASX:WTC)and Afterpay Touch (ASX:APT).
The Wisetech share price soared 40 per cent in August, with the Afterpay share price jumping 28 per cent higher in the month. And those gains came after their share prices declined by 10 to 15 per cent from their intra-month highs in the last week of trading in the month.
Saville said incredibly, Wisetech shares trade on a FY19 price to earnings (P/E) ratio of around 100 times and has a market capitalisation of around $6.4 billion. Similarly incredible is the Afterpay valuation, its shares trading on a FY19 P/E of 150 times, with the company capitalised at around $4 billion.