Morning Brief – 11-May-2018

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Morning Brief Images 11-May-2018

UK Stock Market News Today – 11-May-2018

With no news for stocks in my universe this morning, just though I would throw this out for comment – A little something different for the weekend.

Note: This is something I intend to trade on a small Spread Bet account going forward, to keep a “real world” eye on progress.

This is the start of my venture into £500m – £1bn Mkt Cap (liquid enough to Spread Bet, small enough to potentially double) shares using a Technical screen as my starting point. Usually, I don’t invest in a share with a Mkt Cap greater than £500m.

Screen

Basics are Price is above the 50 SMA, which is above the 130 SMA, which is above the 200 SMA. The 52 week high is at least 50% higher than the 52 week low and current price is within 25% of the 52 week high. One temporary rule: Price is below 500p (to allow me to place “play” Spread Bets for now).

Here’s the screen if you’re interested.

Current offerings and thoughts.

AO. – Revenue is going up (but nothing dramatic) but it’s never made a profit and not even forecast to do so until at least 2019 – Pass on this for now.

CMCX – Most recent actuals (Revenue, PBT and EPS) are down and the nearest forecasts are not exactly inspiring – On the plus side Op Mgn and ROCE are very good and stable plus there’s a decent yield – They may be enough to drive the price higher but would prefer to see better Revenue, PBT and EPS, both actual and forecast – Pass on this for now.

FPM – Not yet making a profit but a big improvement in the most recent actuals and forecast to grow well in 2018 and 2019 (although it’s strange that 2018 EPS is so low) – KICKER – With Net Cash looks like a profitable Oil & Gas company that will require no more funding – Entry at the most recent high – 145p?

HUR – Most recent actuals and nearest forecasts are not good at all, looks like a waiting game until 2019 at least – Pass on this for now.

LTG – The only thing not to like is that forecast drop in Revenue in 2019, but that’s perhaps a data error or not much to worry about – KICKER – In the process of creating a market leader in the fast-growing digital learning industry, making good acquisitions – Entry at the most recent high – 112p?

PMO – It may be acceptable when investing in this industry but with Net Debt 3x greater than the Market Cap and with no profit this year – Pass on this for now.

Summary

I usually do not invest in the Oil & Gas sector but the screen currently has 3 out of 6 in that sector (are these to be the leaders perhaps?). My main pause for thought has been, should I ignore them or include them. I know very little about the industry at all and the usual fundamental approach does not really make much sense. For example, only FPM (and not HUR or PMO) looks worthy of investment. Wondering, should I still apply some simple fundamentals to filter out the “bad”. Or, as they are greater than £500m in Mkt Cap just go for it based purely on the technicals (on the basis these shares are not being moved by idiots on BBs so hopefully the institutions have faith in the fundamentals).

All comments most welcome.

PS – Some notes on Entry, Stop, Target – Basically, 10% Initial Stop, Breakeven when up 10% and then trail by 20%, take half profits at 50% and continue with 20% trailing. Will eventually do some pyramiding in but for now will keep these basics.

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