Sunday, 4 August 2013

Smallcaps forge ahead

Yet again, I am pleased to report that stock markets have made further progress through the month of July, led by smallcaps yet again. 

UK Smallcaps breaking new highs

Japanese stocks have also recovered to a surprising extent, with a promising uptrend looking to be re-established once again.

Nikkei index rebounds off the 100-day moving average

On the sector front, the Insurance and Retail sectors have shown the most resilience in recent weeks, surging to new 52-week highs and leading the way within European stock markets. This to some extent reflects the improving economic fundamentals in Europe, reflected in the surprising recent fall in the European unemployment rate and corporate reports of better European business activity.

European manufacturing activity is picking up

European Insurance sector maintains a strong uptrend

And Retail stocks are also threatening to set new highs too

Current Insurance stock favourites which offer a tempting combination of value (e.g. high dividend yield, low price/book value) include Delta Lloyd (DL), Aviva (AV) and AXA (CS). In Retail, I continue to favour UK mid- and small-caps such as Sports Direct (SPD), Darty (DRTY) and Inchcape (INCH).

Overall, while I remain cautious given the strong stock market advance since November of last year, there are several pockets of positive momentum that can still be exploited, in particular in the mid- and small-cap space. 

Best of luck, 

No comments:

Post a Comment