This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
9 October 2015
Following our most recent marketing report (Top 10 Stocks for Q4) in the wake of the steep summer sell-off, and thanks to big rebounds by many big names we have had a slew of client requests about ‘which stocks are trading closet to all-time lows?’ Due to some companies being listed for decades and others for much less, looking at the last decade allowed nearly all companies to be considered. And filter shows 10 household names trading just 20-30% from 10yr lows. Interesting to note supermarkets make up a third of the most discounted equities. Worth a look? Or still basket cases?
However, given that this question was posed in the wake of the UK Index bounce and breakout, it is also worth looking at those that have already bounced most since the September market low. No surprise to see Glencore at the top, +70%. Thereafter 30% of the index is up 10-25% over the same period, with beneficiaries including the supermarkets, many of the Miners and certain financials. Will momentum continue to usher these names north? Or should we look at the 40% of the index that has yet to move more than 5% for a delayed response?
There’s no denying that the bigger the come the harder they can fall (BP in the Gulf of Mexico; Banks during financial crisis), but as with Glencore, this can also mean ‘the harder they rebound’. And to note that 40% of the UK Index remains 10% or more from the market’s April highs suggests there remains a healthy pool of candidates eligible for recovery trades should the UK Index bridge the 10% gap from its April all-time highs. Furthermore 60% of the UK Index is still positive for the 2015 and less than 10% have fallen since the market bottomed.
A host of exciting statistics suggesting a wealth of opportunities remain for those expecting the UK Index to grind back to a lucky number 7. As entertaining as it is to watch the markets, it’s far more exciting to be involved when there are profits to be found in a market rebound. Why wait for the UK Index to trade 7000 again? Carpe Diem.
Mike van Dulken, Head of Research
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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