The list of companies below is chronological and the offer price used is the price in the article when the recommendation was made. For ease of referral, I have inserted hyperlinks back to the articles. I will also produce a list more regularly so that all readers are able to access my recommendations as easily as possible.
Having made hay for the majority of this five-year bull market, this year has proved a far more difficult investment climate for stock pickers and no more so in the small cap segment, an area of the market which has provided a rich hunting ground for me over the years. In fact, the FTSE Aim index is down 16 per cent since 5 March, the FTSE Aim 100 index is down 21 per cent and the FTSE Small Cap index is down 5.5 per cent.
It's worth noting that UK large caps have significantly outperformed small caps in the same period, partly because their valuations were far more attractive but also because the vast majority of small cap shares had already re-rated following the hefty gains in 2012 and 2013. That’s not to say there haven’t been bargains to be found amongst the under researched minnows of the UK stock market, it’s just that it has taken more work to uncover them.
The other point worth noting is that investors have become far more cautious in the past six months. So not only has risk aversion increased, but investors have been more inclined to crystallise profits. In this climate small caps are most exposed. This is one reason why last year’s bumper profits on a number of the holdings I advised buying into have been eroded. The deratings this year of shares in online gaming companies Netplay TV (NPT) and 32Red (TTR) are a case in point as is that of seismic equipment operator Thalassa (THAL).
It’s also clear to me that investors are trading shares more in this climate, rather than adopting a ‘buy and hold’ approach. As a result many of the share recommendations I have made have run up to produce decent paper profits, only to pull back on profit taking as shareholders bank the short-term gains. Consequently, there is now greater volatility in the shares I recommend than in prior years, a point I would make all readers aware of.
Another key take is that companies announcing bad news are getting heavily punished in the current market environment, and far more so than in previous years. I expect this trend to continue. However, it’s also true that there will be an increasing number of investment opportunities on offer once the ongoing market correction continues. From my lens at least, this market is setting itself up for an autumn rally.
There are positives too, the most obvious of which is the relative strength of the large caps despite the unstable geopolitical back drop in the Middle East and Russia. Ordinarily, I would have expected general market volatility to have picked up far more – as measured by the market’s fear gauge, the Vix index – given the stream of negative news on this front. The fact that UK mega and large caps have not sold off heavily is an indication to me that market participants are far more relaxed about the situation than the headline makers would have us believe.
I also feel that investors are now coming to terms with the fact that the time is rapidly approaching when interest rates on both sides of the Atlantic are ‘normalised’. The first move in UK base rate could be as early as the first quarter next year, while the US Federal Reserve’s money printing programmes will come to an end in October. I expect that rising interest rates, albeit modestly so for both the UK and US, is likely to be seen as a positive by equity investors, reflecting the economic strength to support corporate profits.
So although I am not complacent, I am also sanguine about the market correction. Moreover, having correctly called the end of the 2003 to 2007 bull market spot on (‘The party’s over’, 25 June 2007), I feel we are not yet at the point where another major market top is in place having taken into consideration the back drop for corporate earnings, current equity market valuations, interest rate expectations and relative yields on alternative investments.
In the circumstances, I will try and continue to seek out investment opportunities in the small cap segment with potential to deliver long-term gains for the loyal followers of my columns, while keeping abreast of the wider market back drop.
Please note that I will be publishing an update on my 2014 Bargain share portfolio tomorrow following announcements from a number of the constituent companies.
Simon Thompson's share recommendations since 5 March 2014
■ Simon Thompson’s recommendations ('Simon Thompson’s share recommendations', 5 March 2014)
■ Macau Property Opportunities: Buy at 239.5p, target price 275p to 290p (‘Land of opportunity’, 5 March 2014)
■ Heritage Oil: Buy at 266p, target price 300p (‘Hitting pay dirt’, 6 March 2014)
■ Aurora Russia: Buy at 20.5p, target range 27p to 30p (‘Undervalued Russia value play’, 10 March 2014)
■ Barratt Developments: Run profits at 445p (‘Going through the roof’, 10 March 2014)
■ Taylor Wimpey: Buy at 120p, target price 160p (‘Going through the roof’, 10 March 2014)
■ Bovis Homes: Run profits at 917p (‘Going through the roof’, 10 March 2014)
■ 32Red: Buy at 68p, fair value target 100p (‘Worth a punt’, 10 March 2014)
■ Netplay TV: Buy at 17.75p, fair value target 28p (‘Worth a punt’, 10 March 2014)
■ Raven Russia: Buy at 75p, medium term target 90p (‘From Russia with value’, 11 March 2014)
■ Global Energy Development: Buy at 86p, target 140p (‘A smart farm-out deal’, 11 March 2014)
■ Pure Wafer: Buy at 90p, target 105p (‘Tech share heading to new highs’, 12 March 2014)
■ Amino Technologies: Buy at 97p, target 120p (‘A high income tech play’, 13 March 2014)
■ Trifast: Buy at 79p, target 100p (‘Time to make a bolt-on purchase’, 18 March 2014)
■ Heritage Oil: Buy at 239p, target 300p (‘Conundrums to solve, 20 March 2014)
■ Cairn Energy: Sell at 164p (‘Conundrums to solve, 20 March 2014)
■ Polo Resources: Speculative buy at 16.25p (‘Conundrums to solve, 20 March 2014)
■ PV Crystalox Solar: Buy at 25.75p, target 35p (‘Shining bright’, 24 March 2014)
■ Thalassa: Buy at 270p, target 350p (‘Shining bright’, 24 March 2014)
■ Trading Emissions: Sell at 14.5p (‘Time to sell’, 24 March 2014)
■ B.P. Marsh & Partners: Buy at 142p (‘Ready to march on’, 25 March 2014)
■ KBC Advanced Technologies: Buy at 119p, target 165p (‘A slick performance’, 26 March 2014)
■ GLI Finance: Buy at 59.5p, target 80p (‘A peerless performance’, 27 March 2014)
■ Moss Bros: Buy at 105p, target 120p to 130p (‘From recovery to growth’, 31 March 2014)
■ Camkids: Buy at 60p (‘Kamikaze investors target Camkids’, 7 April 2014)
■ Bezant Resources: Buy at 7p, target 20p (‘Bezant bottoming out’, 8 April 2014)
■ Global Energy Development: Buy at 68.5p, target price 140p (‘Spudding share price gains’, 8 April 2014)
■ Sea Energy: Buy at 35.5p, target 60p (‘Primed for profitability’, 9 April 2014)
■ 1PM: Buy at 65p, target 80p (‘Funded for earnings growth’, 10 April 2014)
■ Fairpoint: Buy at 146p, target 190p (‘Funded for growth’, 10 April 2014)
■ Sutton Harbour: Buy at 30p, initial target 36p (‘Set sail for gains’, 10 April 2014)
■ 600 Group: Buy at 19p, target 30p (‘Tooled up for a strong recovery’, 14 April 2014)
■ Air Partner: Hold at 500p, target 620-640p (‘Taking a watching brief’, 15 April 2014)
■ LMS Capital: Buy at 79p, target 88p (‘Happy Capital Returns’, 15 April 2014)
■ Trifast: Buy at 89p, target 100p (‘Bolting ahead’, 16 April 2014)
■ Communisis: Buy at 68p, target 85p (‘Communicating well’, 16 April 2014)
■ Nationwide Accident Repair Services: Buy at 84p, target 105p (‘Buying into recovery’, 17 April 2014)
■ IQE: Buy at 23.25p, target 35p (‘Time to chip in again’, 17 April 2014)
■ Netcall: Buy at 58p, target 70p (‘Betting on an earnings beat’, 22 April 2014)
■ Accumuli: Buy at 23p, target 30p (‘Profit for cyber warfare’, 23 April 2014)
■ 32Red: Buy at 47.5p, target 100p (‘Game on’, 23 April 2014)
■ NetplayTV: Buy at 17p, target 28p (‘Game on’, 23 April 2014)
■ Sanderson: Buy at 73p, target range 80p to 85p (‘Tapping into mobile growth on’, 24 April 2014)
■ London & Associated Properties: Buy at 47p, target range 60p to 65p (‘Property for the shopping list’, 28 April 2014)
■ Molins: Buy at 153p, target 220p (‘An unloved engineer’, 28 April 2014)
■ Aurora Russia: Buy at 20.5p, target 28p (‘Exploiting a Russian value play’, 28 April 2014)
■ Record: Buy at 34.5p (‘Currency watch for record gains’, 29 April 2014)
■ Heritage Oil: Hold at 312p (‘Game changing news’, 30 April 2014)
■ H&T: Buy at 160p, fair value 243p (‘Navigating a recovery’, 30 April 2014)
■ Pure Wafer: Buy at 72p, target price 105p (‘Tech that and rally’, 30 April 2014)
■ Pittards: Buy at 158p, target price 250p (‘Hell for leather’, 1 May 2015)
■ Urban & Civic: Buy at 260p (‘A transformational deal’, 1 May 2014)
■ Tristel: Buy at 60p (‘Clean up on superbugs’, 6 May 2014)
■ Camkids: Buy at 68p (‘Vexing those little grey cells’, 7 May 2014)
■ Eros: Take profits at $16.20 (‘Taking profits on a Bollywood film noir’, 7 May 2014)
■ Trifast: Buy at 100p, target price 125p ('Fasten on for a profitable ride', 7 May 2014)
■ Raven Russia: Buy at 68.5p, target 90p (‘A tender offer from the Russian bear’, 8 May 2014)
■ Thalassa: Buy at 250p, target 350p (‘Waiting for seismic gains’, 8 May 2014)
■ Naibu: Buy at 70p (‘Look East for profit’, 9 May 2014)
■ Hangar 8: Buy at 225p, target 300p (‘Ready for take-off’, 12 May 2014)
■ LMS Capital: Buy at 86.75p, target 95p (‘Capitalising on capital returns’, 13 May 2014)
■ Global Energy Development: Buy at 70p, target 140p (‘Farmed out for profits’, 13 May 2014)
■ Bloomsbury Publishing: Buy at 148p, target 210p (‘Bloomsbury tales’, 13 May 2014)
■ Charlemagne Capital: Buy at 18.25p (‘Yield to emerging markets’, 13 May 2014)
■ Oakley Capital Investments: Buy at 165p (‘A shrewd investment’, 14 May 2014)
■ Aurora Russia: Hold at 24.5p (‘Time to tender Aurora shares’, 14 May 2014)
■ Manx Telecom: Buy at 164p, target 210p (‘High yield telecoms play’, 15 May 2014)
■ PV Crystalox Solar: Buy at 19p (‘Cash rich PV to shine in second half’, 19 May 2014)
■ Macau Property Opportunities: Buy at 243p, target 290p (‘Far Eastern promise’, 19 May 2014)
■ Cenkos Securities: Buy at 159p, target 190p (‘Broking for more success’, 20 May 2014)
■ Barratt Developments: Buy at 345p ('Building gains for the future’, 21 May 2014)
■ Bovis Homes: Buy at 750p ('Building gains for the future’, 21 May 2014)
■ Taylor Wimpey: Buy at 108p ('Building gains for the future’, 21 May 2014)
■ Inland: Buy at 45p ('Building gains for the future’, 21 May 2014)
■ GLI Finance: Buy at 60.5p, target 80p (‘A peerless investment’, 22 May 2014)
■ KBC Advanced Technologies: Buy at 123p, target 165p (‘A slick fundraise’, 23 May 2014)
■ 600 Group: Buy at 21.5p, target 30p (‘Buying into a strong recovery’, 27 May 2014)
■ Moss Bros: Buy at 122p, target 130p (‘Dressed for more success’, 28 May 2014)
■ Safestyle: Buy at 195p, target 230p (‘Clear cut buy’, 28 May 2014)
■ Town Centre Securities: Buy at 247p, target 290p (‘Playing the regional property game’, 29 May 2014)
■ Flowtech Fluidpower: Buy at 118p, target price 170p (‘Powered up for a fluid performance, 2 June 2014)
■ Inland: Buy at 46.5p, target 60p (‘Homing in on a break-out’, 3 June 2014)
■ Netplay TV: Buy at 16.75p, target 28p (‘Punting on a recovery’, 3 June 2014)
■ B.P. Marsh & Partners: Buy at 152p, target 170p (‘B.P. Marsh cashed up for acquisitions’, 4 June 2014)
■ First Property: Buy at 30.5p, target 35p (‘A shrewd value and income play’, 5 June 2014)
■ 1PM: Buy at 73p, target 80p (‘Award winning growth’, 5 June 2014)
■ Camkids: Buy at 68p (‘Tasty Chinese Takeaways’, 6 June 2014)
■ Naibu: Buy at 72p (‘Tasty Chinese Takeaways’, 6 June 2014)
■ Dragon-Ukranian Development Properties: Buy at 34p, target 57p (‘Dragon shows signs of life’, 9 June 2014)
■ Sanderson: Buy at 72p, target 85p (‘Clients wins boost Sanderson’, 10 June 2014)
■ Tristel: Buy at 77p, target 90p (‘Bug busting upgrades’, 10 June 2014)
■ Amino Technologies: Buy at 97p, target 120p (‘Amino has ammunition’, 11 June 2014)
■ Pittards: Buy at 130p, target 200p (‘Pittards pummelled’, 11 June 2014)
■ SeaEnergy: Buy at 37.5p, target 60p (‘A profitable passage’, 12 June 2014)
■ Conygar: Buy at 176p, target 200p (‘Property play with hidden value’, 16 June 2014)
■ Polo Resources: Hold at 11p (‘Undervalued and unloved’, 17 June 2014)
■ Mountview Estates: Take profits at 8,675p (‘Banking profits’, 17 June 2014)
■ Trifast: Hold at 130p (‘Bolting ahead’, 18 June 2014)
■ Communisis: Buy at 58.5p, target 85p (‘Communicating robust earnings growth’, 19 June 2014)
■ Greenko: Buy at 162p, target 225p to 230p (‘Powering up’, 20 June 2014)
■ Thalassa: Buy at 195p, target 350p (‘Awaiting a spark for a re-rating’, 23 June 2014)
■ Accumuli: Buy at 27p, target 30p to 33p (‘Fighting cyber crime’ 1 July 2014)
■ 600 Group: Buy at 21.75p, target 30p (‘Engineering a recovery’, 1 July 2014)
■ Hangar 8: Buy at 275p, target 300p (‘Profit from earnings uplift’, 2 July 2014)
■ Arbuthnot Banking: Buy at 1,190p, target 1,500p (‘Bank on a valuation anomaly’ 3 July 2014)
■ Secrets of successful stock picking (7 July 2014)
■ Cenkos Securities: Buy at 233p, target price range 270p to 295p (‘Going for broke’, 8 July 2014)
■ Stanley Gibbons: Buy at 323p, target price 400p (‘A stamp of approval’, 8 July 2014)
■ Barratt Developments: Buy at 372p (‘Bargain shares updates’, 9 July 2014)
■ Taylor Wimpey: Buy at 113.6p (‘Bargain shares updates’, 9 July 2014)
■ Camkids: Buy at 56p (‘Bargain shares updates’, 9 July 2014)
■ Record: Buy at 35p (‘Bargain shares updates’, 9 July 2014)
■ H&T: Buy at 179p (‘Bargain shares updates’, 9 July 2014)
■ Sutton Harbour: Buy at 33p (‘Set fair for gains’, 10 July 2014)
■ Conygar: Buy at 167p (‘Set fair for gains’, 10 July 2014)
■ Daejan Holdings: Buy at 4,845p, target 5,800p (‘Hot property’, 10 July 2014)
■ Maximising equity returns (‘Maximising returns’, 14 July 2014)
■ Bloomsbury Publishing: Buy at 172p, target 210p (‘Worth a read’, 15 July 2014)
■ API: Buy at 72p, target 90p (‘Packaged for gains’, 15 July 2014)
■ Netplay TV: Buy at 15.25p, target 28p (‘A punt worth taking’, 15 July 2014)
■ KBC Advanced Technologies: Buy at 125p, target 165p (‘A slick performance’, 16 July 2014)
■ Safestyle: Buy at 180p, target 230p (‘A clear cut buy’, 17 July 2014)
■ Manx Telecom: Buy at 172p, target 210p (‘Dial into a high yield play’, 17 July 2014)
■ WH Ireland: Buy at 109p, target 180p (‘Broking for bumper profits’, 21 July 2014)
■ Nationwide Accident Repairs Services: Buy at 69p, target 105p (‘Exploiting value opportunity’, 21 July 2014)
■ Netcall: Buy at 62p, target 70p (‘Buy the break-out’, 22 July 2014)
■ Macau Property Opportunities: Buy at 258p, target 290p (‘Exploiting a share buy-back programme’, 23 July 2014)
■ IQE: Buy at 20.25p (‘Sell-off unjustified’, 23 July 2014)
■ 32Red: Buy at 53p, target 89p (‘Punting on share price recovery’, 24 July 2014)
■ Jarvis Securities: Buy at 520p, target range 580p to 600p (‘Cash rich income play’, 28 July 2014)
■ Air Partner: Sell at 356p (‘Warning from Air Partner’, 28 July 2014)
■ Epwin: Buy at 103p, target 140p (‘Moulded for gains’, 29 July 2014)
■ Stadium: Buy at 75p, target 105p (‘Switch onto the Stadium of light for gains’, 30 July 2014)
■ Global Energy Development: Hold at 56p (‘Global Energy sell-off’, 31 July 2014)
■ Pure Wafer: Buy at 74p, target 105p (‘Primed for a re-rating, 31 July 2014)
■ Tristel: Buy at 77p, target 105p (‘Clean up with Tristel’, 4 August 2014)
■ Inland: Buy at 45.5p, target 60p (‘Home in on a small cap profit surge’, 4 August 2014)
■ 600 Group: Buy at 20.5p, target 30p (‘A smart strategic buy’, 5 August 2014)
■ Accumuli: Buy at 26.5p, target 30p to 33p (‘Contract wins boost Accumuli’, 5 August 2014)
■ Greenko: Buy at 180p, target 225p to 225p (‘Bond investors warm to Greenko’, 5 August 2014)
■ LMS Capital: Buy 86p, target 95p (‘Reaping bumper cash returns’, 7 August 2014)
■Simon Thompson's new book Stock Picking for Profit can be purchased online at www.ypdbooks.com, or by telephoning YPDBooks on 01904 431 213 and is being sold through no other source. It is priced at £14.99, plus £2.75 postage and packaging. Simon has published an article outlining the content: 'Secrets to successful stock-picking'
