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Yes, we're in a bear market. But there will always be stocks that do well in a lousy market - and we're looking hard to find them for you. We recently set up a market screen to try and find shares with genuine share price momentum, or clear price upside. Here are some of the results.
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We looked for main market and Aim-quoted companies, with a market value of at least £50m, whose shares have risen (or fallen) by at least 15 per cent in the past month. Obviously, share prices move all the time, so that list will look different today compared with this time last week. But some interesting stories emerge.
Takeovers are an obvious theme. Take Sinclair Pharma. This small pharma company revealed it was in bid talks in mid-August, closing at 65p on the day of that news. Since then, they've settled back to 55p or so, well below their 12 month high of 85p and light years away from their record high of 157p in early February 2004.
Yet analysts have opined that a take-out price of over 100p a share will be needed to secure a deal. The shares are tightly held; chief executive Michael Flynn holds 19.5 per cent and founder Andrew Sinclair a further 7.7 per cent, and both have put significant sums of money into the company. Sinclair Pharma has a good track record of acquiring products and getting through the approval process, and it's not a forced seller - its cash reserves are more than sufficient to fund its business. Although there have been some fire-sale prices in the small-cap pharma sector, the takeover of Acambis by Sanofi-Aventis at a big premium proves that bidders will stay pay up if the products and strategy are right.
Commodities are another recurring theme. Although major mining stocks have taken something of a hiding since June, some of the smaller players have turned in steller performances. First Calgary Petroleums tops the board courtesy of a takeover bid, but Nighthawk Energy, Petra Diamonds and Encore Oil have also risen by over 20 per cent in the past month.
However, Nighthawk (which is also a successful IC buy tip) could be running into trouble. The shares have come off in the past week, and managing director David Bramhill says he is aware of punters shorting the stock and then bashing Nighthawk on the bulletin boards.
Finally, there's a green tinge to the list of gainers, with carbon trading group Trading Emissions and solar glass manufacturer Romag putting in strong performances. The settlement of a discrepancy between the carbon credit registries of the EU and the UN has removed one of the great uncertainties in carbon trading.
You can do screens like this yourself using our stock screening tool, although you'll need to be an IC Advantage subscriber. Find out how to use the tool here.
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Warning: Do remember, particularly if you are new to stock market investment that the prices of shares and other investments can fall sharply. You may not get back the money you originally invested. The material here is for general information only and is not intended to be relied upon for individual investment decisions. Take independent advice before making such decisions. This site is aimed at UK residents only. To read more please see our Important Warning
-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
