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AlphaScreens: Aiming for momentum

Small companies on the junior market score best on our screen.
May 14, 2018

Not many companies pass all of our stringent price and earnings momentum criteria. Interestingly, within the small-cap universe, companies listed on the junior market are scoring better at the moment. 

  • NMC Health (NMC) now tops our FTSE All Share momentum screen. It’s the only company to pass all eight tests. Shares in the healthcare specialist have been on a tear for the past year, up 70 per cent in 12 months. Investors have been compelled by the positive earnings story as revenue per patient has increased. On a cautionary note, however, investors should pay attention to possible dilution of equity and how the company’s debt position evolves, if it taps capital markets to fund further expansion.
  • Isolating smaller FTSE All Share companies, there are no small-caps which score eight-out-of-eight. Three small companies fail just one test. Huntsworth (HNT), the Healthcare communications firm, has seen spectacular growth in its share price but this has come off slightly and the company no longer has one-month momentum above the median. The same test was failed by Haynes Publishing (HYNS), which last month scored 8/8 on the screen. Price comparison site Gocompare.com (GOCO) fell down on the strength of its earnings growth.
  • Looking at the Aim screen, three companies didn’t fail any tests. Marketing software and solutions provider dotDigital (DOTD); Symphony Environmental Technologies (SYM), which appears to be benefiting from the prevailing zeitgeist regarding sustainability; and AB Dynamics (ABDP), which makes testing systems for the motor industry, score perfectly against the screen.
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