Research by the Numis Small Companies Index team, notes the momentum premium has been considerable for smaller companies. If we flip this observation around, it is perhaps unsurprising to see smaller companies more likely to meet the criteria of our momentum Alpha screens. The screens look at EPS momentum and forecast upgrade momentum, as well as price, to give a deeper indication of positive sentiment in the market.
- Two smaller companies – asset manager Liontrust (LIO) and PR and healthcare comms specialist Huntsworth (HNT) pass all 8 of our momentum tests on the FTSE All Share screen. Huntsworth has seen its share price momentum taper off over the last month or so, but our screen criteria is that six, three and one month price momentum must be above the median for the index. Only one of six companies that pass at least 7/8 tests has a market cap above £1bn.
- Screening the FTSE All Small Companies index, sees Bio-decontamination and containment firm Bioquell (BQE) join Liontrust and Huntsworth with a perfect 8/8 score.
- Over on Aim, Fevertree (FEVR) is still going strong and other companies that pass all eight tests include Diversified Oil & Gas (DGOC), e-learning company learning Technologies (LTG), investment manager Miton Group (MGR) and healthcare software provider Craneware (CRW).
