Global markets have sold off as the pain caused by the Sino-US trade dispute is felt more seriously than it has been so far. Against this back-drop it is unsurprising to see so few companies score highly on our Alpha price and earnings momentum screen.
- Running the screen after close on one if the worst days for the market in months, not one constituent of the FTSE All Share index passes all 8 momentum tests, and just six companies fail only one test.
- Of these, Future Publishing (FUTR) falls short because forecast earnings growth for the next full year is below 10 per cent. Industrial software company AVEVA (AVV) only fails on one month share price momentum - unsurprising given the past week’s sell-off - but late cycle conditions for key customers is also a bear point.
- Mining giant BHP (BHP) also fails on one-month price momentum, although with iron ore futures looking shaky, this may be a longer-term momentum story that has hit its inflection point.
- On the other hand, a pause in momentum for digital businesses like Spirent Communications (SPT) and Kainos (KNOS), might represent the possibility of more attractive entry points.
