Buying the market on momentum is a winning strategy over time as tombs of academic research has shown – although investors must acknowledge the risk of large peak-to-trough drawdowns when momentum does fail. When it comes to individual companies, however, a more rigorous approach is needed which is why our momentum screen looks at earnings growth and earnings forecast upgrade momentum too.
- Not one company included in the FTSE All Share index meets all our criteria and only one small main market company – Haynes Publishing (HYNS) – gets full marks.
- Aim can be a hunting ground for companies that analysts are optimistic about, even if the macro picture is challenging and three companies pass all the tests. These are legal services firm Knights Group Holdings (KGH), monitoring and control products specialist Elektron Technology (EKT) and healthcare IT and data services provider Instem (INS).
