Momentum strategies show persistent outperformance. We run our Alpha momentum screen across three indices: FTSE All-Share, All Small and Aim. Here are three highlights.
- Royal Mail Group (RMG) has enjoyed a surprising turnaround since the depths of lockdown mk.1 last Spring. At first it struggled as mail volumes shrank and unions continued to agitate amongst its workforce – who are classed as frontline workers after all. But a rebound in postal volumes as coronavirus reshaped our way of life, potentially permanently, a compromise with the Communication Workers’ Union and the first fruits of its 2024 modernisation plan have combined to produce an upturn in fortunes. And the share price has responded in kind – more than tripling over the past year. It is perhaps little surprise investors have cottoned on to the chunky upgrades analysts have predicted for earnings in the coming year, although the following year looks set to be more prosaic, hence why Royal Mail failed one of our momentum tests.