TIPS IDEAS FARM

our upgrade and downgrade tables now The fact that the signal from forecast If it ain’t broke(r) only contain details of changes over the past changes is not always clear does not mean month so it can accommodate some of our the information is not useful, though. What it ALGY HALL data additions. However, the downloadable does mean is that upgrades and downgrades e’re keen to keep improving the data online version of the table, which is available need to inform broader research rather than Wpublished in our Ideas Farm, and this for free to all registered users, continues to being taken as a hard-and fast-signal. week we have attempted to spruce up how we contain information about forecast move- The kind of upgrade or downgrade that is present broker upgrades and downgrades. ments over additional periods of three really interesting for investors is the type that Some of the large changes in forecasts are months and one year. looks synonymous with a longer-term trend. the result of a company having very piddly The example of Topps illustrates a quan- Brokers are often consistently ‘wrong’ with EPS forecasts in the first place. For example, dary investors have when trying to attach sig- their forecasts and shares can move when- this week the 1,683 per cent next-12-month nificance to broker upgrades and downgrades. ever they are forced to upgrade or downgrade EPS upgrade reported for Topps Tiles (TPT) When earnings forecasts are depressed, big next. It is important to appreciate that this needs to be seen in the context of the fact percentage changes can result from relatively ‘wrongness’ is often for good reasons. After that one month ago brokers were forecasting minor changes in absolute terms. Indeed, the all, we’re talking about forecasts made by only 0.2p of earnings over the same period consensus forecast for Topps’ EPS over the smart people with huge knowledge of the (the 12 months to 2 Dec 2021). coming 12 months remains 24 per cent below sectors and companies they cover. When The fact this represents less bad trading what was expected for the same period a year forecasts are persistently off in the same conditions rather than startling growth can ago. Meanwhile, if a company has limited direction, it can be a sign that there is a trend also be seen in more context by comparing broker coverage, the simple fact that a forecast influencing trading that cannot be reliably forecasts with the current share price of 56p. from a new broker becomes amalgamated into factored into models. Understanding the This is why we are also including share price the consensus number can look like a major narratives behind such trends and backing date in our new version of the table. change, whereas it may just represent a new such themes when they look likely to persist Page space means the print version of opinion on prospects. can be very profitable. Fund manager best ideas: UK Sustainable New 52-week highs (top 30) Based on top 5 holdings Name TIDM Price % from high Inspiration Healthcare 1 (NEW) No of funds Royal Mail RMG 325p 0.00% Intermediate Capital 1 AstraZeneca 4 HRI 1,998p 0.00% London Stock Exchange 4 1 Impax Asset Management IPX 600p 0.00% RELX 4 (+1) LondonMetric Property 1 JP Morgan European Smaller Cos Trust JESC 470p 0.00% AVEVA 3 National Grid 1 (-1) Croda International 2 1 (NEW) Hipgnosis Songs SONC 111p 0.00% Experian 2 (+1) Phoenix 1 Gabelli Value GVP 137p 0.00% GlaxoSmithKline 2 (-1) Polypipe 1 Treatt TET 698p 0.00% Primary Health Properties 1 (NEW) HSBC 2 EQTEC EQT 1p 0.00% Reckitt Benckiser 1 Kingspan 2 Henderson EuroTrust HNE 1,425p 0.00% Nestle SA 2 (+1) Rio Tinto 1 AAF 87p 0.00% Rentokil Initial 2 S&P Global Inc 1 Lamprell LAM 42p 0.00% Smurfit Kappa 2 SDL 1 (NEW) AB Dynamics 1 (NEW) 1 (-1) Greatland Gold GGP 28p 0.00% AJ Bell 1 (NEW) SSE 1 (NEW) BlackRock World Mining Trust BRWM 468p 0.20% Ashmore 1 1 Anglo American AAL 2,329p 0.20% Thermo Fisher Scientific Inc 1 B&M European Value Retail SA 1 RSA Insurance RSA 677p 0.30% Tristel 1 (NEW) 1 ATST 896p 0.30% Close Brothers 1 (NEW) Unilever NV 1 Fidelity European Trust FEV 276p 0.40% 1 Unilever 1 Diageo 1 UnitedHealth 1 Schroder AsiaPacific Fund SDP 592p 0.40% Diploma 1 Inspired Energy 1 Aberdeen New India Investment Trust ANII 492p 0.40% Dunelm 1 IQGeo 1 Accsys Technologies AXS 120p 0.40% John Laing 1 EKF Diagnostics 1 TEMIT TEM 925p 0.40% Jubilee Metals 1 Frontier Developments 1 Capital Gearing Trust CGT 4,620p 0.40% 1 Kainos 1 Antofagasta ANTO 1,311p 0.50% Gamma Communications 1 London Stock Exchange 1 AVON 4,625p 0.50% GB 1 LoopUp 1 Genus 1 Marlowe 1 (NEW) Baillie Gifford Japan Trust BGFD 1,020p 0.60% Gresham House 1 Mattioli Woods 1 Ferguson FERG 8,572p 0.60% Halma 1 NCC 1 (NEW) MNKS 1,282p 0.60% Netcall 1 1 (NEW) Augmentum Fintech AUGM 144p 0.70% Novacyt SA 1 (NEW) Hikma Pharmaceuticals 1 JPMorgan American Investment Trust JAM 572p 0.70% Hill & Smith 1 (NEW) Omega Diagnostics 1 (NEW) FXPO 225p 0.70% Howden Joinery 1 Source: Morningstar, as at 2 December 2020 Source: FactSet, as at 2 December 2020

38 INVESTORS CHRONICLE 4 DEC - 10 DEC 2020 TIPS IDEAS FARM

Shorts (top 35) 1-month EPS upgrades (top 25) FWD EPS CHG Short No of 1-week change Company interest shorters in short interest Name (Price) EPS NTM 1mth ago Premier Oil 11.10% 3 0.20% Topps Tiles (56p) 3.8p 0.2p 1,683% Pearson 9.00% 9 0.40% Royal Mail (308p) 18.0p 2.2p 704% 8.80% 8 1.10% Melrose Industries (154p) 1.0p 0.1p 637% 8.40% 6 -0.40% ZOO Digital Group (67p) 1.2ȼ 0.4ȼ 191% Petrofac 8.30% 4 0.00% Virgin Money UK (127p) 10.1p 4.3p 137% Sainsbury (J) 7.90% 7 1.00% Wey Education (28p) 0.7p 0.4p 106% 6.30% 5 0.00% Group (117p) 8.6p 4.5p 91% Metro Bank 6.10% 3 -0.70% IG Design Group (620p) 25.0p 14.9p 68% Petropavlovsk 5.50% 2 0.00% Yellow Cake (195p) 38.5ȼ 24.0ȼ 60% 5.00% 4 0.30% Renewi Plc (34p) 1.9€ȼ 1.2€ȼ 55% Weir 4.70% 5 0.00% Victoria (588p) 17.0p 11.2p 52% Wm Morrison Supermarkets 4.50% 4 0.00% Cerillion (360p) 15.5p 10.4p 49% Vodafone 4.40% 4 0.00% Associated British Foods (2,110p) 111p 78.0p 43% Domino’s Pizza 3.60% 5 0.00% Intermediate Capital Grp (1,636p) 94.4p 66.8p 41% 3.50% 2 -0.80% Tui Ag 3.40% 4 -0.60% Speedy Hire (69p) 2.6p 1.8p 38% Hurricane Energy 3.30% 3 -0.20% Shanta Gold (14p) 1.0ȼ 0.7ȼ 37% Future 3.30% 4 -0.80% Compass Group (1,324p) 29.8p 22.2p 34% 3.00% 1 0.00% TI Fluid Systems (221p) 5.0€ȼ 3.9€ȼ 29% N. Brown 2.90% 2 0.00% Diploma (2,120p) 73.0p 56.5p 29% Auto Trader 2.90% 5 0.00% Gem Diamonds (47p) 2.7ȼ 2.1ȼ 27% Hargreaves Lansdown 2.90% 4 0.10% Games Workshop Group (9,840p) 322p 255p 26% AA 2.80% 2 0.00% Macfarlane Group (85p) 7.6p 6.1p 25% St James’s Place 2.80% 4 0.00% Future (1,688p) 87.1p 69.5p 25% 2.80% 2 0.00% STM Group (31p) 3.5p 2.8p 25% IQE 2.70% 2 -1.70% 3i Group Plc (1,071p) 167p 134p 25% B&M European Value Retail S.a. 2.50% 3 0.10% Source: FactSet, as at 2 December 2020 Intercontinental Hotels 2.50% 3 0.00% Ashmore 2.50% 3 -0.10% British Land 2.50% 2 -0.30% 1-month EPS downgrades (top 25) Primary Health Properties 2.40% 3 0.00% FWD EPS CHG Keywords Studios 2.40% 3 0.00% Vitec 2.30% 2 0.00% Name (Price) EPS NTM 1mth ago Gattaca (84p) 1.0p 9.2p -90% Blue Prism c 2.20% 2 0.00% TheWorks (28p) 0.5p 3.8p -88% Wood Group (John) 2.20% 3 -1.00% Source: FCA, as at 2 December 2020 Helical (364p) 1.9p 5.5p -66% Totally (19p) 0.9p 2.0p -57% Group (2,455p) 14.3ȼ 24.7ȼ -42% 5 biggest short increases CentralNic Group (93p) 3.4ȼ 5.6ȼ -38% RDI REIT (93p) 4.9p 7.3p -33% Short No of 1-week change James Fisher & Sons (950p) 43.2p 63.3p -32% Company interest shorters to 2 December Petropavlovsk (27p) 2.5ȼ 3.5ȼ -28% Loopup Group 2.10% 2 2.10% Nichols (1,080p) 36.1p 47.2p -24% Cineworld 8.80% 8 1.10% Pebble Group (107p) 2.1p 2.7p -23% Sainsbury (J) 7.90% 7 1.00% Gateley Holdings (158p) 10.5p 13.4p -22% Kingfisher 0.50% 1 0.50% Caledonia Mining (1,140p) 150ȼ 191ȼ -21% Unilever 0.50% 1 0.50% Griffin Mining (87p) 1.0ȼ 1.2ȼ -21% Source: FCA, as at 2 December 2020 Equiniti Group (110p) 8.8p 11.0p -21% Trifast (150p) 6.5p 7.9p -17% ContourGlobal Plc (198p) 8.7ȼ 10.5ȼ -17% 5 biggest short drops Town Centre Securities (115p) 2.5p 3.0p -17% Short No of 1-week change Group (38p) 3.7p 4.4p -16% Company interest shorters to 2 December AA (32p) 11.0p 13.1p -16% IQE 2.70% 2 -1.70% Morses Club (39p) 8.4p 9.9p -15% 0.70% 1 -1.20% McColl’s Retail GRP (31p) 4.3p 5.0p -14% Next 0.90% 1 -1.00% Serabi Gold (79p) 12.6ȼ 14.7ȼ -14% Wood Group (John) 2.20% 3 -1.00% Plc (225p) 3.7p 4.3p -14% Babcock International 3.50% 2 -0.80% Marks & Spencer Group (126p) 5.8p 6.6p -13% Source: FCA, as at 2 December 2020 Source: FactSet, as at 2 December 2020

4 DEC - 10 DEC 2020 INVESTORS CHRONICLE 39