TIPS IDEAS FARM theme of growth into unloved value. Can value take momentum’s mantle? The observations made by Mr Klement have two potentially interesting implications ALGY HALL for finance academics. A central finding from for this ferocious swing in sentiment towards ur style chart aims to provide an idea of how comparing the markets was that B-shares dem- value. Firstly, if momentum has become a Oeffective different investment approaches onstrated much more momentum than A-shares. stronger long-term force in markets, it’s pos- have been over the past three months. Broker For Liberum investment strategist Joachim sible that the most unloved sectors and stocks Liberum, which also tracks investment styles, has Klement, a major potential insight is: “ ...the lack have become very excessively over sold. They recently put forward some interesting reasons of noise traders in the B-share market creates could therefore have a lot of ground to make why one style, momentum, may have enjoyed a bigger impact from the herding behaviour of up (‘mean reversion’ in City jargon). such success over recent years. And the logic of professional investors... enhancing momentum. Second, if that’s true and value’s recent its argument has potential ramifications for the This, in turn indicates that with the continuing fillip manages to develop into a lengthier longevity of this week’s sharp rotation by markets decline of retail trading and the shift towards period of outperformance, then value should away from growth stocks and into value. active and passive investments managed by become the beneficiary of the turbo-charged The broker highlights findings from research professional managers, the momentum effect forces of momentum; meaning value inves- into the Chinese A and B-share markets from could remain the dominant factor.” tors could benefit more, and for longer, than Hong Kong Polytechnic University, and the There is a flipside to this observation, would otherwise be the case. Indeed, the Universities of California and Texas. These which is that the market’s unloved stocks beauty of momentum is its loose attachment markets are fertile grounds for researchers into may be becoming more unloved… at least to fundamental analysis. While it gets caught investor behaviour because A-share trading is until something dramatic happens to cause out by sharp changes in trend, it soon adapts dominated by domestic retail investors and so- a mass reassessment. And this week we’ve and takes up the mantle of the latest style that called “noise” traders, in contrast with B shares, certainly had a dramatic event. The combina- appears to be working. which attract significant money from overseas tion of the US election result and a potential The caveat to all this (and it’s a biggie) is that professional investors. In research terms, this vaccine breakthrough has prompted a sharp ‘value’ has had many false dawns during its is like having a “control” group; a rare luxury move away from the dominant momentum recent decade of dire underperformance. Fund manager best ideas: UK All Companies (top 50) New 52-week highs (top 30) Based on top 3 most overweight Name TIDM Price % from high No of funds Sage 2 (-2) Highbridge Tactical Credit Fund HTCF 214p 0.00% Future 6 YouGov 2 Aberdeen New Dawn Investment Trust ABD 300p 0.00% Spirax-Sarco Engineering 4 Admiral 1 VinaCapital Vietnam VOF 354p 0.00% B&M European Value Retail SA 3 (+1) Anglo American 1 Martin Currie Global Portfolio MNP 367p 0.00% Daily Mail and General Trust Class A 3 (+1) Ashtead 1 International Public INPP 173p 0.10% Dechra Pharmaceuticals 3 (+2) Asos 1 Schroder AsiaPacific Fund SDP 583p 0.30% Dunelm 3 (+2) Aveva 1 Games Workshop 3 (+2) Berkeley Group PLC1 1 (NEW) Impax Environmental Mkts IEM 421p 0.50% Liontrust Asset Management 3 (-1) Bodycote 1 (NEW) Triple Point Social Housing REIT SOHO 113p 0.50% Spirent Communications 3 Breedon 1 Xaar XAR 160p 0.60% Ascential 2 Centamin 1 KAZ Minerals KAZ 631p 0.70% Avon Rubber 2 Chemring 1 (NEW) BBGI Global BBGI 175p 0.80% Boohoo 2 (-1) ConvaTec G 1 Asia Dragon Trust DGN 486p 0.80% Electrocomponents 2 (-1) Derwent London 1 (NEW) JPMorgan Global Growth JGGI 377p 0.90% Euromoney Institutional Investor 2 (NEW) Diploma 1 Aberdeen Standard Euro Logistics Inc ASLI 112p 0.90% Frontier Developments 2 Domino’s Pizza 1 (NEW) Henderson European Focus HEFT 1,355p 1.10% Gamesys 2 (NEW) Experian 1 Gresham House GHE 785p 1.30% Gamma Communications 2 Fevertree Drinks 1 (NEW) Genus 2 (NEW) GB 1 Mid Wynd Intl Investment Trust MWY 700p 1.30% Halma 2 GlobalData 1 (-1) Capital Gearing Trust CGT 4,530p 1.30% Ocado 2 Grainger 1 (NEW) Fidelity Japan Trust FJV 222p 1.30% Pets at Home 2 (+1) Helios Towers 1 Jubilee Metals JLP 7p 1.40% Playtech 2 (NEW) IMI 1 (NEW) Hipgnosis Songs SONC 105p 1.40% Prudential 2 (NEW) IntegraFin 1 (-1) Baillie Gifford UK Growth BGUK 207p 1.40% QinetiQ 2 (+1) IWG 1 Volex VLX 275p 1.40% Source: Morningstar, as at 11 November 2020 Renishaw 2 (NEW) YouGov YOU 1,040p 1.50% Syncona SYNC 266p 1.50% New 52-week lows Genesis Emerging Markets GSS 840p 1.50% RiverFort Global Opportunities RGO 1p 1.60% Name TIDM Price % from low Kenmare Resources KMR 299p 1.60% Shearwater SWG 131p 0.80% HgCapital Trust HGT 304p 1.70% DP Eurasia DPEU 31p 2.30% Pacif Asset Tru PAC 294p 1.70% Personal Group PGH 213p 2.60% Source: FactSet, as at 11 November 2020 Source: FactSet, as at 11 November 2020 64 INVESTORS CHRONICLE 13 NOV - 19 NOV 2020 TIPS IDEAS FARM Style: 3 months to 11 November 2020 (%) 1-month EPS upgrades (top 25) 12 FWD EPS CHG Name TIDM 1mth 3mth 1yr 10 Gem Diamonds GEMD 3689.40% 881.80% -47% 8 James Cropper CRPR 3586.40% - - 6 Hotel Chocolat HOTC 1580.10% 195.30% -60% Pendragon PDG 363.60% -66.70% - Performance (%) 4 Hollywood Bowl BOWL 247.00% -64.50% -91% 2 MJ Hudson MJH 194.70% 194.70% - 0 Wey Education WEY 105.60% 85.00% 1133% ValueQuality GrowthMom FTSE All Share Source: FactSet ZOO Digital ZOO 87.00% 89.50% -7% Proactis PHD 72.20% 55.00% - Barclays BARC 60.90% 62.60% -64% Shorts (top 10) LiDCO LID 54.30% - - Urban&Civic UANC 51.30% -39.10% -39% Short No of 1-week change Alfa Financial Software ALFA 50.80% 464.70% 45% Company interest shorters in short interest Victoria VCP 50.00% 50.00% -59% Cineworld 9.60% 10 0.20% Norcros NXR 48.90% 48.90% -38% Premier Oil 9.10% 3 0.00% Bango BGO 46.70% -35.30% 83% Tullow Oil 8.90% 6 0.40% IG Design IGR 44.50% 44.50% -32% Petrofac 7.70% 4 0.00% Associated British Foods ABF 44.30% 49.50% -24% Hammerson 7.60% 6 -0.10% Bellway BWY 38.90% -1.60% -36% Metro Bank 7.60% 4 -0.70% Trans-Siberian Gold TSG 36.50% 6.30% - Pearson 7.40% 7 0.00% Lloyds Banking LLOY 35.10% 4.10% -83% Sainsbury (J) 6.80% 5 0.10% Royal Dutch Shell RDSB 34.80% 23.70% -71% Rolls-Royce 5.70% 6 0.90% REACT REAT 33.30% 33.30% - Petropavlovsk 5.50% 2 0.00% Royal Dutch Shell RDSA 33.20% 22.60% -71% Babcock International 5.30% 3 0.00% Bloomsbury Publishing BMY 32.90% 0.50% -27% Weir 4.90% 5 -0.10% Source: FactSet, as at 11 November 2020 Network International 4.80% 4 0.00% Vodafone 4.40% 4 0.00% IQE 4.40% 3 -0.10% Wm Morrison Supermarkets 4.30% 4 0.70% 1-month EPS downgrades (top 25) Wood Group (John) 4.10% 6 0.00% FWD EPS CHG Future 4.10% 4 0.10% Name TIDM 1mth 3mth 1yr Tui Ag 4.00% 5 -0.80% Syncona SYNC -100.00% -100.00% - Micro Focus International 3.80% 3 0.00% Iofina IOF -93.60% -94.40% -91% Source: FCA, as at 11 November 2020 Gattaca GATC -89.50% -89.50% -96% TheWorks WRKS -88.60% -88.30% -93% Intu Properties INTU -87.80% -82.90% -96% Biggest short increases Lancashire LRE -81.90% -90.30% -93% Totally TLY -56.70% -56.70% -7% Short No of 1-week change InterContinental Hotels IHG -50.70% -68.20% -93% Company interest shorters to 4 November Tekmar Group TGP -48.20% -47.80% -75% Next 1.70% 2 0.90% Atalaya Mining ATYM -40.50% -34.30% -41% Rolls-Royce 5.70% 6 0.90% Midwich MIDW -35.00% -77.40% -82% Wm Morrison Supermarkets 4.30% 4 0.70% Mercia Asset Management MERC -28.60% -69.00% - Asos 0.60% 1 0.60% Ascential ASCL -24.80% -25.40% -91% Schroders 0.50% 1 0.50% James Fisher & Sons FSJ -24.60% -28.80% -49% Source: FCA, as at 11 November 2020 Topps Tiles TPT -24.40% - -97% Royal Mail RMG -23.90% - -87% Petropavlovsk POG -22.50% -14.70% 373% Biggest short drops Forterra FORT -21.50% 0.70% -82% Short No of 1-week change STM STM -20.00% -24.30% -52% Company interest shorters to 4 November RDI REIT RDI -19.50% -19.90% -49% Telit Communications 0.60% 1 -0.90% Venture Life VLG -17.30% -20.60% 70% N. Brown 2.90% 2 -0.90% Kenmare Resources KMR -16.60% 6.70% -78% Tui Ag 4.00% 5 -0.80% Saga SAGA -16.40% -82.80% -94% Capita 3.10% 4 -0.70% Hammerson HMSO -16.10% -55.80% -82% Metro Bank 7.60% 4 -0.70% Equiniti EQN -14.60% -21.90% -50% Source: FCA, as at 11 November 2020 Source: FactSet, as at 11 November 2020 13 NOV - 19 NOV 2020 INVESTORS CHRONICLE 65 .