Did you back any of these?

Below is a list of the top 10 performing shares with their percentage increase from the FTSE all share index for this year so far. Who would have thought that the top two spots would be taken by a company that needed rescuing and another struggling to make a profit but it's internet profile attracted interest from a bigger rival because it lacked that web presence.

Considering we are only 6 months into the year these are impressive returns, but can it last? Ocado, long a favorite of short sellers has seen an impressive return of over 200% so far. Anyone going short for any length of time would need deep pockets to keep those trades open.

Thomas Cook Group PLC 211.46
Ocado Group PLC 204.10
Xaar PLC 128.07
UK Mail Group PLC 75.88
Bank of Georgia Holdings PLC 71.84
easyJet PLC 66.88
CSR PLC 66.18
St Ives PLC 62.55
Lamprell PLC 62.23
Man Group PLC 61.88

http://www.investmentweek.co.uk/investment-week/news/2271257/top-of-the-stocks-the-ten-best-uk-shares-of-2013-so-far

Quindell Portfolio - Incredibly cheap or crash and burn - Part 2.

Quindell Portfolio is one of the smaller AIM companies that I have been following recently. On paper it seems a remarkable story and looks like one of those penny share tiddlers that many investors dream about. The type of share that can be had for a few pence, but looks to have the potential to go much higher, a ten bagger or much more.

For some investors it is psychologically nice to own a lot of shares in a company and penny shares have always had their own unique attraction, although in reality they are often expensive if only because there are often hundreds of millions or billions of shares to be had. Penny share companies will often have a new issue to fund new ventures going forward or simply to raise more cash in order to survive. This will dilute any holding you may have, even if it does look good to hold a lot of shares you still don't have value and many small investors have been burned by smaller company penny shares.

Such companies tend to attract a strong vocal following and Quindell, certainly if bulletin boards are anything to go by, has its fair share of committed followers. It was recently in the news for all the wrong reasons as mentioned here which attracted the attention of short sellers, the share price being in free fall for several days. The debate on the BB's got very heated between defenders and attackers (bulletin boards on fire), the share price recovered slightly, but still lags, the trend looking horribly down.

Some have suggested that there are enough red flags about this company to make it one not to invest in. Others that the story is a good one with enough positives to suggest that the market is seriously undervaluing its worth. The market can be a strange place, because there certainly are plenty of companies doing far less than Quindell that have silly valuations applied to them. Nevertheless the market still doesn't quite believe the Quindell story, that what looks to good too be true may be exactly that.

Furthermore, the CEO of Quindell was previously the CEO of a similar company called the Innovation Group. That company grew by acquisition and its share price flew on the back of it. The rapid growth by acquisition at that time didn't stop the share price eventually collapsing though and Innovation is still a long way off its past share price highs and may never get back there. Thanks to the internet it is not that difficult to dig up some of the past history of Innovation and you do wonder if history is repeating itself.

It's Tuesday, so the market must be up.

Well, it's the day after the bank holiday and following up a jittery end to last week, the market seems to remember that it's Tuesday and that means it's time to go up. Never as simple as that but the Dow is going for 20 in a row on Tuesday and today's action so far has been pretty strong considering that the end of last week suggested that volatility and uncertainty was back. Maybe it is, but for now it's still super Tuesday time.

Super Tuesday.

http://sevenpillarstrading.blogspot.co.uk/2013/05/super-tuesday.html

The Bernanke sell off, some sanity returns?

Yesterday was one of those strange market days. The big speech of the day came from Fed Chairman Ben Bernanke and at first the US markets rose as it all seemed quite tame with little sign that the Fed induced intervention was likely to stop. The market has been living off this form of money steroids for some time and like a drug, once on them it is difficult to withdraw. So, at the first hint that the Fed may be winding down its activities the market got a bad case of withdrawal symptoms and things seemed like the old volatile times before the most recent bull run. Down they went.

Talking of bull runs, the Japanese market has been going great guns since the start of the new year, but yesterday gave it an excuse to sell off with traders banking profits on the back of some not so well received news from China and Bernanke's speech. Around 7% or 1000 points in a day, which after the most recent run doesn't look too bad accept that it is almost approaching crash territory, without anyone saying the word crash. Banking profits sounds better and at least it doesn't feel like a crash, at least until we see what follows.

Futures suggest another down day today in the US and the UK looks to have its first minus 100+ start to the day for some time. The fact is that this was needed to remove some of the froth that has been building in the market for some time. It's healthy that markets do occasionally fall during a bull run. Whether the psychology behind the bull run has been damaged only time will tell. Sooner or later equity markets have to stand on their own two feet without the assistance of Central Banks pumping money their way. We need to wait to see if and when this dip is bought or if this is the start of something else more challenging for markets.

Update;

FTSE100 currently off around 135 points.

ADVFN market report states the obvious which markets seem to have been ignoring for some time.

However, when faced with questions from politicians, the Fed chief did hint that a tapering of QE measures could happen “in the next few meetings” if the Fed sees a sustained improvement in the economy.

Simon Smith, the Chief Economist at FxPro said this morning: "The message is markets have to remind themselves that in many ways they are living on borrowed time and the Fed is doing their level best to prepare them for the fact that they cannot continue to buy $85bn of assets a month for ever. We could well be headed for a much more volatile summer."

Bernanke's comments saw the FTSE 100 lose as much as 1.7% in early morning trade, following similar falls for benchmarks on Wall Street overnight. Meanwhile in Asia, markets suffered much steeper losses overnight - with Japan's Nikkei diving a whopping 7.3% - as traders reacted to remarks from the Fed Chairman as well as some gloomy economic data from China.

FTSE100 - another look at the monthly chart, 7000 on the cards?

It has been quite an amazing run since the new year, even more so when you consider that the markets had been going well as 2012 ended. In this post at the end of January I entertained the possibility that we would see 7000 at some stage this year, but I didn't think we would be getting over 6800 by mid to late May and within touching distance of 6900. Mind you, back in January I did say that the monthly chart almost looked too good and that continues, the chart is very bullish. Every minor dip has been bought and while we must assume that at some stage there will be a correction of sorts, there is very little for bears in this chart. Many who went short the FTSE, and other indices, because it looked too high or a correction must be just around the corner will have got their fingers burnt. They must be looking at a different chart to the ones I'm seeing as there have been few signals to go short.

One thought that has occurred to me is that as valuations become stretched as the market goes higher, it is just possible that in a low IR environment where there is little return to be had on cash in the bank, the markets might be just as happy with smaller returns in terms of dividend yield from companies going forward. Therefore, more racy valuations, which we are already starting to see on many stocks may become the new norm as chasing growth and momentum seems back in vogue, but the yield still beats cash on deposit.

The FTSE100 currently has an average dividend yield of 3% and a P/E over 17 and as the index goes higher yield goes lower and P/E's become more stretched. The markets are pricing in recovery, but at a time when you will struggle to get 1-2% on cash, a 3% yield with capital growth thrown in is very attractive. However, one has to wonder how much longer shares offering 4%+ yields will be available and as the bull continues how long will it be before the average FTSE yield is closer to 2% than 3%? Even if it gets to 2%, it beats cash in the bank, although capital risk is always higher with our cash in shares, except of course when the banking system itself faces collapse as it did in 2008. Any correction that does happen pushes up that yield, assuming companies continue to do well and there is no further economic tailwinds ahead. For now, the market seems content to accept a lower overall yield from equities it would seem.

FTSE100 - Monthly

Video market round up for the week ending 17th May 2013

A week ending round up of the markets from Steve Briggs YouTube channel.

Included in the FTSE100 and 250 round up is a list of companies that reached new highs by Friday of last week, 25 in the FTSE100 and 73 in the FTSE250.

Links:

Steve's YouTube site http://www.youtube.com/user/sjb5555.

Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/

Super Tuesday

What is it about Tuesday that investors and traders seem to like? 

In the US the Dow seems to enjoy Tuesday.

CAN’T wait any longer for that pullback? Just buy on a Tuesday – for the last 18 Tuesdays, the Dow Jones Industrial Average has risen every time. The winning streak began on January 15th, with the Dow since rising by more than 1,700 points. Over 1,400 of those – more than 80 per cent – have been added on Tuesdays, Bespoke Investment Group notes.

Such a winning run is unheard of over the last century, breaking the previous record (15) set back in the 1920s.

The following stat shows that the UK has its own Tuesday moments.

In the UK, Tuesdays have been bullish for some time, says the UK Stock Market Almanac. Since 2000, when the market has fallen on a Monday, the following day’s returns have been five times greater than average.

http://www.irishtimes.com/business/personal-finance/stocktake-rising-risk-of-melt-up-in-five-year-us-bull-market-1.1400770

So far today the US is just hanging on to a gain that will make it 19 in a row.

But there is also some history here.

Tuesdays are up a cumulative 77% since 2003. A distance second, Thursday sessions are up a 10.1%. And forget about Monday and Fridays: They’re down 1.3% and 2.3%, respectively.

This string is a bit less random if viewed through this longer-term lens, but good luck getting someone to explain it — adequately. The Stock Trader’s Almanac gives it a shot by saying that “traders have not been inclined to stay long over the weekend, nor buy up equities at the outset of the week.”

http://blogs.marketwatch.com/thetell/2013/05/21/goodbye-bullish-tuesdays-not-quite-as-market-sets-sights-on-19-straight/

So, making the most of Tuesday would have been a good trading strategy for some time, but will that continue now the cat is out of the bag and we now know? Probably, as in time most will forget and just carry on as before. That means that over time Tuesday will probably continue to be the day to trade, although it may have more meaning for shorter term day or swing traders than those with a longer view.

The Week Ahead 4 - 20th to 24th May 2013

Markets continue to go up, dips keep on being bought.

A selection of companies reporting this week.

Tuesday, 21st May

Interim - Greencore Group updates the market and has been recovering well after falling heavily back in February due to the horsemeat scandal. That blip in the share price when it fell to around 80p has been more than made up as it now stands at around 118p.

Finals -  Telecom Plus and Vodafone.

We could see two contrasting reports from these two telecoms companies. Telecom Plus just seems to keep on going up and up on the back of good results, it has been a good few years since it has had any blip in performance. As a FTSE250 growth company it will be a surprise if they come up with anything unexpected.

On the other hand Vodafone might be about to make an announcement about the size of likely future dividends if press speculation is anything to go by. There is also the little matter of their Verizon Wireless holding which continues to help keep the price up in recent months on speculation of a buy out, but remains an ace card for the company if ever a deal is done.

Business elsewhere is not so hot.

Meanwhile, Vodafone is expected to reveal annual results that show the impact of the continuing Eurozone crisis and European regulation on its core business. 

Vodafone will report a drop in sales in the wake of heightened competition, analysts predict. 

They have also projected that the company will show its growing reliance on Verizon Wireless for profits. Last week, Vodafone announced that will receive more than £2.0bn from its stake in the US join venture with Verizon. 

Verizon Wireless, which has been at the centre of takeover rumours by Verizon for months, is paying a total of $7.0bn to shareholders at the end of June. 

Vodafone, which owns 45% in VZW, will receive $3.2bn, while Verizon will pocket the rest. 

http://www.digitallook.com/news/20907957/Tuesday_preview_M_S_and_Vodafone_report.html?username=&ac=

Final - Marks and Spencer. Not expected to be that good which given the recent run up in the share price since mid March makes you wonder what is going on. The easy answer is that we are in a bull market which takes everything up with it, but the results this week could see a sell off if profits are down as many expect. Better to have ridden the wave up with this one perhaps.

Analysts forecast M&S will report its lowest annual profit in four years, as the retailer’s struggling general merchandise division continues to offset a rise in food sales. 

The firm’s clothing business has posted seven consecutive quarters of underlying sales declines, prompting an overhaul of the division to draw in more customers. 

M&S is anticipated to post a pre-tax profit of £640 to £670m with a consensus of £658m, according to a company poll reported by Reuters. The group made a £706m profit the year earlier. 

http://www.digitallook.com/news/20907957/Tuesday_preview_M_S_and_Vodafone_report.html?username=&ac=

Thursday, 23rd May

Final - Qinetiq. Will be interesting to see what if anything they report on cutbacks or delayed contracts with the US as budget spending goes on hold. Share price has dipped and struggled recently on fears that spending on defense will be cut going forward.

Bovis Homes, IMS confirms more buying interest thanks to Government help

Following on the theme set out here that UK house prices cannot be allowed to fall by any significant level, it has been interesting to read the management reports of market quoted companies like Taylor Wimpey, Barratt, etc as to any pick up in business since the Government announced its intention to help prop up the market in the last budget. Today Bovis Homes reported and they basically confirm what we already should know by now, that house building construction should continue its bullish trend going forward.

They reported;

David Ritchie, Chief Executive, commented:

"The ongoing success of the Group's growth strategy has driven strong trading in early 2013.  Homebuyer sentiment has been improving and, with the recently announced Government initiatives, sales rates have increased ahead of management's expectations.  The increased number of active sales outlets in excellent locations, delivered from the Group's assertive land buying over the last few years, provides a great opportunity to take advantage of the improving market backdrop and further strengthen shareholder returns."

Current trading

Trading in the 19 weeks to 10 May 2013 has been strong with the Group achieving 989 private net reservations (2012: 783), a 26% increase year on year.  This has been driven by an 11% increase in the average number of active sales outlets to 91 (2012: 82), and a 14% improvement in the average private sales rate to 0.57 net reservations per site per week (2012: 0.50).  The number of visitors to the Group's sites has increased by 29% in the year to date compared to the same period last year.

http://www.digitallook.com/news/rns/20899760-11178/BVS-Interim_Management_Statement_html

Valuations of these companies may well be stretched already, but momentum is with it and the sector is likely to remain bullish given the size of Government intervention. It is unlikely that Government will do anything to harm this sentiment given the importance of the home owning/desire for ownership vote that exists in the UK. Regardless of who the Government is, they are likely to throw taxpayer money at the housing sector if at any stage prices look to be lagging or demand is down because people can't afford to buy because prices are too high. Their answer to high prices is always to provide subsidies to buyers, I doubt that will end any time soon.

 

FTSE100 Update - Bull run continues

FTSE100 continues to go up with every brief dip being bought. Both the daily and weekly charts look bullish. On the daily chart we have just had a new 20/50 dma crossover to the upside, the same crossover on the weekly chart having been positive for some time. Bollinger Band has opened towards the upside and while the MACD is slightly extended on the daily chart it is only just crossing on the weekly chart. This suggests that even if we get a pullback on the daily, the trend remains bullish as long as the weekly MACD trends up. Certainly no sign of Sell in May so far.

Click to see charts below.

Monitise, a five bagger in the making?

The Monitise share price got a lift towards the end of last week after it was revealed that one hedge fund manager had come out saying that this one might be a big winner going forward.

Billionaire hedge fund manager Leon Cooperman listed some of his favorite stocks on Thursday and said the biggest winner of all might be mobile banking company Monitise.

"That's a five bagger," Cooperman, who runs Omega Advisors, said about Monitise at the SkyBridge Alternatives Conference on Thursday. "That's the one I would pick to win a contest with," he said on a panel that discussed fund manager's best ideas.

http://www.reuters.com/article/2013/05/10/uk-hedge-fund-cooperman-idUSLNE94900120130510

Fairly confident prediction there. Perhaps one of the better blue sky opportunities out there, but those interested need to remember it has yet to turn a profit.

Quindell Portfolio, Bulletin Boards on fire, shares continue to fall.

The sorry case of the falling share price of Quindell Portfolio continues to heat up debate on various investment bulletin boards around the web. I spent a little time yesterday reading the comments on a couple of boards, it was almost a running commentary as the share price continued to fall, ending the day a little under 6p, just about half its price of 3 days ago as bulls and bears of the stock slugged it out.

What came across however, was the almost despair of those that were invested in the stock or who had topped up as the price fell. They were catching the proverbial falling knife on a regular basis, only to see it go down further as more sellers came in.

A company RNS was issued on Thursday night regarding the 30%+ fall that happened on that day. it was meant to put a line under events - it didn't.

The Company is aware of recent press speculation regarding the equity swap and an active short position in relation to the Company's ordinary shares. In light of this, the Board wishes to clarify that further to its recently reported record results, the Company has a strong balance sheet and continues to trade profitably with significant traction in the insurance sector.

The Company knows of no valid reason for the recent share price decline. Furthermore, the equity swap asset, which has also been subject to speculation, accounts for a small part of the Group receivables and is not a material contract in relation to the size of the Group.  This was issued as part of the funding for the acquisition of Accident Advice Helpline, announced on 3 December 2012 and was deemed to be the least dilutive funding mechanism at this time. It is not currently being exercised, and the Company believes that the counterparty will continue to not make any material transactions in respect of the Company's ordinary shares unless the share price is at substantially higher levels.

http://www.digitallook.com/news/rns/20886456-2564291/QPP-Clarification_regarding_press_speculation_html

Sell in May? Stock market myth or reality?

When it comes to the stock market, the old adage Sell In May return on St Ledger's Day seems to be one of those beliefs that has stuck around and stood the test of time, at least in terms that many seem to take it for granted that it is true. It appears to be like one of those sayings in life that no one ever questions, investors and traders will often refer to the old "sell in May" without ever having looked into whether it is backed up by hard data.

How did the saying come about?

The origins of the phrase date from the time when the City was full of toffs who became more preoccupied with the social whirl in the summer – the Chelsea flower show, Wimbledon, Royal Henley, Royal Ascot, the Epsom Derby, Cowes (not necessarily in that order) , and finally the St Leger classic at Doncaster – than earning money in the stock market.

http://www.proactiveinvestors.co.uk/companies/news/56550/sell-in-may-regret-by-september--56550.html

So, to some degree the idea of selling in May and being out of the market for 3-4 months as a good strategy appears to be based on the notion that the market heavyweights are away during that time. In other words, most of those with money in the city are too busy on holiday spending it to be bothered with market matters. A little simplistic maybe, but that appears to be the general gist of the argument.

What does the data say?

Datastream provide historical financial data to the City and they have come up with a number of interesting truths about "Sell in May"when applied to the UK.

• In the 21 years prior to Big Bang 1986, the FTSE All Share index was higher by mid September in 15 of those years.
• In 1974 it would have worked well as the market fell 41.6% between May and September.
• In 1975 however, you would have missed out on a 107.4% increase between May and September.
• In just 14 of the 47 years since 1966 has the market been lower by mid September than in May.

http://www.proactiveinvestors.co.uk/companies/news/56550/sell-in-may-regret-by-september--56550.html

Evidence seems to suggest that when it comes to selling in May, anyone taking the advice is more likely to miss out on potential gains. If you are waiting for a market correction you have about a 1 in 3 chance that the market will be lower come September than now and the chances are that even if it is it's not likely to be at a crash level lower.

Perhaps this year will be different? After all, the market has had a pretty good run for the last 6 months without any significant correction. Also, the market might need a pause as we head into the end of year, which traditionally has been good for shares as we finish with the Santa rally. At some stage we are likely to see a correction, but data would suggest that we shouldn't count on the old "Sell in May" to provide it and maybe it is something that we should just forget about and ignore like an old wive's tale.

Quindell Portfolio - Incredibly cheap or crash and burn?

Yesterday AIM company Quindell Portfolio announced annual results that you might be forgiven for thinking would set the pulses racing, especially as, at least on paper and at first glance, the fundamentals and future prospects of the company seem to look great. 

Quindell Portfolio´s 2012 revenues and pre-tax profits were 10 times higher than the previous year as the company focused on earnings enhancing acquisitions.

The group, which provides expertise in software, consultancy and technology enabled outsourcing to insurance and telecommunications sectors, reported revenue of £137.6m, a 904% increase compared to £13.7m a year earlier.

Pre-tax profit rose 915% to £41.2m from £41.2m and earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 681% to £52.2m from £6.7m.

During the year, the company kept its emphasis on organic growth and profitable acquisitions in legal, health and claims.

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=2564291&action=news&story_id=20879086

Prior to the announcement the share had been falling slightly, but upon the news it almost fell off a cliff, or at least a small one, from around 13p yesterday to a little under 11p today.

Quindell is one of those penny share type companies that seems to have a huge loyal following if comments on many BB's are anything to go by. However, even though its share price is in the penny share league, it does actually have a market cap of around £440 million, although that seems to fluctuate wildly with every 10% this way or that way move.

Reading on those BB's also suggested that bear raider Evil Knievil, Simon Cawkwell has also bet against it. If so, he has taken on the company itself which seems to be betting the other way. The Times reported that the company itself has £13.3 million in CFD long bets on its books, which some may think is not the way shareholders money should be used, while others might think it shows faith by the management in the company's future. For the moment at least, Quindell is probably losing big time on that bet (Note - read on a BB that this had now been closed although others question this).

What type of trader/investor are you?

It's fair to say that there are many different ways of trading and investing in the markets. Often, stereotypical images emerge to describe a trader, usually someone who is a day trader or very active. This is perhaps why trading is often seen as gambling as focus is placed on short term, fast gains, but it is often overlooked that there are many different ways to trade, over different time frames and using different methods of trading, it's up to each individual to find what works best for them.

Another false image that often emerges, especially between traders and investors themselves, is the idea that you are either a fundamentalist or a technical trader. True, many do simply concentrate on one as against the other. Chartists will tell you that all you need to know about a share is already in the charts, while fundamentalists will focus on things like value, growth, valuation momentum, etc. There is a tendency that never the twain shall meet and often one side will attack the other, Chartists are seen as the equivalent of tea leaf readers, while fundamentalists, because they might never look at a chart may often just buy because they think something is cheap on valuation, although the charts might show them that the company is in a nasty downtrend, if only they would bother to look.

As a trader/investor I've often wondered where I fit in all this as the system that I've developed tends to mix both fundamental and technical analysis. For example, I won't buy a share unless certain tick boxes are ticked when it comes to fundamentals. Occasionally, especially with "blue sky" growth opportunities, I will take a punt on the technology winning through, but even here I try to avoid one trick pony companies who basically will go bust if their one trick doesn't pay off.

William Hill gallops into the FTSE100

The pending merger between Xstrata and Glencore has left a space for a new entrant to the FTSE100 and William Hill after some pretty impressive momentum in the last 6-9 months sneaked up to take it on the line. Trouble is, it is another momentum stock with stretched fundamentals now joining the 100. A year or so ago it had an impressive dividend yield of over 4% which is now around 2.5%.

Meanwhile, Ladbrokes has raided William Hill to fill a position where they are playing catch up with their FTSE100 rival.

British bookmaker Ladbrokes has hired Jim Mullen from William Hill to run its online operations as it tries to make up lost ground on its larger rival in the sector.

Ladbrokes' attempts to galvanise its digital business are borrowing heavily from the success enjoyed by market leader William Hill, which entered the FTSE 100 index of leading companies on Wednesday.

Mullen will have the title of director, digital when he starts work in November, Ladbrokes said on Wednesday. He worked as chief operating officer at William Hill's online operations.

Ladbrokes has formed a partnership with software developer Playtech to develop its online business, a fast expanding part of the gambling market. The companies launched a digital marketing services operation on Wednesday, to be based in the Israeli city of Tel Aviv.

http://au.news.yahoo.com/technology/news/article/-/16967171/ladbrokes-recruits-william-hill-man-to-run-digital-unit/