Last week, I wrote about using the 52-week low screen to find stocks that might be due for a bounce. While many UK small-cap shares have been strong performers over the past three months, the recovery has not been universal. Sometimes this is because the company has released bad news, such as a profits warning. However, in many cases, it is simply because the stock has been overlooked by investors, resulting in a low valuation compared to its peers. This may provide an opportunity if such stocks eventually get their day in the sun. The screen I created had few hits, so I relaxed the criteria a little and ended up with 25 companies that look superficially interesting and hence go into the top of my funnel:
A screen update
Running the screen this week only gives 21 results. What has happened is that a few, mainly commodity stocks, have bounced and are no longer within 20% of their 52-week lows (ARC Minerals (LON:ARCM) FIH (LON:FIH) Kodal Minerals (LON:KOD) Pharos Energy (LON:PHAR) Central Asia Metals (LON:CAML) Henry Boot (LON:BOOT) Syncona (LON:SYNC) ). However, these have been joined by two stocks, (BILN and Somero Enterprises (LON:SOM)) . While the 20% I chose is largely arbitrary, it goes to show that often all this is needed for cheap stocks like these to bounce is a change in sentiment rather than any groundbreaking deal or positive trading statement. Here is the updated list of 21 in order of their proximity to their 52-week lows:
Over the next two weeks, I'll go through the list in an attempt to narrow the field down to the stocks that will make it onto my watchlist. This week, I'll take a look at Recruiters, Household Goods and Property companies. Next week, I'll look at Industrials, Extractive Industries, and anything else.
Recruiters
It may not be surprising that four companies on this list are in the recruiting sector. Here is the summary of the head-to-head for these:
Robert Walters (LON:RWA)
This has been considered one of the highest-quality recruiters in the past. Yet that hasn't stopped the share price from…
