Bullish investors have driven up the FTSE 250 by around 19% so far this year but increasingly expensive stocks and fears that a pullback could be on the horizon are still nagging issues. With that in mind we’ve been looking for shares in defensive sectors that have been attracting high levels of broker upgrades recently to try and find interesting opportunities at the quieter end of the market. 

Defensives like healthcare, utilities and food and drink makers and retailers, can be comparatively dull performers in strong market conditions. Generally, what they give up in explosive upside they often give back by being steadfast performers regardless of the business or economic cycle. But looking for those that have recently achieved high percentage EPS upgrades by analysts tends to uncover shares that are either fast moving or undergoing an operational or financial transition. 

The usefulness of analyst upgrades (so loved by the Smart Money column) is that they can not only signal a change in outlook but they can also be a trigger of price momentum. Upgrades often take months to be priced-in by the market and often recur in stepwise fashion, giving investors the chance to ride the wave of a positive change in sentiment as others take their time to acknowledge the full implications. 

Over the past month, EPS forecasts for the next financial year at Premier Foods (LON:PFD) have been ratcheted up by 6.5% following a confident set of half-year results. Premier, which owns brands like Oxo, Hovis and Sharwoods, appointed ex-Cable & Wireless boss Gavin Darby as CEO in February this year and since then he’s been trying to simplify what had become a rather complicated business. Trading profits in the half-year were up by 50% to £47.7m but ongoing restructuring costs and high levels of debt are still a millstone on the balance sheet. Analysts tend to agree that a substantial equity raising is likely at some point in order to tackle the group’s high leverage and pension scheme liabilities. Even so, its shares have rallied by 42% in July (see chart) and full-year financial expectations have been raised – could this be the turnaround? 

AIM quoted veterinary services group CVS (LON:CVSG) makes the list with 1-month EPS…

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