Searching for new 52 Week Highs amongst Value Stocks

Tuesday, Jul 16 2013 by
5
Searching for new 52 Week Highs amongst Value Stocks

Despite the market volatility of recent months, the FTSE is up by around 11% so far this year, helping to propel a handful of shares towards their 52-week highs. Financial newspapers and websites the world over regularly publish lists of shares that are hitting their one-year highs and lows, but these nuggets of information are much more useful than they may at first seem. 

In momentum circles it’s widely thought that investors in companies trading close to their 52-week highs will use that price as a reference point to judge the significance of any news from these companies. Even on good news, they can be reluctant to bid up the price even further because of this so-called ‘anchoring’ effect. But eventually the full impact of the news can’t be denied by the market and the share price rises anyway – and it’s here that momentum investors can profit. These findings were central to a study by George and Hwang, who found that buying stocks that were at a 52-week high was a highly profitable strategy. 

Stockopedia’s 52 Week High Momentum Screen has produced an impressive 31.9% return over the past year, beating the FTSE benchmark by 15.6%. It’s  performance has been driven by gains at the likes of mother and baby products retailer Mothercare (LON:MTC) and housebuilder M J Gleeson (LON:GLE) . 

 

In a twist on conventional momentum strategies however, research has also found that by combining momentum with value screening, investors can profit even more by taking advantage of the negative correlation between the two – ie. when one component does well the other may not. So to try and find a happy balance of 52-week highs that still rank strongly in the market as potential value opportunities, we had a look at the stocks meeting both criteria in the UK and Europe. 

By its nature, the 52-Week High screen is highly sensitive and can see regular changes to the list of qualifying shares. Nevertheless, as of last Friday, among the UK quoted companies on the screen was insurance brokerage Brightside (LON:BRT), which has seen its shares rise by nearly 15% to 27p since the start of July. With a Stockopedia ValueRank of 84…

Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way

Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


Do you like this Post?
Yes
No
5 thumbs up
0 thumbs down
Share this post with friends




Pendragon PLC is an automotive online retailer. The Company's principal market activities are the retailing of used and new vehicles and the service and repair of vehicles (aftersales). Its segments are Stratstone, which consists of its vehicles, truck and commercial vans brand, including the sale of new and used motor cars, motorbikes, trucks and vans, together with associated aftersales activities; Evans Halshaw, which consists of its volume brand, including the sale of new and used motor vehicles and commercial vans; US Motor Group, which consists of its retail operations in California in the United States, including the sale of new and used motor cars; Pinewood, which consists of its activities as a dealer management systems provider; Leasing, which consists of its contract hire and leasing activities; Quickco, which consists of its wholesale parts distribution businesses, and Central, which represents its head office function and includes all central activities. more »

LSE Price
10.9p
Change
4.4%
Mkt Cap (£m)
152.3
P/E (fwd)
11.0
Yield (fwd)
10.8

Mears Group PLC is a United Kingdom-based holding company. The Company's principal activities are the provision of a range of outsourced services to the public and private sectors. The Company operates through two segments, which include Housing and Care. The Housing segment is engaged in providing a full housing management service predominantly to Local Authorities and other Registered Social Landlords. The Care segment provides personal care services to people in their own homes. The Company's Housing segment repairs and maintains over 700,000 of approximately five million Social Homes in the United Kingdom. It provides personal care to over 30,000 elderly and disabled people. The Company serves customers, including local authorities, charities, tenants and service users, community groups, private landlords', elderly people and others. Its subsidiaries include Mears Limited, Scion Technical Services Limited, Morrison Facilities Services Limited and others. more »

LSE Price
275p
Change
2.6%
Mkt Cap (£m)
303.8
P/E (fwd)
8.4
Yield (fwd)
5.0



  Is LON:BRT fundamentally strong or weak? Find out More »


Please subscribe to submit a comment




About Ben Hobson

Ben Hobson

Stockopedia writer, editor, researcher and interviewer!

Follow



Stock Picking Tutorial Centre



Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis