SIF Portfolio: Will Oxford Instruments make big gains from nanotechnology?

Tuesday, Feb 12 2019 by
15
SIF Portfolio Will Oxford Instruments make big gains from nanotechnology

The market sell-off during the second part of last year has created some attractive value investing opportunities, in my view.

But the majority of these stocks don’t qualify for my Stock in Focus (SIF) screen, because they have lagged the wider market. As a result, they have a 1-year relative strength (RS 1y) below zero and fail one of my screening rules.

Only one stock qualifies for the SIF screen at the time of writing. But if suspend the RS 1y rule, then the screen returns 14 stocks. I’m not going to do this, for reasons I explained a couple of weeks ago.

Instead, I’m going to continue buying shares from the relaxed version of my SIF screen, which allows for a slightly more elevated valuation while still maintaining my positive momentum requirements.

As a side note, I wonder if the tide may soon turn for the market. The wider market is nearly back in positive territory on a one-year view, as measured by my FTSE All Share benchmark:

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Perhaps the number of stocks qualifying for my SIF rules will soon start to improve. We’ll see.

Measuring atoms with Oxford Instruments

This week I’m going to be looking at high technology tools specialist Oxford Instruments (LON:OXIG). This engineering group started life as a spin-out from Oxford University and has been listed since 1983. It’s now is knocking on the door of the FTSE 250 again, after staging a gradual recovery from poor trading in recent years.

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Oxford Instruments describes itself as a provider of “high technology tools and systems … which can fabricate, analyse and manipulate matter at the atomic and molecular level”. The company is active in a wide range of sectors including healthcare, energy, chemicals and aerospace engineering. You can read more about its products on the group’s website here.

Today, I’m interested in finding out if this business is the kind of affordable, growing business I want for the SIF Folio. The company’s Stockopedia profile is of a High Flyer. This generally signifies a stock with strong quality and momentum, but poor value.

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Although High Flyer is one of the styles that are statistically more likely to…

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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. ?>


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Oxford Instruments plc is a provider of technology tools and systems for industry and research. The Company operates through two segments: Nanotechnology Tools and Service. The Nanotechnology Tools segment offers technology products serving research customers in both the public and private sectors. The Service segment contains the Company's service, rental and refurbished asset sales business. Its NanoAnalysis business delivers solutions and services that enable materials characterization and sample manipulation at the nano scale. Its products are used on electron microscopes and ion-beam systems in academic institutions and industrial applications, including semi-conductors, renewable energy, mining, metallurgy and forensics. Its products include AZtecOne and X-Max Extreme detector, among others. more »

LSE Price
1014p
Change
1.4%
Mkt Cap (£m)
573.8
P/E (fwd)
15.4
Yield (fwd)
1.4



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


4 Comments on this Article show/hide all

Stuart Bates Wed 3:19am 1 of 4
1

Thanks Roland.

Really appreciate the SIF column.

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covkid Wed 8:28am 2 of 4

Me too.

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Roland Head Wed 2:09pm 3 of 4

In reply to post #446703

Thanks Stuart. It's a very interesting project for me and I enjoy sharing it each week. Having to write up my thoughts for public consumption is also a good way of testing the logic of my thinking!

Regards, Roland

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Benson 11:36am 4 of 4

I held this share a few years ago and did well selling when they started to falter which was more luck than judgement ( I needed some money!)

I followed the share through its lean patch and started to reinvest as the price seemed to start to stabilize.
I found in reading your analysis of this share that there were things that I always do take into account in looking at shares and other things, eg is the pe correct?, as being important things that I should look at
Thank you for the lesson "Proffessor"

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About Roland Head

Roland Head

I'm a private investor and writer on stock markets, with a particular fondness for free cash flow, dividends and value. I also have a lingering interest in commodity stocks. In earlier life, I worked as an engineer in telecoms and IT. The rules-based approach required for this kind of work undoubtedly influenced my investing style. I also learned a lot from seeing the tech bubble deflate in 2000-1, when I was working for a large and now defunct Canadian firm.  My investment focus is increasingly on developing rules-based strategies such as my Stock in Focus portfolio. This reflects a significant part of my personal portfolio and is the subject of my weekly column here at Stockopedia. more »

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