In September 2023, I wrote a follow-up to my Midcap Madness article called Small Cap Silliness. The theory was that outflows from the UK markets that had made many midcap stocks look good value would extend to smaller companies. Again, I used a screen with some very simple value criteria, but this time, I focused on the market cap range between £30m and £300m.
The other criteria were:
Price-Earnings Ratio Forecast 1y < 10
I wanted companies that are forecast to remain cheap.
Dividend Yield Rolling 1yr > 5%
While this wasn't designed to be an income screen, a large dividend yield is a sign of companies where the price has declined, but the company retains its dividend payout. This may indicate that management believes the company's future is not as bad as the market has priced.
Stockopedia QV Rank > 70
This was a sense check that I was getting stocks with reasonable Quality and Value.
Industry Group excludes "Collective Investments"
I wanted to look for trading businesses, so I excluded funds and fund-like stocks.
The original screen had 28 results, and I picked ten stocks that I thought had interesting value characteristics at the time.
Were they just too cheap?
Here's the performance of the full list of 28 stocks:
Price at: |
13/9/23 |
3/2/25 |
Price Return |
AA4 |
46.41 |
62.89 |
35.5% |
ALU |
162.5 |
282.5 |
73.8% |
ARBB |
955 |
905 |
-5.2% |
BILN |
350 |
480.2 |
37.2% |
BRCK |
46.5 |
56.02 |
20.5% |
DUKE |
33 |
28.95 |
-12.3% |
ECEL |
111 |
145 |
30.6% |
EPWN |
69 |
90.1 |
30.6% |
HAT |
406 |
339 |
-16.5% |
IPF |
124.5 |
128 |
2.8% |
JIM |
117.5 |
46.45 |
-60.5% |
KGH |
88 |
118.47 |
34.6% |
NXR |
149 |
232 |
55.7% |
PAF |
14 |
40.2 |
187.1% |
PPHC |
130.5 |
134 |
2.7% |
RCH |
73.5 |
85.9 |
16.9% |
SDY |
34.9 |
20.22 |
-42.1% |
SFR | …
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