Good morning! I was watching CNBC last night and was struck by how upbeat people seem in America, with the markets there hitting new all time highs. This seems a complete contrast to small caps in the UK, where a mood of nervousness and gloom seems to have hit investors, with some big corrections in the prices of many UK small caps having been in evidence in the last two months.
The chart below demonstrates what a sharp divergence there has been between the FTSE 100 IDX (FTSE:UKX) and FTSE AIM ALL SHR (FTSE:AXX) in the last two months;
Sorry that the SMXX and AXX lines are so feint, I can't see any way to alter them - I'll raise a Stockopedia support ticket, and ask them to darken & thicken comparison lines, to make them more legible.
If you're not able to see the lines, the chart above shows that (rebased to the same level as FTSE 100), that the AIM All Share Index has fallen from a peak of about 6,800 in early March, to just 6,100 now. Whilst over that same period the FTSE 100 dipped to 6,500, and has since come back to about 6,850.
Why do I mention this? Because it makes me more inclined to use the current dip to buy good quality small caps - i.e. we're not seeing a general market downturn, just that pockets of over-valued shares in the small caps area are being corrected. That might well throw up some bargains, where people have become nervous and sold things that they shouldn't have.
PuriCore (LON:PURI)
There was a bizarre price movement in this small cap yesterday, which I hold. There was no news from the company, yet the price was suddenly slammed down about 25% for no apparent reason. Later in the day a trade for 1m shares printed at 25p (a huge discount to the opening price of about 40p).
From enquiries I made, this seems to have been a clumsy seller dumping 1m shares with Peel Hunt, who then were happy to offload the stock for a nice profit at around 32p during the day. Most of…
