Good morning! I hope you enjoyed the Bank Holiday as best the weather permitted.

It's interesting to note that the US market (the S&P 500) hit a new all-time high yesterday. People keep saying that the market is overvalued, but it still wants to go up whenever there's a correction. From my point of view, small & mid caps overheated in the spring, but have now corrected considerably, and I'm starting to see some pockets of reasonable value emerge again. We've also seen strong recoveries in some small caps shares in the last fortnight, so that usually pulls in buyers to the stocks that haven't yet recovered.

As ever, I remain focussed on the fundamental value of the companies I'm invested in, and to a large extent the short term price movements are just background noise. I think most transactions in small cap shares are done by people who don't have a clue about how the company is performing - they're just buying & selling on short term market sentiment. So if they sell below fundamental value, then that creates a buying opportunity for me!

So overall, I'm feeling considerably more bullish than I was a few weeks ago, because the market has done what it should do - i.e. scrubbed off many excessive valuations, which should clear the way for renewed upward moves in sensibly-priced companies which report good earnings & outlook statements.

Bioquell (LON:BQE)

Share price: 88.5p
No. shares: 42.43m
Market Cap: £37.6m

I've been watching this company for a couple of years now, but held back buying any shares because it never quite reached an attractively cheap valuation, and the newsflow has been rather negative - so it seemed to be a company that had a lot of potential, but wasn't executing well.

Interim results to 30 Jun 2014 are out this morning, and look weak to me, although the company had previously flagged that H1 would be weak, therefore the share price has only moved down 2p this morning, on what looks like just a single trade of 5,000 shares.

Profitability - at the operating profit level, has dropped to a loss of £78k in H1 this year, versus a £1.0m profit in last year's H1. The company has two divisions, and as you can see from the extract from today's accounts below, its TRaC division is trading quite well (flat against last year at…

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