Good morning! The futures are indicating a modestly upwards open for the FTSE 100, up 15 at 6,569. Howewer if you look at the small caps index (see 3-year chart below), it's absolutely gone bananas in the last year, so my overriding sense is that this is a time to be extremely careful, and not over-pay for things just because they keep going up. I think there are many small to mid caps on very stretched valuations now, and personally I will not budge on my value criteria. Many over-bought shares just look like accidents waiting to happen, in my opinion. Hence why I think it makes sense to be sitting on some cash right now, as you cannot buy the dips unless you have some cash to hand. It doesn't really matter that you don't earn a return on cash, that's not the point. It's all about protecting capital.
Creston (LON:CRE 105p) is a share that I've spoken mainly positively about before, and it issues an IMS this morning, covering trading in their Q1 from Apr-Jun 2013. It starts off with a negative (which tends to set the tone), saying that revenue is 5% lower than last year, "as expected". If it was expected to have a soft Q1, then it seems odd that they didn't say so in the last outlook statement issued on 12 Jun. So this might cause slight jitters amongst investors today?
However, there might be enough positive news in the IMS to counter-act that. In particular I like this comment, which is a further pointer towards an economic recovery (my bolding):
Don Elgie, Group Chief Executive of Creston plc, said, "The IPA Bellwether Report on client sentiment towards increased marketing spend is the most encouraging for six years. At Creston we are seeing this being borne out by high levels of new business activity and while opportunities must always be converted, the level of pitching we are seeing is the highest I can remember. Based on our historic pitch to win ratio, we are confident that this will lead to further underlying growth in our client base."
Overall then it sounds like Creston have had a fairly slow start to the year, but expect to make it…
