Trading U.K stock market using Mark Minervini strategy

Friday, Dec 14 2018 by
61

Mark has been interviewed by Stocko a couple of times and from some of the comments on various threads there appears to be a few of us using his methods to trade the U.K stock market. I thought it would be useful to have a dedicated thread where we can discuss how well its working.

Personally I have been in cash at least 50% since the end of May and at 95-100% since early October. Getting out of stocks as they roll over has protected me from any real damage.

I'm struggling to find many setups I want to buy so I am developing my "sit out power"

How is everyone else doing?


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Disclaimer:  

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. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. 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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802 Posts on this Thread show/hide all

mmarkkj777 11th Mar 363 of 802
1

In reply to post #456698

Hi Peter,

Sorry, my mistake. They dont have debt, but they are losing at lot of money. As revenue grows, the losses get bigger. Its not abnormal for a young tech company to make losses in the beginning, but they are widening and if they get paid in advance, they must have to keep winning new business on an increasingly bigger scale. As I mentioned, I held for about 19 months, but in three stints. I had an 8% trailing stop loss and when I got stopped out I simply bought back in again when the rise resumed. The last time I got stopped out was mid september and I havn't bought back in since.

I would never say never, but they look scary to me at the moment. In my tech stocks, I have smartsheet and Five9, so not much room at the moment anyway.

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peterclothier 11th Mar 364 of 802

Smartsheet and FiveN have done v well, well done.

I am out of Blue Prism (LON:PRSM) currently. My first leg was 300-430 area, then 475-850 ish (v good VCP), then got rather timid higher up but had some smaller legs.

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unwise2 12th Mar 365 of 802
1

AJ Bell (LON:AJB) has set up a decent looking base, but a forecast P/E of 41.6 vs EPS growth of 17-26% looks steep. Q1 trading update showed customer numbers growing 19% year on year.

Hargreaves Lansdown (LON:HL.) reached a high P/E back in Sept before falling back.

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ISAallowance 12th Mar 366 of 802
1

5c87955e1ec06Chart-batenburg-techniek-nv

Not UK, but £BATEN looks like it's pivoting on volume today, I've managed to take a position on IG as a CFD.  Spread was surprisingly reasonable at 0.44%.  Putting my stop quite tight at 42.5.


EDIT: Should have done more research, appears that this may be a compulsory take-private at E46, so more merger arbitrage than swing trading!  Sorry for the noise!

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ricky65 12th Mar 367 of 802

In reply to post #456983

hehe I've done that before. Looks like a promising breakout and then you look at the news and notice that it's just a takeover!

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Howard Adams 13th Mar 368 of 802
1

Hi

For those interested, I have run my MM screen for the first time in quite a few days.

My screen incorporates 25 tests - momentum, earnings, volume, RS, growth and so on.

I get no hits in UK at present, but two in US and one in Switzerland pass all 25 tests.

The two US are $CDNS (this is ticked CDN on HL) - Cadence Design Systems Inc, and $NOVT - Novanta Inc.

The Switzerland is £NESN - Nestle SA.

These might interest you.

Obviously these incur FX effects and FX translation charges depending on your platform.

I bought starter positions in all three.As in addition to the stocks meeting MM tests (my interpretations) the three offer a nice diversification bundle - Software, machinery & food & drink.

I have done no further research on these other than the quant tests, but I am quite aware of £NESN and what it does.

Regards
Howard

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herbie47 13th Mar 369 of 802
2

In reply to post #457518

Hi Howard, had a look at those 3 you mention.

CDNS - looks quite extended now, think Minervini would have been buying around $47-52, I will wait for a pullback.

$NOVT - looks better, Minervini would have bought around $82?

NESN - looks ok but is there enough growth? But is a good defensive share to hold.

Quite a few shares on my Minervini screens but some I have missed the boat such as Greggs (LON:GRG). Kainos (LON:KNOS) is one I'm considering buying at the moment. James Fisher and Sons (LON:FSJ) does not quite qualify, but may buy if it pulls back a bit more.

Switching to Europe shares TNOM still qualifies on my screen and is still going up, I sold out too early around 24 Euros. MIPS looks like it is breaking out, delayed reaction to some excellent 4Q results last month?

Re IPOs, Minervini seems to have a different attitude to many on Stockopedia, maybe US IPOs are different from UK ones? I bought some shares in YETI last week, which was an IPO in Oct 2018, even Stockopedia likes it which is unusual for a new listing.

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peterclothier 14th Mar 370 of 802

In reply to post #454373

Gulf Keystone Petroleum (LON:GKP) has had a rocket under it with decent volume

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herbie47 14th Mar 371 of 802

A.G.Barr (LON:BAG) could be worth watching, cup has formed.

But growth is low and EPS forecasts not increasing.

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unwise2 14th Mar 372 of 802

In reply to post #457518

My screen incorporates 25 tests - momentum, earnings, volume, RS, growth and so on.

When I first started building and using the stock screener I used numerous rules, after a few months I noticed I was missing several stocks that had built bases and broken out. I then loosened my criteria which meant I was looking at more charts but missing less trading opportunities.

"keeping it simple will serve you better than using a complicated model. You must be careful not to put too much into each screen. Otherwise, you may inadvertently eliminate good candidates"

MM's first book page 38-39.

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herbie47 15th Mar 373 of 802

In reply to post #457963

Yes I agree, my screens has picked up a few decent shares such as Ab Dynamics (LON:ABDP), Greggs (LON:GRG), Kainos (LON:KNOS) but has missed quite a few others such as Auto Trader (LON:AUTO), AVEVA (LON:AVV), Britvic (LON:BVIC), James Fisher and Sons (LON:FSJ), Halma (LON:HLMA), Marshalls (LON:MSLH), there may be valid reasons for excluding some of them, the main reason of non selection is because the % 3m EPS Upgrade FY1 > 5 rule so I may drop this. I'm looking at charts far more now. Just excluding that rule my selection went up from 11 to 39. Diageo (LON:DGE), Auto Trader (LON:AUTO), Bioventix (LON:BVXP), £3IN, Qinetiq (LON:QQ.) Marshalls (LON:MSLH), Gamma Communications (LON:GAMA), 4imprint (LON:FOUR), James Fisher and Sons (LON:FSJ) and among the new qualifiers.

I'm surprised Howard only has 2 US shares on his screen, I'm finding quite a few shares there although I don't have the US region on my Stockopedia subscription.

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Howard Adams 15th Mar 374 of 802

In reply to post #457573

Hi Herbie

Thanks for the response.

Yes an earlier entry into $CDNS would have been better but I did not run my screen for a while so missed that, so your point about it being extended (possibly) is useful. I'll keep a close eye. The same comment applies to $NOVT.

NESN, you are absolutely right growth is too low. Not sure why I felt so keen on it other than diversification into non-UK stock for a more defensive play. Must have lacked concentration at that time.

I managed to find Greggs (LON:GRG) Kainos (LON:KNOS) & James Fisher and Sons (LON:FSJ) and have made some gains from them thankfully.

Testing the TNOM MIPS and $YETI you mention, TNOM gets 24/25, MIPS 23/25 and $YETI 21/25. I will look at these in more detail, so thank you for these. ($YETI's lower score reflects its infancy as a listing.)

Regards
Howard

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Howard Adams 15th Mar 375 of 802

In reply to post #457798

Hi Herbie

Yes, A.G.Barr (LON:BAG) is just beginning to align towards my MM screen (I get 16 of 25 of my tests and several missed ones are likely to pass if momentum continues), but it still has a ways to go.

The main reservation I have with it (I've looked at it several times) is its EPS Growth.

For me, whilst it could be a nice holding I would allocate an investment to a stronger candidate.

Regards
Howard

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Howard Adams 15th Mar 376 of 802

In reply to post #457963

Hi unwise2

Thanks for the suggestion and MM reference.

I concur with your point and MM's guidance.

I do use other more broadbrush screens in order to narrow down options before testing against my more comprehensive MM screen.

Also, I suppress tests in my MM screen in order to find stocks which fit some but not all of the tests. So, in effect I do as you suggest, and utilise a simpler screen.

With regard to my more complex MM screener, commonly my EPS Growth tests often exclude good stock options as does my volume test. So by suppressing these I often pick up stocks for further examination.

But what I do find useful with having the more comprehensive MM screener is that if I have competing investment options the 25 tests help me to see quite clearly which might be the better option.

Thank you for initiating this thread I read it avidly and follow up on lots of the suggestions.

Regards
Howard

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Howard Adams 15th Mar 377 of 802

In reply to post #458253

Hi Herbie

Thanks for your list.

I hold ten of the ones you list.

I will check out AVEVA (LON:AVV) Diageo (LON:DGE) Qinetiq (LON:QQ.) now, so thanks for those. At first glance Diageo (LON:DGE) looks strongest (23 of 25). Qinetiq (LON:QQ.) and AVEVA (LON:AVV) slightly weaker both 21 of 25.

Qinetiq (LON:QQ.) EPS Growth weaker and also recent momentum less robust.

AVEVA (LON:AVV) looks promising and I have held it in the past.

With regard to your question as to why I have so few US shares passing my MM screen, its because as unwise2 points out in an earlier post that my MM screen is too comprehensive. I have responded to his point which I concur with. But my stringent screen is a useful tool which I manipulate by suppressing certain tests as well as using other screens.

But that said, two more US stocks have now passed, $HEI.A Heico, and $SPNS Sapiens International NV, which you might want to examine. I have not looked at them yet.

PS I just bought AVEVA (LON:AVV) and Diageo (LON:DGE) so thanks for those.

Regards
Howard

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unwise2 15th Mar 378 of 802

In reply to post #458343

Thank you for initiating this thread I read it avidly and follow up on lots of the suggestions.

Glad you like it and that it's useful.

 I do find useful with having the more comprehensive MM screener is that if I have competing investment options the 25 tests help me to see quite clearly which might be the better option.

You might already do this but I hope once you have a shortlist you check the companies RNS's to check EPS historic figures versus what is listed on Stocko. Also forecasts can be very wrong, I made substantial gains on GAW when brokers were forecasting weak growth.


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Howard Adams 15th Mar 379 of 802

In reply to post #458353

Hi unwise2

With reference to your useful advice.

'You might already do this but I hope once you have a shortlist you check the companies RNS's to check EPS historic figures versus what is listed on Stocko. Also forecasts can be very wrong, I made substantial gains on GAW when brokers were forecasting weak growth.'

I do this a bit but not nearly enough I fear. I will enhance my pre-buy procedures to add this in. That said, I am not wholly guided by pure quants and do in addition dig into stock reports as well as the qual side of the businesses.

Thanks for the heads up.

Regards
Howard

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Glorenfeld 15th Mar 380 of 802

Augean (LON:AUG) has just broken out if a high tight flag/power play. Still got the tax issue in play, but chart trumps all when it comes to power play, right?

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unwise2 15th Mar 381 of 802

In reply to post #458438

You would have to stretch the rules to make it a power play as it has taken well over three (or 5 depending on where you measure 50p) months to double. The recent pullback is tight though. Personally I haven't traded Augean (LON:AUG) because of the risk of the tax issue potentially causing a large gap down unexpectedly.

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unwise2 18th Mar 382 of 802
1

5c8f6e9d92057Chart-d4t4-solutions-182201

D4T4 broke out of a classic looking VCP on Friday with more than double average (50d) volume and is having another good day.

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