The FTSE fell 0.6% last month, but these shares did much better.
Welcome to autumn. For all the bluster and feeling of despair, during the month of August 2010, the FTSE 100 only fell 0.6%. Was it just me, or did it feel like the market fell further?
Perhaps we can blame it on the Americans. Over there, they had the biggest August slump since 2001, losing 4.7% in the month. It's a case of good old British austerity beating American debt… maybe.
Feeling nervous?
Still, markets remain nervous. Ben Critchley of IG Index was quoted on Bloomberg as saying "While there is a sense that equities have a serious dose of pessimism priced in, it will take a jolt of unambiguously strong data to help markets make significant gains."
So should we expect more of the same? Markets moving up, markets moving down, but ultimately markets not moving far at all, in the shorter term? Let us know in the comments boxes below.
Stars amidst the dross
As ever, there were some shares which had a truly excellent month. If you'd bought these five shares at the beginning of August, you'd be feeling rather pleased with yourself. Obviously a one-month time period is too short a space of time to measure investing success, but shareholders in these five companies won't be complaining!
As usual, here I generally try to highlight companies of interest rather than necessarily the biggest risers on the month, while seeing if any still look good value and could build on their gains in the months and years to come.
The shares you should have bought
| Company | Share
price | One
month
gain |
|---|
| Eco Animal Health Group (LSE: EAH) | 160p | 37% |
| Hardy Oil & Gas (LSE: HDY) | 235p | 42% |
| TT Electronics (LSE: TTG) | 130p | 18% |
| Trinity Mirror (LSE: TNI) | 110p | 10% |
| Wolfson Microelectronics (LSE: WLF) | 204p | 18% |
So why did the companies listed above move so much in just a one-month period?
Every Dog Has Its Day
ECO Animal Health Group describes itself as a leader in the development, registration and marketing of pharmaceutical products for global animal health markets. Translated, their products promote well-being in animals.
In August, the company reported a strong start for the current year, achieving a 15% improvement in revenues, and an earnings jump of 36% in the year ended March 2010.
House broker Cenkos Securities is forecasting strong earnings growth in the coming 2 years, also saying "…it will represent an attractive takeover target for an international pharma group." The market is currently buying the growth and buying the takeover story. Watch this space.
It's A Gas
Hardy Oil and Gas is a small cap oil and gas exploration company with assets predominantly in India. Just yesterday, the company announced its fourth successive gas discovery, saying the "Krishna Godavari Basin is an emerging world class basin for India. Further exploration drilling is planned in this area and we look forward to continuing to participate in unlocking of the basin's exceptional energy potential."
As ever with exploration companies, you pay your money and you take your chances, but based on its share price performance over the past 30 days, the market is warming to Hardy's chances. Check out the Fool's popular Oil & Gas Companies discussion board for the low-down.
Back From The Dead
TT Electronics designs, manufactures and sells electrical components for the defence, aerospace, medical, automotive and other industrial electronics markets.
In August, the company resumed dividend payments earlier than it expected, and boosted its full-year earnings guidance after saying demand was returning to its main sensors and secure power markets. The company has been through some tough times during the recession, with the share price bottoming at 20p in early 2009. In comparison, things are definitely looking up these days. Momentum is definitely on their side.
Happy Shareholders, Unhappy Journalists
Speaking of back from the dead, Trinity Mirror's shares also slumped as low as 20p in 2009, but now trade at the positively dizzy level of 110p. At the end of July, the company behind the Daily Mirror, Sunday Mirror and Sunday People newspapers said advertising revenues in its national newspaper division rose 2.2%, but profits soared over 60% on the back of some deep cost-cutting.
Trinity Mirror's shares trade on a forecast P/E of just 4. Either it's the bargain of the century, or the newspaper business is in a state of permanent decline, or both. Buyer beware.
Yet Another Recovery Candidate
Finally, Wolfson Microelectronics, the semiconductor company whose products can be found in mobile phones, portable media players, headsets, portable navigation devices, handheld game consoles and digital cameras, recently reported another loss, but predicted a return to profit later this year when new products are launched.
Mike Hickey, chief executive officer of Wolfson, said: "Looking ahead, we expect the previously reported design-ins, responsible for the strong sequential growth in Q2, to continue to translate into sales and support the strong backlog we see for both Q3 and Q4."
If the company can return to its former glories, days when it generated 20%+ operating margins, look out above. Still, in this moribund global economy, that feat will be easier said than done.
June's Big Winners, Winning Some More
The last time I did one of these reviews was back in June. Here is the share price performance of the 5 shares you should have bought in June.
| Company | Share price
1 Jul 2010 | Share Price
31 Aug 2010 | Change |
|---|
| FTSE 100 | 4,806 | 5,225 | 8.7% |
| Nautical Petroleum (LSE: NPE) | 170p | 155p | (8.8%) |
| Scott Wilson (LSE: SWG) | 266p | 289p | 8.6% |
| Andor Technology (LSE: AND) | 257p | 312.5p | 21.6% |
| Blinkx (LSE: BLNX) | 37p | 74p | 100% |
| ASOS (LSE: ASC) | 860p | 952.5p | 10.6% |
Four out of five winners, including one company doubling in share price. Not a bad start, hey? Obviously, I wouldn't expect anyone to construct a portfolio out of shares that have previously done well over such a short period of time, but there has always been a case for past winners also being future winners. We'll find out more next month.
Got on any views on the prospects for these shares? Then let us know in the comment boxes below...
More on the economy and the markets:
> For two weeks in September we will be opening the doors of our Champion Shares PRO newsletter service. In order to keep our exclusivity, only a select number of our readership will be able to join us. This is your chance to guarantee your place! Click here to join the priority waiting list.
> Sadly, Bruce Jackson doesn't have an interest in any of the companies mentioned in this article.
