After the heady rises so far in 2013, share prices took something of an summer break in August. The FTSE100 was the worst performer – down 3.1% (but still up 8.7% YTD) as macro factors, like ‘will we, won’t we take reprisals against Syria?', spooked investors. Tech markets were more resilient with NASDAQ down just 1% (but up 19% YTD) and the UK’s Techmark down only 0.7% (up 16% YTD). The best performing sector was Mobile Telecomms – up 4.35% entirely because Vodafone soars on possible Verizon stake sale. This would be the biggest corporate deal involving a UK company ever and would prove a bonanza for shareholders – and all those advisers lucky enough to get a share of the mega fees involved.
The FTSE Support Services Index fell 2.2% (but is still up 18% YTD). On the one hand it was buoyed by a 19.7% rise at Robert Walters (See Robert Walters trounces Hays on UK growth) and a 16.1% rise at Harvey Nash (See Harvey Nash pedals harder to boost cash). There really are signs that the UK recruitment market is picking up – which is excellent. We have long regarded that part of the market as a good barometer. But these were more than offset by a 12.7% slump at Serco as it was faced with very serious fraud allegations which might put future HMGovt contracts in jeopardy. See Serco CEO ‘saddened and appalled by latest allegation”. Capita bagged the MOJ’s £400 prisoner tagging contract after incumbents GS4 and Serco were forced to withdraw because of earlier allegations. But this and other good contract wins (search on Capita in the archives) could not avoid an ‘in sympathy’ 8.6% slump in Capita’s share price this month.
The FTSE SCS index – which most closely follows the UK SITS companies that we report upon in Hotviews – fell by 1.8% (but still up 19% YTD).
After reporting last month that “2 ergo fell 47% to 1.6p. Not surprising given the MXC Capital backed 1p share placing. See 2 ergo directors…err gone!”, I can report that they put it all back on this month with a 58% rise to 2.6p. But if I reported on penny share performance each month I’d be forever reporting on INVU (up 60% at 0.6p) and Triad (up 45% at 11.9p) which is why I don’t.
Quindell was up 48% this month (more of a recovery actually) as it reported H1 numbers in line with expectations. See Quindell reports some numbers. Mind you that gave rise to our Mr Miller being quoted in The Times saying “I've long since given up making head nor tail of Quindell". Quite!
As a shareholder from their 2004 IPO @ 50p all that time ago, I was really pleased to see Sanderson’s 21% share price rise this month. At 58p, after nearly 10 years I am‘in the money’ although I probably would still have been better off in a Building Society! This was on the back of increased confidence as illustrated with their purchase of Catan Marketing for £644K – See Sanderson builds out in ecommerce.
At the other end of the scale, EMIS fell 14%. See EMIS expands into ophthalmology software. In it we declared our concerns about EMIS’ profitability – clearly the market shared that concern.
On the global scene, Salesforce.com put on 12%. See Salesforce – still places to go. That’s what happens when you’re the leading SaaS player even though you report Q2 increased losses and cost increases exceeding revenue growth. No, I don’t understand it either!
Facebook was up another 11% at $41.3 this month. They have doubled in the last couple of months and are now well ahead of the fateful $38 IPO price. See my post Wake up to Facebook in the UK. Their Q2 results were exemplary and I am really impressed with how they have come to grips with mobile advertising.
Conversely, HP took a major 12.7% hit to its share price this month after reporting Q3 revenues down and outlook revised. We met with HP’s UK top management a month back and really felt HP had turned the corner. Much more confidence and direction. HP, like several other ‘old-timers’ in the market are considered as ‘old friends’ too. You don’t like it when they get sick! We sincerely hoped they were on the road to recovery but not so sure now…