A Month in Review: June 2018

This month saw over 1,300 new stock tips and broker ratings captured and performance-tracked on the Stockomendation platform, across 22 unique brokers and 36 individual tipsters. Tip activity in June was almost exactly the same as May, and represents an increase of 51% on the number of tips tracked during the same period last year.

Interestingly, brokers were more positive over the last month in comparison to May, whereas tipster sentiment declined substantially over the same period. The percentage of all broker tips signalling a ‘buy’ rating in June (70.1%) increased from May (65.1%) while ‘sell’ ratings decreased from 6.0% to 4.7%. Particularly high levels of broker sentiment are noted in Manufacturing, IT Services, Tobacco and Construction.

In contrast, while ‘buy’ ratings accounted for 69.3% of all tipster tips in May, that figure declined to 60.0% in June. Tipsters therefore appear less bullish about the prospect of LSE-listed firms on the whole, driven by an influx of ‘sell’ activity in Retail, IT Services and IT Hardware. The IT Services sector has proven particularly divisive amongst tipsters and brokers; whereas brokers have been issuing buy ratings towards firms such as Iomart and Playtech, tipsters have been particularly negative towards Tern following an incredible period during which the firm’s share price rose more than 1,100% in just over ten weeks. So far, tipsters appear to have made the best calls in the sector this month, with tipsters’ average tip performance (+11.0%) far beyond that of brokers (-2.22%).

As can be seen from the chart below, brokers and tipsters focussed heavily on almost identical industries this month; with the Support, Retail, Tourism & Leisure and Media featuring in the top five most frequently-tipped sectors for both. This contrasts with our observations in May, when only two sectors appeared in the top five for both (Retail and Tourism & Leisure).

Brokers switched focus from primarily Tourism & Leisure in May, to Support in June. Pharma & Biotech drew a great deal more scrutiny from brokers than tipsters this month (49 tips), but less so than it did amongst brokers in the preceding month (71 tips in May). Sentiment remained bullish in the sector among brokers, with ‘buy’ ratings accounting for 71.4% of the total tip count, compared to 56.3% in May.

The Support sector attracted the most Broker attention in June

...whereas the Mining Sector received the most tips from Tipsters

Tipsters were most active in the Mining sector this month, while Support declined from the most frequently tipped sector in May, to the fourth most popular sector in June. The scrutiny in the mining sector, however, was accompanied by a downgrade in tipster outlook. Whereas 100% of all Mining tips in May attracted a ‘Buy’ rating, that figure dropped to 78.8% this month.

Though Health Care companies went largely unnoticed by brokers this month (2 tips), the average recommendation performance was the highest amongst all sectors (+21.1%), driven by Stockdale Securities ‘buy’ rating on Aortech International achieving performance of 38.3% so far. Brokers also performed well in the Defence (+4.10% from 9 tips) sector, while high sentiment in the Tobacco sector was accompanied by impressive performance (+3.01% from 7 tips). On the other end of the scale, broker performance in the Household Goods (-7.81% from 29 tips) was particularly poor this month.

Aside from IT Services, tipsters’ average tip performance was strongest in the Alternative Investments (+17.1% from 2 tips) and Real Estate (+14.6% from 3 tips) sectors. Though Mining proved to be the most popular sector amongst tipsters this month, average tip performance in this sector was particularly poor, with average tip performance of -12.08% (from 33 tips), driven predominantly by recent a price decline in the heavily-tipped KEFI Minerals and a surge in the price of Greatland Gold shares, which had recently been tipped as a ‘sell’.

Finally, the most-frequently tipped companies differed greatly between tipsters and brokers this month. Just Eat attracted the highest number of broker ratings (12), ahead of AstraZeneca (9) and Polar Capital Holdings (8). Tipsters instead focussed most heavily on BT Group (9 tips), Tern (6) and Ariana Resources (5).

Here at Stockomendation, we’re constantly investing new ways to identify the leading brokers and tipsters for you to follow in each sector, and for each company. Watch this space for upcoming features enabling you to do this, and much more. The current platform allows you to performance-track over 37,000 stock tips, and see which companies and sectors are currently trending on your ‘Dashboard’. Sign up now and take a look for yourself – it’s FREE!

Disclaimer: The contents of this article should not be considered financial advice. All information correct as at 28th June 2018. June aggregated data incorporates all tips made between 1st June 2018 and 28th June 2018. Price and performance data correct as at 28th June 2018.