Last checked at 21 Mar 2024 09:31
BlackRock Throgmorton - Flash note from QuotedData
21st March 2024
Throgmorton's fuse is lit
In yesterday's BlackRock Throgmorton (THRG) annual general meeting, manager Dan Whitestone outlined the significant potential for a surge in UK equities, with small and mid-caps outperforming large caps by a sizeable margin, as the macroeconomic outlook in the UK improves.
Dan highlighted that UK companies' share prices have become increasingly detached from their earnings potential. A combination of political uncertainty thanks to the forthcoming elections, sticky interest rates, strength in overseas stock markets (in particular in a handful of big AI-related US tech names), and consistent outflows of investments in UK-focused funds has weighed on valuations.
Dan believes that the UK small and mid-cap sector is at one of its most attractive entry points in recent memory, based on current share prices. We observe that Dan is not alone in this view, with the UK market being subject to elevated levels of takeover activity.
Despite this backdrop, Dan has still been able to demonstrate the merits of good stock picking, having generated strong long-term out outperformance versus his peers and benchmark.
THRG's board has substantially increased its share buyback activity. Nonetheless, THRG's discount remains at a historically wide level and may offer investors an attractive way to capitalise on a possible near-term bounce in UK companies.
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