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Why it can pay to not follow the herd when looking for stock or fund ideas
Thursday 10 Nov 2016 Author: Daniel Coatsworth

It is hard being an investor, isn’t it? Two major themes this year have been political uncertainty destabilising markets and asset valuations either very expensive or cheap for a reason. Those themes remain in play.

At the time of writing, the US elections were drawing to a close and a potential delay to starting Brexit had seen renewed volatility in sterling.

Compounding the problem has been the difficulty of finding good companies in which to make an investment at a fair price.

We have a solution

But fear not. One of the reasons for reading Shares digital magazine each week – and our website every day – is to cut through the noise of the market. Our goal is to help you spot opportunities that the rest of the market hasn’t yet picked up on.

There are a few really interesting stocks in this week’s edition. Independent Oil & Gas’ (IOG:AIM) broker FinnCap believes the share price could rise by more than 600% over the next 12 months. We explain why in the Smaller Companies section of the magazine.

I’ve written an article on RM2 (RM2:AIM) which has the right ingredients to stage a comeback after a string of problems. It is very high risk, but most of the market has long given up on the stock which means you can pick up shares cheaply at the moment.

I’m also interested by the fact there isn’t a single ‘buy’ rating on WM Morrison Supermarkets (MRW) from the analyst community. There are 10 ‘hold’ ratings and nine ‘sell’ ratings according to Bloomberg data. That suggests no-one is willing to stick their neck out and make a brave call on the supermarket’s recovery potential.

We don’t sit on the fence. Morrison’s is a cracking ‘buy’, in our view. You should read James Crux’s article in the Larger Companies section to discover why he is bullish on the stock.

Go against the flow

The best investors can be the ones with confidence to make conviction calls on stocks, even in the face of opposing market views.

If everyone loved a certain company, the share price would be bid up and it would have a rich valuation. Yet the best time to buy is often when other parts of the market aren’t really interested. That’s why you will often see us take contrarian views.

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