The FTSE 100 was broadly flat on Wednesday as traders digested the latest set of UK inflation and a plethora of corporate updates.
UK CPI inflation jumped again in April and served as a reminder that the period of higher inflation endured in the wake of the pandemic is not yet over.
April’s reading of 3.5% was almost one full percent higher than March’s 2.6% figure and surpassed economist estimates of 3.3%.
While the jump in inflation is certainly a headline grabber, it wouldn’t have come as much of a surprise to markets. The impact of higher energy bills was well telegraphed, demonstrated by economists’ forecasts going into the release of the data of inflation rising to 3.3%.
“We should always take April’s data with a pinch of salt, but higher inflation leaves the Bank of England happy to carry on at its relatively sedate pace of cutting once per quarter. This uptick in CPI has been on the cards and well discounted already,” said Neil Wilson, Investor Strategist at Saxo UK.
The higher-than-expected reading sent the pound higher against the dollar and weighed on the FTSE 100 in early trade.
However, London’s leading index shook off the impact of higher inflation and recovered early losses as the morning progressed to trade relatively flat at the time of writing.
The FTSE 100’s resilience was on display again as it shook off a number of disappointing earnings updates, including a warning of the impact of the M&S cyber attack and JD Sports outlining plans for slower growth amid challenging trading conditions. M&S shares fell 0.8% while JD Sports was the FTSE 100’s top faller with losses of 6% on the session.
There was strength in Severn Trent and SSE, which helped offset losses elsewhere.
“Utilities did their best to prop up the UK stock market and they were helped by defence contractors once again being in vogue,” says Russ Mould, investment director at AJ Bell.
“Updates from Severn Trent and SSE were well received by the market. The utilities sector has found itself the centre of attention in recent months as investors look to avoid the drama associated with a global trade war and seek solace in defensive areas.
“Water company Severn Trent might lack the go-go growth associated with big name US tech stocks, but it is delivering the kind of performance many businesses can only dream of. Profits and dividends are going up, it is creating new jobs, and demand for its services is unaffected by any fluctuations in the economy.”
The threat of higher inflation and interest rates staying higher for a longer period was inevitably felt by the housebuilders. Barratt Redrow shares were down 2%.
There was interest in defence-related stocks amid disappointment at the progress in Russian ceasefire talks. BAE Systems added 2% and Rolls Royce rose a little over 1%.
This morning’s Interim Results announcement from Avon Technologies (LON:AVON) reported a 16.8% increase in group revenues to $148.7m ($127.1m), while pushing its adjusted pre-tax profits up an impressive 70.1% to $14.8m ($8.8m), with its earnings 76.4% higher at 38.8c (22.3c) per share, with only a small 5.6% increase in its interim dividend to 7.6c (7.2c).
The £528m-capitalised group is a world leader in protective equipment, trusted to protect the world's militaries and first responders, with a reputation for innovative design, high quality, and specialist materials expertise.
In...
We’ve all been there. Picked some great stocks with conviction. Run our winners. Been delighted with the gains. Only to see those gains drain away.
It hurts, it’s galling and you are left wondering where you went wrong.
Worse than that, by the time it happens you may have started counting on those gains as part of your future planning. How are you going to pay for that big ticket item – that home purchase, a children’s education, or that early retirement. It’s very real.
In this piece, I’ll introduce the three mistakes we can all make, and the three solutions.
But first, a personal tale…
(NB – If you’re curious how to build a smarter, rules-based portfolio, join me for a live webinar on Thursday 22nd May at 5pm (BST) – and read on to learn more).
An early education
For me, my big lesson came in the global financial crisis. I was young enough to be reckless, but old enough to have known better.
I had a silly amount of my capital riding on two big picks. Both were AIM listed stocks. One was called Renesola (SOLA) – a solar energy company that was absolutely smashing it on sales growth. The other was RC Group (RCG) – a biometrics company. I’m sure some of you remember these stocks.
I’d bought really well. And I’d bought more as they rose. At their peak, I had 50% of my portfolio in RCG, and probably 30% in SOLA. They really were motoring – they had both already tripled. I couldn’t have been more confident.
It was 2007… what could possibly have gone wrong?
The mistakes we all make
There’s an eye-opening academic research paper by Barber and Odean titled “The Behaviour of Individual Investors”. When I first read it I was gobsmacked. It was a mirror of every mistake I’d ever made, and hugely influential in shaping my future mindset.
I’ve thought long and hard about their findings, and grouped them into three themes:
1. We suffer “perverse stock selection”
That quoted phrase is their words. We often pick risky stocks for the wrong reasons.
We often talk about the perils of story stocks at Stockopedia.com. Stories are how the human mind makes sense of the world, but projecting a hollywood ending onto a share is not rational.
Whether we’re chasing headlines, themes we know a lot about or jumping on a bandwagon so not to miss out. We seem to have a “taste for stocks with lottery-like payoffs”.
But lottery tickets have negative returns!
2. We underdiversify
We buy a share and get to know the theme. The price goes in the right direction, and we buy more. We buy another benefiting from the same theme.
One highlight from the paper showed that “on average investors hold only four stocks” which tend to be “highly correlated” – i.e. too few stocks in too few sectors.
I ended up in 2007 with a portfolio 80% in Chinese AIM stocks. Hindsight is wonderful isn’t it.
3. We buy and sell recklessly
We’re human. We’re prone to want to do something. This action bias might have helped when we were chased by lions, but in volatile markets it’s an extremely expensive tendency.
It’s so easy to buy and sell these days. A trade is just a thumb press away. But ease of trading does not a disciplined investor make. 20% of investors turn over their portfolio almost three times per year – which is not only hugely costly in terms of transaction and tax costs, but can’t be good for mental health.
Beyond this, we’re terribly prone to hanging onto our losers, and snatching at profits. And even worse, we tend to pull all our capital out of the market at lows, and reinvest at highs.
The 3D framework that solves for these
I’m sure we can all recognise some of these behaviours in our own habits. But as John Templeton once said “If you want to have a better performance than the crowd, you must do something differently from the crowd”.
So in this vein, I propose three dimensions of intelligent investing that can guarantee you invest contrary to the three mistakes that almost all investors make.
Invest in stocks exposed to proven Return Drivers.
The simple solution to “perverse stock selection”.
Buy good (quality), inexpensive (value), rising (momentum) shares.
These kinds of shares are highlighted by the Stockopedia StockRanks – which score every share for their quality, value and momentum. These kinds of shares are remarkably ignored by the crowd, but have consistently outperformed over the last decade.
Ensure you have enough Diversity in your portfolio construction.
In ten years of tracking portfolios the highest probability shares, only 7% are likely to double in a single year. So we don’t diversify just to reduce risk, we diversify to maximise our chance of owning a big winner. These are the stocks that can make a real difference to your portfolio.
Own at least 14 stocks to give yourself a better chance of holding a multibagger.
Own stocks across at least 6 (out of 10) sectors, and make sure you own both cyclicals and defensives. Think of your portfolio like a football team – you need strikers and defenders. And be careful going all-in on a favourite theme – we are not so smart!
Avoid huge positions. Start with equal weights.
Pre-commit to buy and sell Discipline.
Have a plan for every share purchase – a plan actively helps you avoid reactive over-trading and snatching at profits. This includes having a sell plan. Whether that sell plan is based on time (e.g. after a one year holding period – to accrue gains), thresholds (e.g. when value is realised, or the StockRank falls below a certain level), or events (e.g. selling immediately on a profit warning).
Only hold for the long term the highest quality securities. Be extremely wary of just holding because you’ve grown familiar with the story. The numbers must back it up. As Jim Slater would say – “be first in the line of disappointed enthusiasts” if something goes wrong.
Don’t hang onto your losers – have a bias to selling them (using a stop loss, or after a fixed time), or average down (but only if you have genuine insight – which you probably don’t). Doing nothing creates opportunity cost, and can turn a small loss into a big one.
The consistent application of simple rules is extraordinarily powerful. As Van K Tharp once said:
If you don’t have rules, everything you do is a mistake.
Putting the rules to work
At Stockopedia, we’ve run a portfolio based on these principles for a decade. It’s an equal weighted 20 stock portfolio, populated with the highest quality, value and momentum stocks, refreshed once per year. There’s no stock picking. It’s a simple rules-based approach that works.
Known as the “NAPS” Portfolio – as it’s a “no admin portfolio system” – the portfolio has beaten every single fund manager in the UK over the decade to 2025.
To learn more about putting these ideas to work in your own investing, or to learn about how the NAPS Portfolio works – join us for a live session this Thursday 22nd May at 5pm – “The Smarter Way to Build a Market-Beating Share Portfolio” – or catch up on the replay if you miss the date.
A higher-than-expected UK CPI inflation reading of 3.5% sent the pound higher against the dollar on Wednesday as heating bills drove average prices up.
“Inflation is back with a bang: like an unwanted house guest, breaking down the door, emptying the fridge and bleeding you dry,” said Sarah Coles, head of personal finance, Hargreaves Lansdown.
“The spike in prices is the biggest we’ve seen since the cost-of-living crisis, and even larger than had been forecast.”
Economists had predicted CPI would rise to 3.3% in April from 2.6% March. The bigger-than-expected jump will bring into question whether the Bank of England has scope to cut interest rates further after reducing rates by 25bps at their last meeting.
Core inflation rose to 3.8% from 3.4% in March.
“The jump in inflation in April was always on the cards due to the rise in energy bills, but it has exceeded forecasts – marking the highest rate in over a year. It underlines the fact that the path back to target inflation is far from straightforward,” said Myron Jobson, Senior Personal Finance Analyst, interactive investor.
“Core inflation, which strips out volatile food and fuel prices to provide a clearer picture of the underlying trend, has also edged higher, raising questions over whether this could slow the Bank of England’s interest rate cutting cycle. That remains to be seen. What’s clear is that the need to turbocharge economic growth – particularly amid growing uncertainty stemming from Trump’s tariff war – remains a key priority.”
Taylor Wimpey and Barratt Redrow shares are a screaming 'buys' with one key financial ratio underscoring the deep value available to long-term investors.
The UK housing market has had a tough time during the period of rising inflation and higher interest rates. The impact on housebuilders is well-documented.
However, the challenging conditions have created opportunities in the sector. None more pronounced than shares in FTSE 100-listed Taylor Wimpey and Barratt Redrow.
There are various macro influences on TW and BTRW shares, but there is one metric investors should have at the front of their...
Chain manufacturer Renold (LON: RNO) has received two bid offers one is 77p/share in cash from Webster Industries and the other is 81p/share in cash from a consortium comprising Buckthorn Partners LLP and One Equity Partners IX, L.P. The share price jumped 40.5% to 76.7p.
Telecoms testing equipment supplier Calnex Solutions (LON: CLX) returned to profit in the year to March 2025 as revenues recovered from £16.3m to £18.4m. New product launches helped, as did greater focus on newer markets such as defence and cloud computing. There was a strong fourth quarter and net cash has improved from £10.9m at the end of March 2025. The order book has increased, and Cavendish forecasts an improvement in pre-tax profit from £700,000 to £800,000 this year. That is still well below peak profitability. The share price is 9% higher at 54.5p.
Medical imaging technology company Ixico (LON: IXI) grew interim revenues 26% to £3.2m. The loss reduced. Cash was £5m at the end of March 2025. The order book is £13.1m. Cavendish believes that Ixico can beat its full year revenues forecast of £6m. The share price increased 8.33% to 45.5p.
EKF Diagnostics (LON: EKF) says it is benefiting from its rationalisation process, and this has helped to offset tariffs and unfavourable exchange rates in the US. The pipeline for contract manufacturing and fermentation is improving. Hematology remains the focus of growth. Cash was £15.7m on 9 May and it should grow year-on-year. The share price improved 7% to 26.75p.
Metals One (LON: MET1) has staked 99 additional claims at the Swales god property in Nevada. The phase one exploration programme will be expanded. There will be detailed geological mapping, surface sampling and evaluation of historic workings. The share price rose 3.79% to 40.9975p.
FALLERS
X-ray imaging technology developer Image Scan (LON: IGE) was hit by delays in a defence contract in the first half and revenues slumped from £1.1m to £350,000 and the loss increased to £420,000. Zeus no longer expects a profit this year after reducing its revenues forecast by 37% to £2.2m. The share price slumped 21.2% to 1.3p.
Drug developer Poolbeg Pharma (LON: POLB) is raising £4m at 2.5p/share and could raise up to £100,000 from a retail offer. The cash will last into 2027. It will be spent on th POLB 001 phase 2a trial to “prevent cancer immunotherapy-induced Cytokine Release Syndrome, a severe, potentially life-threatening side effect of cancer immunotherapies”. Topline data is expected by the end of 2026. An Oral GLP-1 proof of concept trial for an obesity treatment. The share price dipped 8.77% to 2.6p.
Alien Metals (LON: UFO) has completed the joint venture transaction with Errawarra Resources, which is changing its name to West Coast Silver. This covers the Elizabeth Hill silver project in Western Australia. Alien Metals retains a 30% stake and does not have to contribute cash until a decision to mine. The share price slipped 7.89% to 0.0875p.
Fintel (LON: FNTL) confirmed at its AGM that it is trading in line with expectations. The provider of services to financial businesses has completed the acquisition of RSMR and gained six new customers after the launch of Matrix360 in the general insurance market. The share price slipped 3.97% to 278.5p.
The FTSE 100 started Tuesday’s session on the front foot as geopolitics provided a welcome source of optimism, and a turnaround in US equities overnight following the downgrade of the US credit rating also helped inject some life into European stocks.
Although the S&P 500 only closed 5 points higher yesterday, it had started the session deep in the red and recovered over 1% of losses, helping boost sentiment as the European session got underway.
London’s leading index was 0.5% higher at the time of writing.
The FTSE 100 has gained more than 1,000 points since the post-Trump tariffs lows and is now closing in on all-time record highs at 8,871.
“Renewed hopes for a ceasefire between Ukraine and Russia, combined with another wave of stimulus for China’s economy has provided optimism in early trading,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“The FTSE 100 and European indices have opened higher as geopolitical tensions look set to ease. Following a call with Putin, President Trump was bullish about negotiations for a ceasefire between Ukraine and Russia starting immediately.”
Diploma was by far the FTSE 100’s best performer as the industrials and life sciences group reported a bumper jump in profits.
“Among the big winners in London was Diploma, the supplier of specialised technical products and services. It announced a big increase in first-half profit, raised its growth forecast for the current financial year, and sounded a bullish tone about the longer term,” explained AJ Bell investment director Russ Mould.
“This provided some reassurance to investors that the company can deliver, even against an uncertain and tricky economic backcloth.”
Diploma shares were 15% higher at the time of writing.
Smiths Group was the second top riser with a 4% gain after a trading update revealed sales accelerated 10% in its fiscal third quarter.
Antofagasta was the top faller as investors banked recent profits in the copper miner.
Kingfisher’s peers recently surprised the market with remarkably strong trading updates that reflected improved sales driven by strong demand.
Although Kingfisher’s peers achieved higher sales largely as a result of better weather during the period, the sector has rallied on hopes of a turnaround after a very disappointing 2024.
Kingfisher shares are now trading near the best levels of the year ahead of the release of their Q1 trading update due 28 May.
However, HSBC analysts believe that Kingfisher could still have some legs in them with a number of factors favouring the DIY specialist in ...
The last three weeks, since the feature article on Monday 28th April, have seen an excellent rise in the share price of the Christie Group (LON:CTG), rising from 85p to the current 138p – a 62% increase in such a short period.
But the question now has to be – is it time to take profits or just sit tight and wait for more to come?
My feature article on the company that day centred upon the company having shown a recovery in 2024 – with revenues up 15.4% at £60.4m helping to swing the business out of its £0.5m loss to a profit of £1.0m for the year to end-December.
The Business...
Greggs shares jumped on Tuesday after the sausage roll specialist reported improved trading performance in the first 20 weeks of 2025, with total sales increasing by 7.4% to £784 million compared to £730 million in the same period last year.
The high street baker saw like-for-like sales in company-managed shops grow by 2.9%, with performance strengthening during the latter part of the period. The company noted that “better trading conditions” had supported this improved trend.
A stabilisation in costs will be welcomed by investors. Greggs was built on its affordable sausage rolls and steak bakes, and high inflation has threatened its ability to maintain low prices. The company said it sees no change in cost inflation after many periods of rising prices.
In recent years, Greggs has been focused on product innovation, and the results were evident in today’s update.
The firm’s over-ice drinks range, now available in 1,300 shops, is performing well following the introduction of two new flavours: Peach Iced Tea and Mint Lemonade. Pizza boxes continue to see strong demand, whilst the newly launched Mac and Cheese has gained viral popularity on TikTok.
The company’s made-to-order range, which includes chicken burgers, wraps and fish finger sandwiches, has now been rolled out to over 300 shops nationwide after an initial trial last year.
Shop Estate Expansion
Greggs remains active in expanding its retail footprint, opening 66 new shops during the period, including 15 with franchise partners and four new Drive-Thrus – one of which marks the company’s first in Northern Ireland, located in Craigavon.
The firm closed 46 shops in the same period, including 21 relocations, bringing its total estate to 2,638 shops as of 17 May. This comprises 2,077 company-managed shops and 561 franchised units.
Shop closures have been first-half weighted in 2025, but with a strong pipeline, Greggs maintains confidence in achieving its target of 140 to 150 net openings for the full year.
Supply Chain Development
Construction of Greggs’ new frozen product manufacturing and logistics facility in Derby, along with its National Distribution Centre in Kettering, is progressing “at pace”. The sites are expected to become operational in 2026 and 2027 respectively, in line with planned timescales and budget.
Outlook Unchanged
Despite delivering improved like-for-like sales in what it describes as “a challenging market context”, Greggs has maintained its full-year guidance. The company expects cost inflation to remain around 6% on a like-for-like basis.
The Board’s expectations for full-year outcomes remain unchanged, with the company noting that its plans for managing inflationary headwinds are “progressing well”.
Greggs shares were down 28% on the year before trading got underway today. The 6% jump in Greggs shares in early trade reflects price stabilisation and a softening in concerns that the price of a sausage roll and other baked goods were becoming too expensive for Greggs’ core customer base.
