BOWLING

Welcome to this month’s “Bowls” update.

INTRODUCTION

I am now flagging this introduction as for “new readers” only, those who have read previous articles or are familiar with my view on “Bowls” can now skip this section.

I have been looking for and often investing in “Bowls” for over 3 years or so now.

They’re a concept I picked up from Richard Crow who, as I continue developing, still discuss Bowls with on a weekly basis – Richard runs his own Substack here.

For me a Bowl is a basic charting pattern which often occurs when a stock has fallen and could be bottoming. It usually has 3 main characteristics I look for…

• The rate the stock was declining slowed, indicating “Sellers almost done?”

• The stock put in no lower lows, indicating “More Buyers than Sellers?”

• The stock starts gradually rising, indicating “Buyers paying up?”

Hard to explain, even with a diagram, but here’s one anyway…

Bowls are a charting pattern and like most charting patterns, are often in the Eye of the Beholder - As can be seen by comparing my list with Richard’s recent post above.

Bowls are often “recovery” plays so to accompany any good looking Bowl I also like to see at least one of the following, preferably both…

• Management changes, a new CEO in the last year or two, it takes them a while to get going!  Not so significant but also worth checking for a new COO and/or CFO too.

• Management buying, decent sized purchases within the past 12 months by, preferably, two or three Board members, certainly no selling except partials to cover option taxation.

Bowls (recovery play opportunities) seem to be best reflected in 3 year line charts.  This kind of makes sense, most companies don’t decline overnight and likewise, most of them take a year or two, sometimes longer, to recover, or show signs of recovery.

For these reasons, a Bowl can be spotted over a period of a few months or over a period of 18 months or even more.

Anyway, I usually use 3 year line charts when scrolling through “Companies In My Universe” to look for Bowls as I’ve found over time, it’s what works best for me.

COMPANIES IN MY UNIVERSE

I don’t look at all UK companies for Bowls, I limit my criteria to those with a Market Cap >£50m and <£1bn.  I also avoid those in the “Residential & Commercial REITs”, “Collective Instruments” or “Holding Companies” Industry groups.

Just my personal choice, and this leaves me with around 500 “Companies In My Universe”.

THIS MONTHS BOWLS

In StockRank (from Stockopedia) Order…

SUMMARY

Sorry I have rushed through this as I ran out of time, sorting myself for travels to Mello tomorrow.

The most interesting “bowls” in my opinion are FEVR, TUNE, CHH, KIST and ITM.

Remember I may hold all, some, or none, of the stocks mentioned in this article.

No investment advice intended, for information only, Do Your Own Research - Look out for that change in management and management buying of shares!

Until next time!

(hope to see many of you at Mello tomorrow and the day after)

Jon