With small caps continuing to outperform it is little wonder that Shares readers are keen to find out more about the market’s minnows. The below chart says it all. We're eager to help answer any questions you have about the market, so please feel free to email us ([email protected]), send a tweet or write a good old fashioned letter (Shares, Thames House, 18 Park Street, London SE1 9ER).
One reader notes how, despite the strong performance, many small companies still trade on lowly valuations. Another flags the related issue of Level 2, which can be an important tool when dealing in illiquid shares. We're happy to look at such issues and will publish our responses on the Shares website and feature the best ones in the printed magazine each week. They often trigger ideas for longer articles, so we're keen to hear what's on your mind as an investor.
I thought 23 January magazine was great and featured some really interesting and relevant shares. Would you be willing to write a feature on illiquid shares? There are a lot of illiquid shares out there that represent genuine value. Empresaria (EMR) being an example where the chairman bought over £1 million of stock or Reach4entertainment Enterprises (R4E) or Stadium (SDM) or Litebulb (LBB) or Hangar 8 (HGR8). These shares are mostly on lowly single digit price/earnings ratios but they aren't as 'high' risk as their multiple implies if you look at balance sheets and current trading. A list of interesting small cap illiquid shares would appeal to your readers in my view. Especially me! Like a pig searching for truffles!
Simon Greig, via email
Shares says: Please see the table below listing the smallest five constituents of the FTSE Aim All-Share index. Note the wide bid/offer spreads, which means it is always worth seeing if your broker can improve on the price they offer. Other readers with an appetite for risk have expressed interest in lesser-traded shares in the past, so we will be examining the small caps space and the issue of spreads in more detail in March when a feature planned in Shares.
I have recently subscribed to your Level 2 service. But I would like to know more how to read it. I would appreciate it if you ran a feature in Shares about Level 2, this would be a goldmine for me
Terry Paphitis, via email
Shares says: Those who have access to Level 2 will be able to interrogate the market to check whether your broker is offering a fair price. Your broker should be able to match the ‘yellow strip’, as can be seen on the below image. We'll consider Level 2 as a potential feature in the near future.