📈 2 stocks I'm watching

I was at the F1 Arcade in St. Paul’s last week talking to a man who previously worked for Blackrock.

He was asking what my edge was and how I’ve been able to make a living trading.

The truth?

I don’t do anything complex, nor do I have any real edge, or secret.

At my retreat, we did two live trading sessions where I shared my screen to a big screen for the room to see and used only ShareScope and Research Tree and some phone calls to trade.

No social media, no newspapers, no bulletin boards.

Just the RNS, some research, and a speed dial to the dealing desk.

Attendees could hear me call my broker and see my prints show up in the market as proof.

Thankfully, they weren’t complete disasters (that would’ve been a bit embarrassing!) and I made profits in real time.

One person said to me: “Seeing you do it showed that you don’t do anything hidden, and it’s a simple process but you need the knowledge to do it”.

That pretty much sums it up.

I make decisions based on various data points, following a system, and using some discretion at the end.

No fancy models, no convoluted calculations, just a process that needs to be repeated.

If you want to extract P&L from the market on a regular basis, then you need to stay on top of your market and know it better than most people.

It takes time, it’s not get rich quick (sadly), and you have to be focused on the next 100 trades.

One trade is variance. 100 trades is data.

And if I had to start from £0 again - here’s how I’d get to my first £100k.

Applied Nutrition (APN)

As always, everything I write and say is my own personal opinion only. It is NOT financial advice.

I don’t accept money from listed companies to talk about them unlike other market commentators, so whilst this is independent nothing is a stock recommendation to buy or sell.

These are ideas only, and whilst I try to be balanced, sometimes I will be wrong.

Applied Nutrition is a recent IPO and a successful one too.

The price now is higher than the price of the IPO, and this is something I love to see.

We need British businesses listing on the London Stock Exchange.

It should be seen as something aspirational.

We should welcome these businesses rather than drive them overseas.

The company is a sports and active nutrition brand which formulates and creates nutrition supplements for both professional athletes and fitness enthusiasts, as well as people looking to better their overall health.

Here’s the chart since IPO.

We can see it looked like a classic IPO sell off but the stock has rallied and put out an ahead statement, that FY25 will be ahead of expectations.

This has triggered a decent move and put the stock towards all-time highs.

Upgrades usually follow upgrades, as no analyst wants to forecast earnings that the company might miss.

Better to be right and say the company did even better than I thought it would, than take any risk and try to guess the true earnings.

What I like about the stock is that despite the move, it hasn’t given much back.

That tells me the stock is well bid and current holders are seeing any stock they offload get good prices.

If this base continues to be build, it also means I can place a tighter stop on the trade which drives the risk/reward expansion.

Think about it.. if I can risk 10p then I only need to make 20p/30p for a reward of 2 and 3 to 1 of risk.

Whereas if my stop is 20p, then for the same ratio I need to be aiming for 40p and 60p.

What do you think is more achievable?

Now I’m not saying place stops tight for the sake of them being tight.

But when you can and the chart offers the chance, tighter stops drive the profit potential profit.

Revenues are ahead of expectations, as well as cash.

But I notice management didn’t say that profits are ahead.

Why is that?

The only logical reason is that profits were not ahead.

Which tells me margins have not performed as expected, as if revenue is ahead but profit is not, then margin must’ve fallen.

So whilst this isn’t bad news… it could be better.

The next stock is a potential turnaround that is finally beginning to bear fruit.

I think this could be in the early stages of a new trend.

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