10 of the fastest moving FTSE 100 stocks in 2019

Stockopedia's Ben Hobson spots the trends after a fast start to 2019 for many FTSE 100 stocks. 

Fast forward three years of course, and things look very different. Ocado (LSE:OCDO) has some big deals in the bag with international retail giants. And while profitability seems some way off, it's now a business that gets taken seriously. Whisper it, but Ocado is turning into one of the UK's big tech-driven success stories of recent years. With a valuation a whisker away from £10 billion, most its short sellers are long gone.

Indeed, against a backdrop of heightened uncertainty - and the market slide late last year - Ocado has thrived. In terms of relative price strength, the stock leads the FTSE 100 by quite a distance on a 1-month, 3-month, 6-month and 1-year basis. 

Bear in mind that a year ago a pretty hefty eight per cent and more of its shares were still being shorted. Since then the price has confounded the smart money and soared by 170%. Nothing else comes close. Those that were utterly convinced it was a house of cards have probably had a lot of explaining to do.

Whatever happens from here, Ocado's stunning change of fortune in recent years is a reminder - on an individual stock basis - of just how unpredictable markets and investing can be. Finding these kinds of shares (and sticking with them) can be exceptionally hard. Which is why a diversified portfolio approach may actually be a preferable way forward.

After the declines in the market last year, there has been a modest rally unfolding in the early months of 2019. The FTSE 100 is up by around 10% and the FTSE 250 is slightly ahead of that. Recoveries among the smaller stock indices like the AIM All Share have been more muted. 

A look at the winners among the larger shares suggests that while Ocado has been a special case, there are  trends out there. It reinforces the view that cross-sector diversification really can be a benefit to investors. (The table is sorted by 6-month relative price strength).

Source: Stockopedia

It's a routine occurrence that when there's a sense of fear around, mining stocks often prosper - and that's what we see here. The FTSE 100's mining giants like Anglo American (LSE:AAL), Rio Tinto (LSE:RIO), Antofagasta (LSE:ANTO), BHP Group (LSE:BHP) and EVRAZ (LSE:EVR) have seen some stunning gains over the past year.

These kinds of massive out performances often only come when sectors experience cyclical recoveries. Mining was well out of favour just a few years ago, but a combination of commodity price strength, foreign market exposure and a sense of 'safe haven' protection from domestic economics makes mining stocks an appealing choice. A number of them have the added bonus of above-average yields, too.

Besides them, and perhaps with a nod to the huge influence that tech has had on valuations in the States, software stocks have some momentum behind them. Groups like Micro Focus (LSE:MCRO), Auto Trader (LSE:AUTO) and Sage (LSE:SGE) are in very different markets, but investors seem to see a lot to like here. 

Of note though, out of 171 stocks classified in the Software and IT sector across the market, around 122 of them have a market cap of less than £100m. Only 17 have a market cap of more than £1 billion - and it’s here where most of the momentum in the sector can be found right now.

What next for 2019?

Overall, it has been encouraging to see the main FTSE indices drifting higher in the early part of 2019. The trends suggest that investors are being picky about where to go. Small caps have been less popular and sectors like mining and technology have been some of the beneficiaries.

For most investors, it can be near-on impossible to pick big winners like Ocado (or even short them as potentially big losers). As we've seen in recent years, even the smartest investors can get it very wrong with individual stocks. So it might be preferable to take a portfolio view and simply farm the benefits of being diversified across sectors over long periods. Then you can leave the perils of hunting tomorrow’s big winners (or losers) to somebody else.

About Stockopedia

Stockopedia helps individual investors beat the stockmarket by providing stock rankings, screening tools, portfolio analytics and premium editorial. The service takes an evidence-based approach to investing, and uses the principles of factor investing and behavioural finance to help investors make better decisions.

Interactive Investor readers can get a free 14-day trial of Stockopedia by clicking here.

These investment articles are simply for generating ideas. If you are thinking of investing they should only ever be a starting point for your own in-depth research.