JP Morgan Cazenove (JPMC) reckons it’s a “stockpicker’s paradise” for those interested in small- and mid-cap shares.
Its ‘SMid Strategy Framework’ has apparently provided the Anglo-American investment bank with reliable guidance over the last 17 years, and continues to point to a "benign environment” for the sector in 2021.
That said, it concedes that the first quarter of the new year could be a bumpy as the world remains at the mercy of the coronavirus contagion ahead of the worldwide vaccine roll-out.
“However, the year-long outlook is encouraging due to far more powerful fundamental tailwinds,” JPMC said in a note to clients.
“Such a positive backdrop is likely to keep investors chasing those few stocks that still offer big recovery upside, as they seem to have started to do.”
That said, the JPMC’s definition of small-to-mid-sized includes the likes of Bellway (LON:BLWY), market cap £3.6bn, and DS Smith (LON:SMDS), value £5.5bn. The two are among its top ideas alongside DCC (LON:DCC), Vectura (LON:VEC), Spectris (LON:SXS), Renishaw (LON:RSW) and Genus (LON:GNS).
The house is 'overweight' on the UK. "But you have to pick your battles," it adds.