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OVERVIEW

OUR MAIN INVESTMENT IDEA 1. Synthomer plc

INVESTMENT INSIGHTS

WHAT HAPPENED? Market & Sector Analysis

HINDESIGHT DIVIDEND UK Portfolio # 1 (December 2019)

APPENDIX I: THE WAY WE THINK

APPENDIX II: HOW WE THINK

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Firstly, apologies, for the very late arrival of the ‘November’ newsletter. We might have to move

smartly on to the New Year and short change you on your regular insomnia aid. Hopefully, our 2019 stock selections, with 13 winners to 6 losers, will be some consolation for the festive season.

The December UK election is upon us. If my publisher is on his usual pre-Xmas drinks schedule, one of these unlikely characters may well already be installed in 10 Downing Street as Prime Minister by the time you are reading this. Guilty as charged of regurgitating old material, as you can see from the extract below from the last general elections.

WWW.HINDESIGHTLETTERS.COMISSUE 60 - DECEMBER 2019

HindeSight Publishing

2 HINDESIGHT Dividend UK Letter

'None of the above' was the slogan from the classic film Brewster's Millions who fought his campaign on the unworthiness of all the other candidates.

Had it not been for the fact that the polling station was next to the local pub, I wouldn't have bothered to vote, despitemy wife's best efforts to get us registered at our new address and her insistence that I do my democratic duty. Even then, I stood in the booth thinking aloud. I would rather have my pub landlord running the country than any of the current potential political leaders.

Benjamin Disraeli, the great 19th-century British Prime Minister, "Statesmen think of the next generation, politicians think only of the next election. Unfortunately, I don't see many statesmen from where I am sitting today as our current line-up of Downing Street hopefuls offer new promises to the UK electorate on an almost daily basis. Not only is it difficult to determine who is going to be the least worst leader come May 8th, it is also difficult for most people to understand the platforms upon which these disappointing figureheads are marketing their election manifestos.

This excerpt was written in one of my 2015 blogs, and staggeringly enough, the quality of politicians has declined dramatically even from that low level.

As the UK Gross Domestic Product drops away, heading us into the next recession, the quality of politicians must surely have hit an all-time low, but hey, I thought that a few years ago too. While I’m sure many of the voters, especially the youth, don’t recognise the statesmen from another era pictured above, rest assured, they will be turning in their proverbial graves at their current party leaders. The immense cliff drop, across the whole spectrum, from some of the leaders of the past to today’s is difficult to measure in scale. Maybe the most important being the amount of

respect from the population and your own party members, which are guaranteed to be at an all-time low on both counts.

Can we really talk about Clement Attlee – the war veteran, longest-serving Labour leader, and the Prime Minister who oversaw the development of the welfare state and the NHS after the Second World War – and Jeremy Corbyn in the same breath, without choking. Corbyn, who ‘rules’ over a divided, anti-Semitic party, shows support for terrorists and thinks the Queen’s speech is on TV on Christmas morning! Whose party spouts extreme socialist/communist views that would be so destructive to business that the UK would go bankrupt in months. They rant about the inequality of wealth to appeal to the naïve, inexperienced youth but the only result would be an equality of wealth, where everyone would be poor, with no incentive or ability to ever be better off.

Jo Swinson’s election manifesto is “Stop Brexit, build a better future”, with the presence of a new sixth-former on a daily chat show, pales into such minuscule relevance compared to almost any speech and action in the era of the greatest Liberal leader in history, David Lloyd-George. If Clement Attlee is credited with overseeing the development of the welfare state, it was in fact, Lloyd-George’s radical social reforms that changed life dramatically for the masses. His Old Age Pension Act and National Insurance Act provided workers with insurance and unemployment, as well as a pension to the old. I can’t imagine Jo Swinson being known in the annals of history two weeks Friday, let alone in 100 years’ time.

Of course, Winston Churchill had the benefit of a being a war-time leader – always helpful to unite the country – but it was his courage in the years leading up to WW2, when appeasement was not the filthy word history has given it, that earned him that right to lead the country in their darkest hours. His speeches are the stuff of legends. I have listened to all of those he gave during the war, and rather more often than Boris Johnson’s by a wide margin! The YouGov poll hardly inspires us – strong, likeable but untrustworthy, dishonest and out of touch. Just perfect for leading the country?

THE COMPANY

Mark Mahaffey

Ben Davies

Aalok Sathe

HindeSight Publishing which runs HindeSight Letters is a unique blend of financial market professionals – investment managers, analysts and a financial editorial team of notable pedigree. The co-founders of Hinde Capital, Ben Davies and Mark Mahaffey, a successful alternative investment management company joined forces with the financial journalist David Stevenson best known for his regular columns in the FT Weekend, Money Week and numerous other global media titles to deliver something different in the financial newsletters segment – simply put it’s a reliable newsletter version of a managed fund.

Our writers actually run money, not just write about it, so they are the right mix of book smarts and street smarts. Truly a team of individuals that make up a formidable pool of knowledge, wherever the investing landscape shifts to.

CONTRIBUTORS

CO-FOUNDER & CFO OF HINDE CAPITAL

CO-FOUNDER & CEO OF HINDE CAPITAL

FUND MANAGER

ISSUE 60 - DECEMBER 2019 3

We can’t blame everything on Brexit. Of course, David Cameron was poorly advised to have a referendum with no hurdle of a majority popular vote. (Only 37% of the UK population actually voted to leave) for such an immense change in policy, which has split the country. But we have to get on with it. Our inability to leave Europe has meant we have become a mockery to the rest of the world, but it is much more than that. They all talk of a broken and divided country but will not take ownership of the fact that it is their combined divisive views and broken promises that are responsible for this outcome.

Finally, if we take a quick glance at the last few years of Brexit machinations, we’ll find that the FTSE 100 is going nowhere fast. I suppose with GDP YoY growth falling away, we should be very pleased that the market has

held up well for now. As such, and for all the value of the ‘cheap’ non-US equity markets, I fear the worst is ahead of us. Believe it or not, these last years will be seen as the good times, of low unemployment and property prosperity. Unfortunately, as we can see, our choice of political leaders at this time – potentially soon to be a very challenging time – is not just limited but a lost cause. Boris, Jezza or Jo… none of the above, as Richard Pryor would say.


By Aalok SatheFUND MANAGER

AT HINDE CAPITAL

Price (£GBp)Turnover (£mm)Net Income (£mm)Market Cap (£mm)Fwd P/E RatioDividend Yield (%)Payout Ratio (%)Total Debt to Total Equity (%)FCF to Market Cap (%)ROIC (%)

303.001,618.999.81,293.246311.04.2%-73.6%-10.4%

SYNTHOMER PLC

The business was sold to J.P Morgan & Co in 1919. As time went on and through the acquisition

of Revertex Chemicals in 1980, Synthomer has been transformed into a diversified chemicals business that focuses on specialist polymers. Its core business specialises in three active areas: polymer chemicals, pharma chemicals and impact chemicals. The company has a market capitalisation of over £1.2bn, employing almost 3000 people and is a member of the FTSE250.

Synthomer specialises in aqueous polymers and was a huge growth candidate over the decade, leading up to December 2018. The company hit a high in August 2018 but there has been a major slowdown in its earnings growth since then. As a result, it has suffered from a growth stock deflationary correction that has seen its share price trade lower by over (40%) at a time when the UK chemicals industry has also fallen out of favour, as cyclicals have underperformed in the region.

SYNTHOMER PLCINVESTMENT IDEA #1

Synthomer plc is a UK-based specialist chemicals business that traces its roots back to 1863 and the trading house known as Andrew Yule & Co in Calcutta, India.


As of mid-November 2019, the top 20 constituents in the model were: Name Ticker Equity Score Trend Index Signal

MICRO FOCUS INTERNATIONAL MCRO LN EQUITY 64.21 42.71IMPERIAL BRANDS PLC IMB LN EQUITY 63.37 50.64

MARKS & SPENCER GROUP PLC MKS LN EQUITY 59.23 55.33BRITISH AMERICAN TOBACCO PLC BATS LN EQUITY 57.51 48.58

PETROFAC LTD PFC LN EQUITY 57.15 35.14 trend ready & rsi oversoldSYNTHOMER PLC SYNT LN EQUITY 56.80 45.99

CINEWORLD GROUP PLC CINE LN EQUITY 56.31 58.99BT GROUP PLC BT/A LN EQUITY 56.18 53.40

WPP PLC WPP LN EQUITY 56.04 57.55DRAX GROUP PLC DRX LN EQUITY 55.49 44.58

ITV PLC ITV LN EQUITY 53.80 50.21IMI PLC IMI LN EQUITY 52.14 50.26

PAGEGROUP PLC PAGE LN EQUITY 51.83 41.73ASSOCIATED BRITISH FOODS PLC ABF LN EQUITY 51.77 44.23

BABCOCK INTL GROUP PLC BAB LN EQUITY 51.70 51.15VICTREX PLC VCT LN EQUITY 51.50 44.88

PLAYTECH PLC PTEC LN EQUITY 51.45 46.37BUNZL PLC BNZL LN EQUITY 51.07 45.12

EASYJET PLC EZJ LN EQUITY 50.94 51.08RECKITT BENCKISER GROUP PLC RB/ LN EQUITY 50.53 58.23

Given Synthomer’s share price decline over the past 18 months, we believe the stock offers a good value

opportunity, which will provide investors with a solid 4.2% dividend that is well protected and trading at a forward P/E 11x.

This chemical specialist recently warned that its negative performance was due to:

• Depressed European Industrial Activity/Cyclical Underperformance

• Increased political and economic uncertainty

Cyclical Underperformance

The cyclical sector within Europe has significantly underperformed defensive names with global trade headwinds intensifying. The specialist chemicals industry as a whole, including Synthomer and its closest peer Croda, have been trading negatively since the summer of 2018.

Across Europe, consumer conditions appear to be mixed with sentiment weakening. However, with UK growth expectations pointing to a rise in sales growth over the next 12 months and cyclicals being at a trough in their relationship with defensives, we believe we will see a

reversion to the mean that will see the likes of Synthomer being carried higher as part of this trend.

Synthomer has seen its earnings growth slow down slightly but we feel the reaction to this news has been far too negative and believe this well-run company will reinstate this growth over the coming year. Currently, Synthomer’s forward P/E trades at one of its lowest levels, which we believe is temporary.

Being a specialist chemicals producer, the company has a significant barrier to entry and any allocation to the sector will benefit all ships.


Seasonality

Seasonality plays a major role in Synthomer’s share price and the chemical specialist is entering into a positive period. As you can see in the chart below, Synthomer’s performance tends to ramp up in December and this trend carries on until the following May. As a result, this positive momentum may certainly see Synthomer’s share price rise higher.

Brexit and growth worries

We can’t go far without using Brexit as an excuse in any sector. Growth profiles across Europe and the UK are hardly uplifting, despite the free money of zero interest rates. We can argue as well that the huge divergence between the US and the rest of the world’s stock markets makes UK stocks look cheap in general. Our model will highlight stocks like Synthomer, a cheap stock, in a cheap sector in a cheaper country which gives the investor some comfort that the margin of safety is much better than average.

Analysts’ Corner

Synthomer plc is a leading specialist chemical producer with a high barrier to entry. It has been attributed with an average target price of 390p, which would present an upside of over 28%.

Summary

Synthomer has come under significant pressure since summer 2018, as its share price has suffered due to global economic and political worries, and it is also being impacted by the negative trend in European cyclical names. With the chemical operator trading at 11x its forward earnings and offering a dividend yield of 4.2%, we believe Synthomer will surprise to the upside and offer investors significant value compared to the broader market. Given that European cyclicals are at a long-term low and Synthomer is a highly specialised business, we believe the company is ready to reverse its current downward trajectory.


INVESTMENT INSIGHTSAs we end yet another year, many can be excused for being bored by more of the same. Whether it is the actual pathetic state of the UK’s Brexit inability, Trump’s continued bizarre presidency or just a plain déjà vu feeling, the US stock market and USD dollar continue to defy all again in 2019. While most of the world’s stock markets amble along, the US stock market powers forward, and has outpaced the rest by the best part of 30% over the last five years.

Trade wars and tariffs, impeachment hearings and nose-bleed valuations only seem to increase the gap.

‘America First’, really does seem to be the theme tune. Despite American firms crying out that tariffs will ruin them and China believing they can export anywhere, the divergence between Chinese and US industrial stocks is there for all to see.

Every chart you dig up continues to highlight the bullet-proof nature of the US stock market. Moneyweek’s chart of the week shows that you don’t need company profits any more for your stock price to soar, just ongoing Price/Earnings expansion. And Soc Gen’s most depressing chart of all shows us that it is not worth bothering investing in the rest of the world’s 16,000 companies because as little as 20% of them beat the S&P over time. FOR NOW.


The strength of the USD currency compared to the rest of the world is very visible when you observe the gold price in multiple currencies. Gold, like oil is typically reported and discussed in USD, but it has barely risen in the last five years. Compare that to many of the other world currencies. The USD is the reserve currency, but nothing lasts forever.

It’s hard to summarise the motley collection of charts. Trend followers will gladly say that being invested in huge corporates is the only game in town and why shouldn’t it continue? Why does the longest economic expansion in history have to end anytime soon? Global interest rates are negligible. If Trump doesn’t get impeached, maybe he can force the Fed to cut US interest rates to negative to keep the party going? A famous US economist, Hebert Stein, once remarked, “If something cannot go on forever,

it will stop.” The problem is not just when that will happen, but also the catastrophic consequences of when it does occur.


UK MARKET VALUATIONS

PORTFOLIO UPDATE - WHAT HAPPENED?MARKET & SECTOR ANALYSIS

UK INDICES PRICE/EARNINGS RATIO PRICE/BOOK RATIO DIVIDEND YIELD(%)

FTSE 100 INDEXFTSE 250 INDEX

17.4523.13

1.731.70

4.93%3.81%


HINDESIGHT DIVIDEND UK PORTFOLIO # 1 PORTFOLIO UPDATE AND CONSTRUCTION (DECEMBER 2019)

NO DIVIDENDS

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Highest ranked (‘cheapest’) stocks selected from the FTSE350 universe (as 31st of December 2019).

CURRENT EQUITY FACTOR MODELName Ticker Equity Score Trend Index Signal

MICRO FOCUS INTERNATIONAL MCRO LN EQUITY 64.21 42.71IMPERIAL BRANDS PLC IMB LN EQUITY 63.37 50.64

MARKS & SPENCER GROUP PLC MKS LN EQUITY 59.23 55.33BRITISH AMERICAN TOBACCO PLC BATS LN EQUITY 57.51 48.58

PETROFAC LTD PFC LN EQUITY 57.15 35.14 trend ready & rsi oversoldSYNTHOMER PLC SYNT LN EQUITY 56.80 45.99

CINEWORLD GROUP PLC CINE LN EQUITY 56.31 58.99BT GROUP PLC BT/A LN EQUITY 56.18 53.40

WPP PLC WPP LN EQUITY 56.04 57.55DRAX GROUP PLC DRX LN EQUITY 55.49 44.58

ITV PLC ITV LN EQUITY 53.80 50.21IMI PLC IMI LN EQUITY 52.14 50.26

PAGEGROUP PLC PAGE LN EQUITY 51.83 41.73ASSOCIATED BRITISH FOODS PLC ABF LN EQUITY 51.77 44.23

BABCOCK INTL GROUP PLC BAB LN EQUITY 51.70 51.15VICTREX PLC VCT LN EQUITY 51.50 44.88

PLAYTECH PLC PTEC LN EQUITY 51.45 46.37BUNZL PLC BNZL LN EQUITY 51.07 45.12

EASYJET PLC EZJ LN EQUITY 50.94 51.08RECKITT BENCKISER GROUP PLC RB/ LN EQUITY 50.53 58.23


We passionately believe that dividends really,really matter. William Thorndike in his fascinating book

'The Outsiders- Eight Unconventional CEOs and Their Radically RationalBlueprint for Success' examined one of the most impor tant aspects of running a business a CEO must undertake: Capital Allocation. He summarised how a CEO deploys capitalin order to best utilise cash flow generated from his or her business operations. Essentially,CEOs have 5 ways of deploying capital:

• Investing in existing operations• Acquiring other businesses• Repaying debt• Repurchasing their own stock (buybacks)• Paying dividends

Dividend payments are a crucial operation in creating stakeholder wealth. It is this aspect of a business that we are so fixated by - the propensity for a company to produce and continue to grow dividends so that we may accrue wealth over a generation. But as readers will know we can't just grab stocks with the highest yield for fear that this signals some cash flow or even solvency issues for the firm. So it is with this very real threat in mind we explore only well-capitalised FTSE 350 companies.

This letter's purpose is to help inform readers on dividend investing so that they can construct a portfolio of sound UK dividend stocks based on our recommendations. Our prerequisite is that any stocks selected for this let ter

must be liquid,well-capitalised with a strong free cash flow and a progressive dividend policy.

Our System

• Every month we will provide a write up of 3 to 4 stocks untilwe create a portfolio of 25 UK dividend stocks. This will be the HindeSight UK Dividend Portfolio #1

• You wiII bealerted by subscriber email intra-month when these stocks become a buy. Timing is critical to the strategy, not only buying quality stocks but buying them at the right time

• Theentry points willthen be recorded in the next month ly in the HindeSight UK Dividend Portfolio section and the stock(s) wr itten up in full

• We will run our winners but tend to rotate every 6 months depending on specific criteria which would elevate cheaper companies into the portfolio relative to stocks that had performed

• The basis for stock and portfolio selection is derived from our quantitative systematic methodology which screens these companies using the Hinde Dividend Value Matrix, (HDVMdl), a proprietary stock-rating system

• In the section on ETPs we will highlight our invest ment philosophy and the investment process behind our stock selections. This is the b*is of our dynamic risk and money management in our portfolio con struction for you. You can also read the stand-alone Hinde Dividend Value Strategy document to see the methodology behind our stock selection.

APPENDIX I

THE WAY WE THINK


“We have met the enemy, and he is us.” Walt Kelly

Our key to long-term performance investing is premised on the following:

• Systematic rule-based strategy• Systematic risk and money management• Occam’s razor, aka ‘K.I.S.S.’, Keep It Simple Stupid• Consistency• Discipline

All our investment ideas are rule-based methodologies driven by systematic and quantitative models.

Hinde Dividend Value Strategy

Hinde Dividend Value Strategy seeks to generate a total return from an actively managed basket of UK dividend-paying stocks. The strategy selects 20 highly liquid, mid-to-large capitalised stocks on an equally-weighted basis, which offer the highest total return potential. The 50%

Hedge version of the strategy would then be subject to a strategic Beta Hedge*, which is designed to cover 50% of the value of the UK stock basket at all times.

The 50% hedge is maintained using UK equity benchmark indices to reduce exposure to overall market volatility, but without reducing overall total returns to the market over the long run. The Hinde Dividend Value Strategy (100% Hedge) would deploy a full beta hedge at all times.

Hinde Dividend Value Matrix ®

The strategy employs a quantitative, systematic methodology, whereby FTSE 100 and FTSE 250 constituent stocks are screened using the Hinde Dividend Value Matrix®, a proprietary stock-rating system. We use the same system to select stocks for any of our strategies, long-only, 50% Hedge or 100% Hedge. The only difference is clearly the extent of the hedge on the exposure to the overall market.

APPENDIX II

HOW WE THINK


The basic premise of the strategy is to accelerate returns by selecting relatively high yielding stocks that offer the highest potential for capital revaluation. The dynamic rotation of stocks each quarter enables us to sell stocks where the capital revaluation and dividend has been captured, and use this additional capital to invest in more undervalued quality companies. If successful, this cycle of capture and re-investment offers the chance to significantly improve the total return generated by the Dynamic Portfolio.

The basis of the stock selection process is the Hinde Dividend Value Matrix®, which is a derived process that looks at 3 crucial variables:

* Beta is the stock’s sensitivity to market movements, e.g. if a share has a beta of 1.5 its price tends to move by 1.5% for each 1% move in the index

1. Dividend Screen

The top ranking stocks will be those offering a relatively high dividend. A composite of the following criteria comprises the Dividend Rank:

• Relative Dividend Yield• Dividend Capture• Payout ratios

The Relative Dividend Yield assesses if a company pays a higher dividend than the Index it derives from (the FTSE 100 or FTSE 250). The Dividend Capture criteria explain how quickly and how much of the dividend is paid at any point in time. The Payout Ratio gives a snapshot of whether a company will be able to maintain and grow its dividend. It helps us to assess how much of a company’s revenue, profit or cash flow is paid out in dividends.

The lower the amount of dividends paid out as a percentage of profits, the healthier future dividend potential will be. History is for once a good guide as to whether companies will continue to pay and grow their dividends. A stock with an excessively high yield relative to its sector or the overall market is invariably showing signs of heightened risk to its dividend sustainability and often the viability of the company itself. The screen incorporates a limit on yield dispersions from the overall market.

The strategy is emphatically not a yield chaser. It is the Performance and Value screens that are used to assess the total return potential of a stock by analysis of how undervalued it is relative to its fundamentals, sector and overall market index.

2. Performance Screen

The top ranking stocks have the poorest relative performance to their index over multiple time horizons.

A composite rank of the following criteria provides the Performance Rank:

• Stock relative performance ranked over multiple time periods

• Average of time periods taken to select rank of stocks

3. Value Screen

The top ranking stocks by key fundamental criteria show stable fundamentals and exhibit upside momentum growth potential. The following are some of the criteria that provide the Value Rank:

• Value - Price to Book (intangible book adjustment), Free Cash Flow metrics

• Quality - Return on Investment and Earnings metrics

• Financial Stability - Debt levels, Coverage and Payout ratios

• Volatility - Stock variance, Dividend variance

• Momentum - Sales Growth, Cash flow metrics

• Liquidity - Minimum market capitalisation relative to index, Shares outstanding

Implementing the Hinde Dividend Value Matrix ®

The FTSE 100 and FTSE 250 stocks are ranked using the Dividend, Performance and Value screens. An equally-weighted composite rank is then taken of these 3 ranks, which provides a final ranking from which a selection of 20 stocks is made for the portfolio.

The stocks with the highest ranking are compiled for the FTSE 100 and the FTSE 250. The top 10 from each index are then taken, subject to diversification rules, which entail that normally only 1 stock per sector per index can be invested in. For example, if the top 10 stocks are all mining companies, the selection process would take the first of these and then move on to select the next top stock from another sector. As long as a stock has the highest score in its sector, the fact that it has appeared in the final ranking means it is already eligible for investment. In exceptional circumstances, it may be that more than one stock has to be selected from an individual sector.


DISCLAIMER

This newsletter is intended to give general advice only on the importance of dividends within the equity space. The investments mentioned are not necessarily suitable for any individual, and you should use this information in conjunction with other advice and research to determine its suitability for your own circumstances and risk preferences. The value of all securities and investments, and the income from them, can fall as well as rise. Your investments may be subject to sudden and large falls in value and you may get back nothing at all. You should not buy any of the securities or other investments mentioned with money you cannot afford to lose. In some cases there may be significant charges which may reduce the value of your investment. You run an extra risk of losing money when you buy shares in certain securities where there is a big difference between the buying price and the selling price. If you have to sell them immediately, you may get back much less than you paid for them. The price may change quickly, particularly if the securities have an element of gearing. In the case of investment trusts and certain other funds, they may use or propose to use the borrowing of money to increase holdings of investments or invest in other securities with a similar strategy and as a result movements in the price of the securities may be more volatile than the movements in the price of underlying investments. Some investments may involve a high degree of ‘gearing’ or ‘leverage’. This means that a small movement in the price of the underlying asset may have a disproportionately dramatic effect on your investment. A relatively small adverse movement in the price of the underlying asset can result in the loss of the whole of your original investment. Changes in rates of exchange may have an adverse effect on the value or price of the investment in sterling terms, and you should be aware they may be additional dealing, transaction and custody charges for certain instruments traded in a currency other than sterling. Some investments may not be quoted on a recognised investment exchange and as a result you may find them to be ‘illiquid’. You may not be able to trade your illiquid investments, and in certain circumstances it may be difficult or impossible to sell or realise the investment. Investment in any of the assets mentioned may have tax consequences and on these you should consult your tax adviser. The opinions of the authors and/or interviewees of/in each article are their own, and are not necessarily those of the publisher. We have taken all reasonable care to ensure that all statements of fact and opinion contained in this publication are fair and accurate in all material respects. All data is from sources we consider reliable but its accuracy cannot be guaranteed. Investors should seek appropriate professional advice if any points are unclear. Ben Davies and Mark Mahaffey the editors of this newsletter, are responsible for the research ideas contained within. They or any of the contributors or other associates of the publisher may have a beneficial interest in any of the investments mentioned in this newsletter.

Disclosures of holdings: None relevant to any content discussed within this issue of the newsletter

This score is derived from 3 inputs that have been obtained from all the external analysts at leading institutions who are covering the stock:

1. The 12 month target price in relation to current price

2. The number of analysts covering the stock

3. The recommendation analysis, e.g. STRONG SELL, SELL, UNDERPERFORM or HOLD

This score is used to observe the other analysts’ view of the stock and is helpful when understanding the methodology that other analysts use to determine their 12-month target price. We ultimately get a blend of price targets that is based on different valuation metrics.

EAS Score Output:

1. The combined score will vary from 30-702. A stock with a lowest score of 30 shows the majority

of analysts not only have a full sell/underweight recommendation, but also a low 12-month target

price in relation to current price.3. A stock with the highest score of 70 shows the majority

of analysts not only have a full buy/overweight recommendation, but also a high 12-month target price in relation to current price.

Note:

On a standalone basis, the EAS score must be viewed in the following context:

• Equity analysts issue far more positive recommendations than negative

• If all analysts are overwhelmingly bearish or bullish, then this can signal a contrarian position be held, but this is determinate on the where the stock is valued.

However, in conjunction with the HDVM ®, we have found the score to be useful when it is high or momentum is turning higher, as this suggests that the stock offers deep value.

EXTERNAL ANALYST SCORE (EAS)

OVERVIEW TOP NEWS FEED - Hinde Capital · VICTREX PLC VCT LN EQUITY 51.50 44.88 PLAYTECH PLC PTEC...

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