Small cap silliness: ten stocks that look too cheap

In May this year, I created a screen to look for UK stocks that looked simply too cheap. I picked the midcap space because I believed midcaps would be the first to benefit from any fund flows back into the equity markets. Sadly, those flows have yet to materialise. Indeed, after brief positive flows into equity funds in March and April this year, fund flows have since gone negative again:

And this is reflected in the rather sickly performance of the FTSE250 since that date:

The narrative remains that the UK is the "sick man of Europe" and is suffering from lacklustre GDP growth and that this makes the UK uninvestable. While the UK has been far from outstanding on the international stage, this narrative misses a couple of key points. The first is that there isn't a positive correlation between short-term economic growth and stock market performance. This may seem counter-intuitive since countries that have won the growth race have also won the stock market race over the very long term. However, when Wharton Professor Jeremy Siegel looked at the data for...