Top FTSE 350 Risers Last Month

UK stocks have been under pressure recently after earlier gains in the month amid a shift in risk appetite, but analysts remain positive about Britain's value proposition.

Top FTSE 350 Gainers Over Last 30 Days

1. Oxford Nanopore (ONT), +67%
2. Hochschild Mining (HOC), +51%
3. Pan African Resources (PAF), +46%
4. Kainos (KNOS), +45%
5. Harworth (HWG), +44%
6. Endeavour Mining (EDV), +33%
7. Bodycote (BOY), +32%
8. Ocado (OCDO), +31%
9. WPP (WPP), +30%
10. Fresnillo (FRES), +30%

Materials and Value Stocks Boost UK Indices

The FTSE 350, a broad gauge of UK stocks, has declined over the last couple of days, erasing the gains it made earlier in the second half of earnings season. However, there is a notable difference between the FTSE 100, which is more globally focused, and the FTSE 250, which is more domestically oriented. The international component has declined, while British-focused stocks have outperformed, suggesting that the trend towards searching for value in the UK continues. Analysts generally conclude that broad underperformance in the domestic component of the FTSE 350 over the last several years has left it comparatively undervalued. Investors nervous about high valuations and rising interest rates have sought refuge in Britain, where the BOE is expected to be the last of major central banks to raise rates.

It's not just investors, but British businesses are also becoming more optimistic. The Lloyds business confidence barometer, published on Friday, rose to its highest level since March, suggesting the economy is moving past the summer political uncertainty. While there is a general mood of optimism, certain sectors stand out, even bucking the trend. A look at the top-performing FTSE 350 stocks over the last month shows a heavy weighting toward miners, including those focused overseas. Beyond that, company-specific news has been the major catalyst behind double-digit monthly results, including more takeover offers. Here's what's been driving the strong performance in these FTSE 350 stocks over the last month.

A Golden Opportunity For Miners

Four of the top five performers are miners, suggesting this is a space that has a lot of investor attention. But not just miners; precious metals miners. All four of them generate virtually all of their sales from precious metals. Pan African and Endeavour are practically pure-play gold producers. Notably, miners have outperformed the yellow metal, which has risen 15% over the last month, thanks to expected higher profit margins. Amid a slowing US economy and easing geopolitical tensions, gold prices could continue to rise later in the year, powering these firms even higher. JPMorgan, for example, expects gold to hit $6,000 per ounce by the end of the year.

Oxford Nanopore and WPP Rising in Rebound

Fitting with the general theme of UK stocks seeing positive gains after underperforming previously, amid a turnaround in their market, are WPP and Oxford Nanopore. The latter was battling a period of unprofitability, but surged in the wake of its H1 earnings, which showed it was on a much better path to profitability than analysts had expected. WPP also bounced after its earnings were not as bad as feared, as the advertising company navigates a complicated market. Its unexpected rise in operating profit and affirmation of guidance left investors more confident that CEO Cindy Rose is stabilising the business. 

Potential Acquisition Supports Harworth

The landholding and management firm's stock price has skyrocketed recently, thanks to another theme that has become a constant in UK stocks: being bought out. In this case, though, it's by another British firm, as a Peel Holdings unit is making a concerted effort to acquire the company despite objections from Harworth's board, which is seeking a better offer. The latest offer was 172.5p per share, which is below the price after the bump following the announcement. Clearly, market participants believe the company is worth more and expect a better offer from Peel.