Tip of the Week: Small-cap returns could dwarf larger stocks

TIP OF THE WEEK

Giles Hargreave, manager of the Marlborough Special Situations fund, explains his enthusiasm for three very different small-cap companies.

H&T Group The current trading environment for smaller companies is a positive one. Interest rates remain low, businesses have stripped out costs and there is little upward pressure on wages. It is a climate that provides plenty of opportunities for funds such as ours that invest primarily in businesses with a market capitalisation below £250m. One company I particularly like at the moment is H&T Group, the largest pawnbroking chain in the UK, with a market cap of around £103m. It offers a range of additional services, with gold buying proving particularly successful, and had a very ...