Edison Investment Research - Henderson Smaller Companies Investment Trust PLC (HSL) Henderson Smaller Companies Investment Trust - Weak sentiment outweighing operational strength

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Edison Investment Research

Pedro Fonseca

Henderson Smaller Companies Investment Trust - Weak sentiment outweighing operational strength

Henderson Smaller Companies Investment Trust (HSL) has been managed by Neil Hermon for the last 20 years. He explains that small-cap stock price weakness in 2022 was due to valuation compression and was not a reflection of lower earnings; in essence macroeconomic events outweighed business trends at the micro level. However, the manager believes the interest rate cycle is close to peaking given that inflation is rolling over and the UK economy is relatively weak. Hermon considers the valuations of small-cap UK growth stocks to be ‘very appealing’ and believes that there could be a significant pickup in merger and acquisition (M&A) activity in a more robust economic environment when credit is more freely available.

11/05/2023 1 EN

Underlying

Henderson Smaller Companies Investment Trust PLC

Henderson Smaller Companies Investment Trust is an externally managed investment trust company. Co. engages Henderson Investment Funds Limited to manage its assets.

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GB0009065060 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Pedro Fonseca

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Henderson Smaller Companies Investment Trust - Weak sentiment outweighing operational strength

Henderson Smaller Companies Investment Trust - Valuation opportunities in quality UK small caps

Henderson Smaller Companies Investment Trust - No light at the end of the tunnel yet

Actinogen Medical - Funding in place to complete XanaMIA Phase IIb

Games Workshop Group - Sigmar the fourth

Datatec - Encouraging H1 across all divisions

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