For only the second time this year, European small caps outperformed large caps last month (+3.8% for our small cap benchmark index, compared with +1.8% for its large cap equivalent). Both times were during earnings season: in February during 2022 annual publications, and in July during half-year publications. In other words, at times when investors were paying more attention to microeconomic data than to macro trends. This supports our belief that small caps will rebound after years of underperformance due to a deteriorated macroeconomic environment (US–China trade war, Covid, inflation, war in Ukraine, rate hikes, etc.). As these concerns fade into the background, we expect that a focus on fundamentals will return.

It was under these economic conditions that Amplegest MidCaps slightly underperformed its benchmark index last month.

GTT announced good results. It is sticking to its business plan and has exceptional visibility, with orders going out to 2027. The group enjoys a monopoly in the design of maritime LNG carriers. This market is growing quickly and is vital for the energy transition. GTT’s “asset light” model is a significant cash generator which allows the group to invest heavily in new technologies, especially hydrogen, in order to maintain its long-term leadership.

X-FAB continues to bring positive surprises to the market, with results better than expected. The group is still very undervalued, even though its financial profile has improved significantly as a result of long-term customer contracts which provide greater visibility.

We are profiting from the SES-IMAGOTAG rebound after publication of the second report of Gotham City Research. The report confirmed our believe that accusations were unfounded, and we were able to increase our position at a much lower share price.

BARCO disappointed investors, because of standardisation of the health care sector  and recovery in China that was weaker than expected. Above all, the market is concerned about the health of the company’s co-CEO, who did not attend the earnings presentation. We remain enthusiastic about the high quality of this investment. With its videoconference solutions, BARCO should benefit from growth in telework.

We sold our positions in MTU AERO as a result of problems with GTF engines which strongly deteriorate group visibility; and in PIRELLI because of governance issues (i.e. a dispute between the Italian government and a key Chinese shareholder). We opened a position in FORVIA, which benefits from lower exposure to thermal technologies and from a financial profile that has improved since the acquisition of Hella.