February 2026 - Breakouts

#UKSTOCKS #SRC #SAGA #AEP #FCH #DFS

Introduction

Breakouts for this month!

This screen is run 12 times a year at the beginning of each month, thus providing a monthly view.

If you have not yet seen the full list of screens or the 2026 schedule, here is a link to that original article.

The Breakout Screen

Screen Overview

This screen is available in the Sharescope Filter Library, in fact, in this situation, there are two of them, they’re titled…

• Briefed Up - M01 - Breakouts - 12m

• Briefed Up - M01 - Breakouts - 3m

The reason for two screens in this situation is simply to make the process easy for you to switch between 12 month and 3 month breakouts. In a more bullish environment the 12 month breakout is perhaps more appropriate, to identify the strongest stocks. In a more bearish environment the 3 month breakout would perhaps be more appropriate, to identify stocks which may be leading a recovery.

For those of you needing any orientation with filters, this Sharescope article is very useful, as it also includes details on how to access the library and these filters.

Do remember, for additional help and support, all Sharescope subscribers can book free training sessions here.

Screen Frequency

Every month, on the first Saturday of the month, 12 times a year.

Screen Objective

• Identify stocks that have broken above the high of the 12 month range prior to this month and are still holding that high now (Briefed Up - M01 - Breakouts - 12m), or

• Identify stocks that have broken above the high of the 3 month range prior to this month and are still holding that high now (Briefed Up - M01 - Breakouts - 3m)

PURPOSE - Identify potential momentum plays - Could continue higher.

Screen Settings

Stock Universe Settings

• Market Cap: Default - £10m to No limit - To exclude small illiquid stocks

• Sectors: Default - Exclude “Tobacco”, “Industrial Metals and Mining”, “Precious Metals and Mining”, and “Oil, Gas and Coal” - To exclude sectors I don’t typically invest in

• ISIN Country of Register: Default - Exclude “JP” and “FR” - To exclude these specific foreign registered stocks

Note: My default stock list is always “LSE shares (excluding Investment Trusts (ITs))”.

Base Settings

• For “Briefed Up - M01 - Breakouts - 12m” - Price is higher than the high of the 12 month range prior to this month

• For “Briefed Up - M01 - Breakouts - 3m” - Price is higher than the high of the 3 month range prior to this month

Optional Settings

(To potentially return less results)

• Forecast EPS (for next year) is greater than 0 - Forecast to make a profit next year

• Forecast EPS (for next year) upgrade percentage (in the past 3 months) is greater than 0 - Brokers have upgraded next years earnings forecasts in the past 3 months

January 2026 - Breakouts

Due to the general bullishness of the market at the moment I have decided to use the “Briefed Up - M01 - Breakouts - 12m” filter this month. The baseline returns 122 stock (a few less than the 129 last month) vs 190 (a few more than the 181 last month) for the “Briefed Up - M01 - Breakouts - 3m” filter.

Again this month I have set a market cap upper limit of £2,000m, mainly because there are quite a few on the list still and this is where I also typically invest. The market cap lower limit default (£10m) has not been changed.

This reduced the list from 122 stocks to 66.

To reduce this further I checked the “Forecast EPS (for next year) is greater than 0” setting.

This reduced the list from 66 stocks to 48.

Settings Used

Stock Universe Settings

• Market Cap: £10m to £2,000m

• Sectors: Exclude “Tobacco”, “Industrial Metals and Mining”, “Precious Metals and Mining”, and “Oil, Gas and Coal”

• ISIN Country of Register: Exclude “JP” and “FR”

Base Settings

• Price > High between 13m and 1m (ago)

Optional Settings

• Forecast EPS (for next year) is greater than 0 - Checked and set to 0

• Forecast EPS (for next year) upgrade percentage (in the past 3 months) is greater than 0 - Unchecked

Actual Settings

Results

This month I have also added two new columns as I wanted to change the focus a little. I have added the forecast PER and the PEG (which is based on that forecast PER and the forecast growth for that year).

This meant I could maybe focus on more interesting stocks, 12 month breakouts that still looked good value.

“Our View”

The Top 5, sorted by market cap with a PEG less than 1 are, SRC, SAGA, AEP, FCH and DFS.

As usual, Paul has kindly allowed me to provide the current view from the Small/Mid Caps with Paul Scott Substack database for the top 5 stocks from the results, so here they are…

CSN has been excluded, it is in the Life Insurance sector which I rarely ever look at.

Members of the Small/Mid Caps with Paul Scott Substack can click here to access details and commentary for the vast majority of all of the stocks from the above results. The full history for most UK stocks is available via the online search tool, a database covering over 12 months of updates in some cases.

For example, the last 5 entries for SAGA from the online search tool (which is now actually an app you can download to your phone, it’s well impressive)…

Note: As well as the the five daily analysis table entries, the three main articles coverage for SAGA in April and June last year, and the 29th January last week (by yours truly).

Members of the Small/Mid Caps with Paul Scott Substack get:

• Access to the complete history, and current view, of over 800 UK stocks

• Main section articles on over 200 of those UK stocks

• Morning RNS announcement analysis, out before the market open

• Daily analysis of up to 30 stocks a day, even more on very busy news days

• Exclusive interviews

• Up to 5 podcasts a week. and a weekly update video

• Access to an active and growing community of UK investors, where participation is encouraged

• A team (which includes me) with almost 100 years of joint investing experience, focused on delivering the best coverage of the UK stock market

My Commentary

SRC - As per last month, not only breaking out to a 12 month high but making 10 year highs. Had a great run in 2025, up over 50%, and still looks decent value. Note, there’s quite a bit of net debt and, as one would expect, no dividend - But, a decent business nonetheless. A forward PER of 14.4x and a PEG of 0.6.

SAGA - Was also on last month’s list, the UK’s number one provider of products and services for people over 50, such as cruises and holidays (75% of revenues), insurance, personal finance and publishing. An amazing run recently (up over 3x in 12 months or so) but still looks good value, Small/Mid Caps with Paul Scott Substack members can read that full article from last week here.

AEP - Another one from last month’s list, but I have little to say on this Palm Oil producer as it is an area I don’t think I have ever invested in. The PER is only 8.6x and on a PEG of 0.3 it is probably worthy of a deeper look for those with better knowledge of the sector and palm oil supply and demand.

FCH - This B2B lending platform had legal issues but they now appear to be behind it (hopefully/perhaps) - Loans, I velieve, are quite short term (c.18 months), so needs regular new customers, but doesn’t seem to be a problem at present. A positive update drove earnings upgrades here a couple of weeks ago and price joined in on the party. On a PER of 35x it doesn’t appear cheap until you release the forecast growth and PEG of 0.4. Worth a look if you believe the growth story but as it’s a small lender it is not without the associated risks.

DFS - Another one from last month’s list, that’s four out of five! Seems like a recovery in progress here for the “living room” retailer on a PER of 13x and a PEG of 0.3. Revenue forecasts look OK and if margins can be improved, could well see more upgrades, also featured in my UK Stock Upgrades - February 2026 article last week.

Summary

The Small/Mid Caps with Paul Scott Substack

If you are not already a subscriber to the Small/Mid Caps with Paul Scott Substack and are interested in a 1 week FREE trial, click here to access all of the features mentioned above.

Sharescope

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Thank You

If you have any suggestions for improvement, or any feedback at all, do please leave a comment.

Thanks for reading, and see you in the next one!

IMPORTANT NOTE: It is vital that you check all figures in this article for yourself, as they may be inaccurate or may have changed since publication.

MORE IMPORTANTLY: No investment advice intended, for information only, I may hold all, some, none, of the stocks mentioned in this article - Do Your Own Research!

Jon