Why Resilience, rather than Valuation / Growth? We believe ourselves to be in an “end of the beginning” phase, as investors confront headwinds that are growing in both number and severity, just as the pandemic fires fade. The average and median CY22E EV/EBITDA of our covered stocks remain <9x, and median CY22E PE is at a discount to the 10-year median NTM level. We expect EPS to outpace revenue (CY22E/CY19A), with median forecast uplifts of 13% and <11% respectively, reflecting a widespread and enforced focus on cost management that we believe will prove persistent for most of our stocks. Valuations do not overly concern us, resilient models – and their implications for earnings deliverability – do. We review stocks from our sub-sectors in Special Situations, Distributors, Recruiters, Advisory, Utilities, and Construction, and employ a disciplined and objective screen to uncover those we believe will deliver in challenging times, and those that we think will struggle. Changes to recommendations and TPs: We cut Mears and Sanne to Hold from Buy (HMG/contract risk and bid valuation respectively) and raise Knights Group to Buy from Hold on valuation grounds. Our target price rises by 20%+ on Alpha FMC reflecting sustained and enduring tailwinds, combined with exceptional recent execution. Midwich stands out for us as a materially undervalued compounder, with the greatest M&A potential and earnings momentum (30%+ average consensus EPS upgrades since Mar’21) in our coverage. We believe Midwich is the best placed distributor to pass on inflation, and that its AV focus makes it a major long-term beneficiary of structural change to communications in the “new normal”. Recovery plays: strength building, patience required. IWG’s bold ambition, potentially to split the business to enhance focus and create value, aligns with its audacious ambition to disrupt the global office market. JSG’s mission-critical workwear, net cash and M&A opportunities make it a compelling recovery opportunity that the market has left behind to date. Value picks, with, in our view, a safe yield >4% and a lower-quartile PE include Headlam (robust balance sheet, dominant market leader); Keller (global leader, asset backed); and Hargreaves Services (coal exit, 8% FCF yield). Renewi’s 3% yield (CY23E), stands out, as does its PE rating – one of the lowest in our coverage – which fails to reflect growth from the innovation pipeline, ATM recovery & the Renewi 2.0 programme. Ongoing caution, in our view, is merited on PayPoint where the success of its turnaround appears to be priced in, despite risks to growth in nascent businesses, and the biggest fall in the Altman Z-score rating in our coverage. A 10 minute podcast will shortly be accessible here where you can hear our team discuss these thoughts with Investec’s Head of Research.