Algy Hall has re-run his 'dividend diamonds' AlphaScreens four weeks on, with some notable changes.
Among the screen that includes larger companies from the FTSE All Share universe, life assurance group Legal & General (LGEN) now passes all eight tests. The company has been unloved by the market and been very much an income rather than a growth stock in recent years. Forecasts for EPS growth can be fickle for life assurers, as unexpected volumes of claims and investment performance can have significant impact. Therefore, the growth forecast test – the only one Legal & General failed last month – could trip it up again in the future.
Diamonds weren’t forever in the case of Babcock (BAB) and Rank Group (RNK). Babcock no longer has a beta (a measure of its share-price correlation with the market) of below 0.75 although given the negative headlines for other companies in its sector, many investors may be avoiding outsourcers anyway. Casino and gaming hall specialist Rank Group now fails the EPS growth forecast test and negative sentiment has been reflected in a falling share price.
Companies from the All Share screen that retained last month’s perfect 8 scores are Page Group (PAGE), Playtech (PTEC) and Telecom Plus (TEP). Each of these companies have different specific and idiosyncratic risks, which are a reminder that screens are a great starting point for stock selection but there is always further analysis to be done.
To find Algy's latest results, click the button below - for comparison purposes his previous screen can be found here.
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