The Alpha momentum screens look for positive trends in earnings per share growth and forecast upgrades as well as share price growth. Few companies pass such a stringent set of criteria, especially late on in economic and stock market cycles - which explains why so few constituents of the FTSE All Share, FTSE All Small Companies and FTSE Aim All Share indices are scoring top marks.
- Only three FTSE All Share companies - Spirent Communications (SPT), healthcare comms specialist Huntsworth (HNT) and marketing services company 4imprint (FOUR) pass 8/8 tests and none of these are larger companies.
- Huntsworth and 4imprint are also the only two companies included in the FTSE All Small Companies index to pass all 8 tests.
- On Aim, motor testing systems provider AB Dynamics (ABDP), Diversified Gas & Oil (DGOC) and Gamma Communications (GAMA) are the only companies to score top marks.
- As we are arguably at a late stage in the economic cycle, investors should ask themselves whether companies’ good runs will continue or are due a pause. For example, directors of AB Dynamics have recently cashed in on some of their shares, which should give investors food for thought.
