Companies that offer growing returns and aren't valued too expensively provide the perfect entry point for equity investors. Unsurprisingly, however, such opportunities are thin on the ground particularly at this late stage in the stock market and wider economic cycles.
- Packaging specialist Macfarlane (MACF) and recruiter Page Group (PAGE) are the only FTSE All Share companies to score full marks on our large cap growth at right price (GARP) screen this month. We run the screen on the whole index but measures have been designed mainly with large cap stocks in mind. For companies also included in the FTSE All Small Companies index, check how they have done against our different small-cap criteria.
- As well as looking at the top rankers, it’s interesting to consider which tests companies have failed. Blue chip consumer staples firm Unilever (ULVR) passes most tests, including having a Price to earnings growth (PEG) ratio that’s cheaper than the index median, but it hasn’t achieved sufficient revenue growth to score full marks.
- Hobbyist retailer Games Workshop (GAW) has been one of the stars of the last 18 months and more but the two tests it fails highlight doubts as to whether it can maintain its rate of earnings per share (EPS) growth.
- Another share with great momentum is sports apparel retailer JD Sports (JD.) but the screen gives signals to keep an eye on earnings growth. The free cash flow position reminds us there was money spent on acquisitions last year and investors should consider the prospect for the successful integration of lower margin businesses Finish Line and Sport Zone.
