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AlphaScreens: Growth at right price on Aim

London's junior market remains the best place to find a blend of value and growth.
AlphaScreens: Growth at right price on Aim

Two companies from the FTSE All Share Index pass 8/8 of our growth at right price (GARP) tests designed for larger companies. These are housebuilder Bovis Homes (BVS) and packaging product specialist Macfarlane (MACF).

  • At a market capitalisation of £156m, Macfarlane isn’t a big firm and it is also included on the FTSE All Small companies index, which we screen with seven different tests aimed at small companies. Interestingly MACF doesn’t get full marks on this screen, which pays closer attention to the absolute level of indebtedness, as its net debt is too high relative to earnings before tax, depreciation and amortisation (ebitda).
  • Bovis is hardly a blue chip either (its market cap is £1.65bn) – and it is usual to caution against housebuilder shares being identified by this screen as there are more suitable metrics than the price/earnings growth (PEG) ratio to value the sector.
  • Aim is often an interesting hunting ground for growth companies and along with some specialist miners focussed on precious metals, companies that score perfectly against the seven small company tests include hazardous waste experts Augean (AUG).
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