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AlphaScreens: GARP sense check after election boost

After the election, our growth-at-right-price screen provides a sense check on fast rising shares.
AlphaScreens: GARP sense check after election boost

Boris Johnson's election triumph was a big boost for the shares of UK-focussed businesses. It's always good to assess fundamentals for longer term prospects of companies experiencing this sort of a bounce. Our growth-at-right-price (GARP) screen is a useful tool for assessing where there is underlying growth to complement the value premium for UK shares that has been unwinding since Friday. 

  • It’s interesting to follow the trend of a company’s performance against stock screens. Having scored full marks for the last couple of months, packaging specialist Macfarlane (MACF) now fails our forward earnings per share test.
  • Going in the other direction, insurer Legal &General (LGEN), improves from passing six to seven tests out of eight. Now it only fails the free cash flow test.
  • There are only seven tests for companies on the FTSE All Small Companies index. Leisure firm Ten Entertainment Group (TEG), which has been a big riser following the election, is amongst those scoring 7/7 on our screen.
  • On Aim, there are seven companies that get full marks on the small cap tests, including gold mining and UK infrastructure focussed businesses.

 

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