The FTSE All Share index has started 2020 positively and, as some of the recent gains for shares highlighted in our quality screen shows, investors are not shying away from good companies just because they're expensive by historic standards. This interpretation ignores that the UK market was undervalued compared to international peers, especially when exchange rates are considered. So maybe the success of the quality strategy has further to run.
- IT services business FDM Group (FDM) tops our first FTSE All Share quality screen of the year. Larger companies that also pass 9/9 tests include high-end fashion house Burberry (BRBY), Spirax-Sarco Engineering (SPX), equipment rental firm Ashtead (AHT), drinks giant Diageo (DGE) and publishing, data and events business RELX (REL).
- These names have been by-words for quality long-term investments and several have seen their shares make double-digit gains in the past three months, representing the popularity of quality strategies.
- Further down the scale, our small-cap only screen is still highlighting entertainments business Hollywood Bowl (BOWL) and food products specialist Devro (DVO).
- On the Aim market, four more smaller firms pass all our quality tests. Of course, when looking at these companies, the quality screen is just a first step in a potential investor’s due diligence but doing well against the criteria makes for a promising start.
