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Quality shares shake-out continues

As information filters in, re-ratings are occurring on our quality shares screen.
Quality shares shake-out continues

The shake out continues as investors struggle to decipher which shares are cheap, which are value traps and which former stalwarts of quality are going to take longest to recover.

  • Delays on companies reporting financial results and the different timings of trading announcements and profit warnings mean that not all data is available to our quality shares screen, but as numbers come in patterns are emerging.
  • Digital services firm Kainos (KNOS) is still one of the more expensively rated on the FTSE All Share. However, it passes all our other quality tests.
  • Consumer goods giant Unilever (ULVR) also only fails the PE ratio test, which is the same as its situation last month, but some other big companies have started to slip down our quality rankings.
  • Notably, drinks business Diageo (DGE) has gone from getting full-marks a month ago, to failing our forward EPS growth and price to earnings growth (PEG) tests. No doubt due to the impact coronavirus is having on its profits outlook.
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