The results of the Growth at a Reasonable Price (GARP) screen continue to illustrate the problem facing investors right now - how much credence to place on a company's earnings forecasts. Given the damage caused to the global economy by covid-related shutdowns it is little surprise that most of the companies screened which pass all but one of the screen's tests are falling down on EPS growth.
- Indeed, across the whole market only one company passes all the tests with Hikma Pharmaceuticals (HIK) coming out top of the pile among the FTSE AllShare once again.
- Notable among the larger companies is a cluster of retail stocks - B&M European Value (BME), Card Factory (CARD), JD Sports (JD.) and Next (NXT) - who all appear in the top 10 albeit having failed two of the eight screen tests
- On Aim we see the resurgence of mining stocks with Serabi Gold (SRB), Trans-Siberian Gold (TSG), Anglo Asian Mining (AAZ) and Sylvania Platinum (SLP) occupying the top four slots. All failed one test of the screen, with forward EPS growth the culprit for the first three stocks.
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