Britain heads into another lockdown on Thursday and winter looks like it's going to be miserable. Some companies' share prices aren't expensive relative to growth forecasts. However, the reality businesses face on account of the virus should be at the forefront of any investment case.
- The purpose of our growth at a reasonable price (Garp) screen is to identify good value shares in companies that bear the hallmarks to suggest they will achieve profit growth. Basically, it’s about avoiding value traps but thanks to Covid-19, investors also need to throw in a huge dollop of common sense when interpreting the results.
- Once again Hikma Pharmaceuticals (HIK) and Computacenter (CCC) top the pile and both companies have business models that are not only resilient to the effect of Covid-19, they can grow in the pandemic.
- The same can’t be said for some other companies that score well on the screen. For example, buying recruiter Page Group (PAGE) would be incredibly contrarian right now, especially as there is no need to rush picking potential rebound stocks.
