'Build back better' momentum plays

Investors in expensive shares have two main causes to worry right now. Firstly, there is the prospect of central banks tightening the monetary policy taps, albeit cautiously. Second there is the constant threat that the Covid-19 pandemic has further stings in its depressingly long tail. 

Still, many of the companies that investors are backing to do well as the world builds back are still matching their share price momentum with earnings upgrade momentum. Plant and equipment rental business Ashtead (AHT) still passes all our Great Expectations tests, as does specialist waterpipe and climate management solutions company Genuit (GEN).  Waste management and recycling company Biffa (BIFF) also scores 8/8 against the screen. 

One company operating in an interesting 21st century growth  market is Airtel Africa (AAF), which makes its money from mobile voice, data and money services and targets the growing user base in Africa. As well as passing all our tests, it is still only on a next twelve month price-to-earnings (PE) multiple of 10, so isn’t expensive. Of course, there are plenty of risks investors need to check out to question why such an apparent growth play is also inexpensive, but it would certainly be an interesting company to research further. 

Moving from 21st century growth plays to 20th century stalwarts that have struggled to impress in recent years; analysts seem now to be more positive about Marks & Spencer (MKS). The retailer’s shares have been up by almost 20 per cent over three months and it passes all our tests here, too. 

On Aim, some of the momentum stories seem to be companies expected to do well out of energy recovery. These are speculation on timings, rather than trends, but may still interest more intrepid investors and shorter term traders. The shorter valuation multiples reflect the market's appreciation of the risks.