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Cyclical risks and reasonably priced growth

Growth at a reasonable price flags opportunities but beware pitfalls
Cyclical risks and reasonably priced growth
  • Growth at a reasonable price (GARP) screen throws up a company subject to controversy
  • Infrastructure and mining are two trends highlighted

Top of our large cap growth at a reasonable price (GARP) screen this month is sports fashion retailer JD Sports (JD), a perfect illustration of why screens alone aren’t a buy signal. The Competition and Markets Authority ruling it must sell Footasylum will surely see a serious revision of JD’s growth prospects.

A UK listed company with significant US exposure is plumbing and heating products distributor Ferguson (FERG). The passing of President Biden’s $1.2tn infrastructure bill could be good news for the business. 

Our Aim screen is topped by Central Asia Metals (CAML), a business with significant copper assets. There is  a strong long run bull case for copper but cyclical risks still exist.

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