Join our community of smart investors

Quality shares Christmas Top of the Pops

The market pull-back may be an opportunity to top up on quality shares
Quality shares Christmas Top of the Pops
  • Regular quality screen toppers still do well as 2021 draws to a close
  • Aim market offers a whole raft of ideas for next year

In our final AlphaScreen before Christmas, several of the names that have done well on our quality UK shares criteria this year are flagged once more. Right at the top of the All Share screen, data business Experian (EXPN) still passes 9/9 tests, as does Hikma Pharmaceuticals (HIK), and IT network specialist Spirent Communications (SPT).  The quality characteristics of these companies makes them worth researching as long-term holdings and, with the softening of markets on fears the Omicron coronavirus variant will hit growth, cheaper entry points could be attractive.

Precious metal miner Polymetal International (POLY) also scores 9/9 and, with central bank policies now signalling the view that inflation will be persistent rather than transitory,  there is certainly a narrative to support the business.  The same cannot be said for the final FTSE All Share company to get full marks. Big tobacco companies were accorded pariah status even before environment, social and governance (ESG) became front and centre of investment decision making. Imperial Brands (IMB) offers an 8.8 per cent dividend yield and is rated on only six times next twelve months’ earnings. That’s food for thought, as investors are definitely being offered a risk premium. 

We have separate tests just for small companies and it is on the Aim market where our screens are flagging by far the most ideas. Miners feature prominently again with Pan African Resources (PAF) and Caledonia Mining Corporation (CMCL) getting full marks and ranking highly on a combination of margin and momentum.  Companies like Cerillion (CER) that are seeking to capture growth in demand for software innovations also do well. 

Our Aim screen Christmas number one is iEnergizer (IBPO) a software as a service (SaaS) solutions provider that has seen its shares spike upwards since November.

Download PDF