- Eight FTSE All Share companies pass all our momentum tests
- On Aim 10 companies score 8/8 on the share price and earnings upgrade criteria
Even central bankers have now bought into the narrative that inflation is moving higher for a sustained period and is not merely transitory. This means that momentum screens need to be viewed cautiously, as many of the companies carrying over momentum from 2021, could face headwinds to earnings potential this year. The prospect of higher interest rates will make investors reassess what should be paid for growth stocks.
The FTSE All Share screen is topped by Airtel Africa (AAF), a growth play on the rapidly expanding African telecommunications and internet market.
Next on the list, however, is wealth management firm St. James’s Place (STJ). Another investment management firm to rank highly is Investec (INVP). These businesses may benefit from the immensely complex investment landscape in 2022 encouraging wealthy individuals to seek out advice.
Lloyd’s Banking Group (LLOY) would be expected to benefit from interest rate hikes that are anticipated in 2022 to combat the rise in inflation. Should the economy strengthen, too, as the UK emerges from the omicron wave of coronavirus (with a new dose of natural immunity on top of the vaccines), then the outlook may well be rosier for the lender.
On Aim, Lok’nStore Group (LOK) is an interesting screen topper. The company supplies self storage solutions to individual and business customers and on the back of strong demand and improving cash flows it has grown its dividend. In an inflationary environment such companies with fairly solid business models, in an industry with high barriers to entry, and a rising payout can attract positive sentiment.Download PDF