Fortnightly Publication Highlighting Latest Insights From IRF Providers
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It feels like the SRP share price is increasingly an anomaly. This was a problem child but looks to have been fixed for a while now and the recent bout of big upgrades has been met with indifference. The consequence is an implied to Y3 EBITM ratio of just 37. Last time Willis Welby ran the numbers, they could still make this share price work at GBP 2.50. They can now make it work all the way up to GBP 3.00 - nearly double the current share price.
Edition: 177
- 12 January, 2024
Screening UK Stocks: Combining quality, momentum and expectations indicators
Methodology - the initial universe are stocks with $2bn+ M/Cap. After that Willis Welby starts with a quality cut off based on their measure of Intrinsic Return on Capital Employed. They then narrow down using a combination of share price momentum and EBIT revisions before incorporating their expectations analysis via their measure of the implied to Y3 EBITM ratio. This has been another month of low turnover for the UK screen and it is notable that stocks coming in are exclusively in Consumer Services with the return of three retailers (B&M, Pets at Home, WH Smith) and Flutter. The four stocks leaving are Burberry, IAG, Hikma and Serco.
Edition: 166
- 04 August, 2023
Seriously cheap UK mid caps
The median implied to Y3 EBITM ratio for Willis Welby’s UK coverage is now 68 for which you get median consensus Y3 revenue growth of 5.4%. And over the last three months the median move in Y2 EBIT is still an UPGRADE of 0.8%. The Q2 reporting season could be a rude wake up call, but so far, they cannot see the huge economic downturn that is priced into this part of their coverage. And if it does not materialise, then UK mid cap shares are seriously cheap. Industrials (Manufacturing & Support Services) look particularly interesting - highlights Coats, Morgan Advanced, Qinetiq, Hays and Serco. They also see decent revisions and a compelling balance of growth and expectations across Technology names such as Team17, Moneysupermarket, Auction Technology and Kainos.
Edition: 165
- 21 July, 2023