Quarterly Strategies Review: Growth stocks rock in Q3

Friday, Sep 13 2013 by
8
Quarterly Strategies Review Growth stocks rock in Q3

Screening strategies that hunt down growth shares at reasonable prices were by far and away the best performers of all 60 of Stockopedia’s GuruModel screens during the third quarter of this year. With the quarterly rebalancing of those models due this weekend, we’ve been reviewing the 3-month returns, and while it’s clear that growth strategies have been the big winners, there were also a few other surprising successes along the way.

Our GuruModel screens were last rebalanced in mid-June, shortly before some sharp falls in the value of the FTSE. Since then those declines have been clawed back and the index is currently up by around 11.6% so far this year (6,588 points at the time of writing). Perhaps the biggest news of the quarter was the rule change at the start of August that means investors can now buy AIM-quoted shares using tax-efficient ISAs. Unsurprisingly, this has had a major impact on the junior market , with the AIM-100 currently trading up by 7.7% since then (and up by 12.7% for the year). While impressive, that performance is still way off the pace of the FTSE Smallcap index, which has risen by a remarkable 22.4% in 2013.

After the rollercoaster for equity prices early in Q3, the summer turned out to be comparatively quiet but that didn’t stop many of our screens from producing some exceptional results. Overall, the composite performance of the GuruModels during the past three months has been an 11.0% return against a modest 4.6% for the FTSE. Click here to see how the screens stacked up.


Taking top honours was our pure Growth at a Reasonable Price (GARP) screen, which returned a stunning 25.2% during the quarter. The GARP screen looks for companies with a medium-term track record of earnings growth, robust return on capital, improving margins, share price strength and a reasonable valuation versus the sector. We couldn’t resist having a closer look at that performance recently (read about it here), which has been driven by a number of shares that have enjoyed some spectacular price rises. Among them is Scottish TV production and broadcasting company STV (LON:STVG), which has produced an 82% gain for the GARP portfolio since it was bought in June.

Another high flying stock in the portfolio (and a number of other…

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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STV Group plc is a United Kingdom-based company which is engaged in the production and broadcasting of television programs, Internet services and the sale of advertising airtime and space in these media. The Company is focused on its television and digital media business. The Company's segments include Consumer and Productions. Its Consumer segment delivers content to attract mass audiences which are sold to advertisers to generate revenues. The content is delivered across multiple platforms, including digital, terrestrial, cable and satellite, online and through connected devices, such as games consoles and Smart televisions (TVs). Its Productions segment produces content for broadcast networks in the United Kingdom and overseas. Its subsidiaries include STV Central Limited, STV North Limited, STV Productions Limited, Solutions.tv Limited, Ginger Television Productions Limited and STV Glasgow Limited. more »

Share Price (Full)
435p
Change
-3.3%
Mkt Cap (£m)
176.8
P/E (fwd)
10.5
Yield (fwd)
2.7

Kentz Corporation Limited is a United Kingdom-based engineering solutions provider company. The Company is engaged in the provision of engineering and construction services and technical support services, principally in the oil services sector. The Company operates through five segments, which include Middle East, Far East, Africa, Australasia and Americas. The Company’s business units are Engineering, procurement and construction (EPC); Construction, and Technical support services (TSS). EPC unit offers a range of engineering and construction services. Its construction unit is engaged in the provision of structural, mechanical, electrical, instrumentation and piping services. TSS unit offers offer a range of services, including remote construction services, commissioning and completions, general support services and shutdowns and turnarounds. more »

Share Price (LSE)
n/a
Change
 
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a

Staffline Group plc is an outsourcing company. The Company is engaged in provision of recruitment and outsourced human resource services to industry and services in the welfare to work arena and skills training. The Company's operating segments include the provision of temporary staff to customers and the provision of welfare to work and other training services (Employability). It provides managed workforces to the logistics, e-retail, manufacturing, driving, agriculture, food processing and support services sectors in over 250 locations in the United Kingdom, Eire and Poland. The Employability segment includes the Avanta and Eos brands and Government contracts, which offer Work Programme, a contractor in four regions in England; Steps to Success, a contractor in Northern Ireland; Youth Guarantee (MyGo Centre), and Ministry of Justice Transforming Rehabilitation in Warwickshire and West Mercia. The Company also provides training services through Elpis, Learning Plus and Skillspoint. more »

Share Price (AIM)
1260p
Change
-3.7%
Mkt Cap (£m)
363.2
P/E (fwd)
11.2
Yield (fwd)
1.9



  Is STV fundamentally strong or weak? Find out More »


4 Comments on this Article show/hide all

matti69 14th Sep '13 1 of 4

Hi Ben

To which 'investing cycle' are you referring?

Cheers

Matt

| Link | Share | 1 reply
Murakami 14th Sep '13 2 of 4

In reply to matti69, post #1

Re: the investing/investment cycle, and how that interacts with the economic cycle, see the diagram at the top of page 3 of this PDF:

http://www.arnhem.com.au/wp-content/uploads/2012/10/ARNHEM_Time-for-Growth-Investing_Online.pdf

| Link | Share
matti69 14th Sep '13 3 of 4

Thanks Murakami

| Link | Share
Richard Goodwin 17th Sep '13 4 of 4

Interesting article. Thanks.

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About Ben Hobson

Ben Hobson

Strategies Editor at Stockopedia. Writer, Editor & Investment Strategies Analysis. Test driving and telling the world about the awesome stock market investing tools and resources at Stockopedia. Helping Stockopedia subscribers take control, invest with confidence, beat the market and sleep soundly at night. more »

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