Can the Best Of The Best share price continue to outperform the market?

Stockopedia’s ‘High Flyers’ are the stock market superstars. These companies tend to be the ones that fund managers jostle and barter over. They are high quality, growing stocks with a history of beating estimates - and Best Of The Best (LON:BOTB)is one of them.

Best Of The Best is a micro cap stock in the Casinos & Gaming industry. When we analyse Best Of The Best from a factor perspective, we find that it has a Quality Rank of 99, a Momentum Rank of 75, but a Value Rank of only 38. This is the classic factor profile of a High Flyer.

A combination of high quality, high momentum and low value is great when earnings go up but a bad place to be when things go wrong. The higher they rise the harder they can fall, after all.

What kind of High Flying stock is ?

So, High Flyers tend to be riskier and more volatile than the market average. But is this true of Best Of The Best?

We can find out quickly by applying Stockopedia’s RiskRatings system, which splits the stock market into five buckets according to stock price volatility. The five classifications (from least to most volatile) are:

• Conservative (10% of the market)
• Balanced (15% of the market)
• Adventurous (20% of the market)
• Speculative (25% of the market)
• Highly Speculative (30% of the market)

Best Of The Best is a speculative stock. This means that the group is in the riskier part of the market. The fact that the group is on the smaller side, with a market cap of £28.1m, might further add to this volatility. That said, Best Of The Best has a positive one-year relative strength of 18.5%, meaning it has outperformed the market.

Not only that, but we can see from Best Of The Best’s above average five-year return on capital employed figure of 130.6% that the group has been highly profitable over multiple years. This suggests that Best Of The Best can back up its favourable factor exposures and volatility characteristics with some kind of economic moat.

Find the rockstars of the stock market

High Flyers are great stocks to have in your portfolio if you think you need more momentum or quality - just look out for signs that momentum might be changing. If you want to see which other stocks qualify as High Flyers, you can find a comprehensive list on Stockopedia's StockRanks page.

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