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Why the Mission Marketing share price (LON:TMMG) could have further to run

1st May '19 by Jack Brumby

Honing in on the measures that tell us what’s really going on can save us a lot of time and pain. At Stockopedia, we read through academic studies and backtest strategies to identify these key measures. One of the most promising we have found so far is Piotroski’s F-Score - and the F-Score has good news for shareholders of small cap Mission Marketing (LON:TMMG), which operates in the Consumer Cyclicals sector.

When you couple an attractive F-Score with a solid dividend yield (Mission Marketing is forecast to pay out 2.83%), it is an encouraging combination of income and quality - even when a share price has performed as strongly as Mission Marketing over the past year.

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Why we should pay attention to the Piotroski F-Score

Followers of celebrated accounting professor Joseph Piotroski are well aware of the checklist that made him famous at the turn of the millennium. Piotroski is behind the F-Score: a simple indicator to highlight stocks showing the most likely prospects for outperformance amongst a basket of neglected companies.

The great thing about the F-Score is that it is essentially an entire quality and fundamental momentum screen in a single number, succinctly summing up the financial health trend of a company. Applying it as a filter on top of almost any strategy can help to increase returns and reduce risk.

The F-Score is made up of nine checks split up into three main areas of financial analysis. First is profitability, where it examines operating profits and cash flow to make sure the business can sustain itself and pay dividends. Then come three checks on the capital structure of a business, followed by a final look at the firm’s operating efficiency.

Mission Marketing (LON:TMMG)'s F-Score: what does it mean?

Stockopedia applies algorithms to its stream of financial data to automatically calculate the Piotroski F-Score for every stock on the market. It shows that Mission Marketing (LON:TMMG) scores 9 out of a possible 9. 

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In his landmark academic paper "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers", Piotroksi showed that by investing in companies scoring 8 or 9 by these measures over a 20-year test period through to 1996, investor returns could be increased by an astounding 7.5% each year.

Find more high-quality stocks

This F-Score suggests Mission is a promising investment candidate and is worthy of further research - but it is only a first step. Higher F-Score stocks often trade at a premium compared to other stocks. Investors like to pay up for quality but it's important not to pay too much. We suggest checking the various value factor measures for Mission on the group's StockReport.

For years, the Stockopedia team have been poring over studies to see what works in investing. That's how we found the F-Score, but that's not all we've found... So take a two-week free trial today to see how Stockopedia can help you to build a better portfolio.

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Share Price
56p
Change Today
-1.75%
Mission ( )

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