Records have been broken. The FTSE 100 hit 6958.89 points towards the end of trading on Tuesday, after the Eurozone agreed to extend Greece's bailout programme by four months. The index then went on to close at 6,949.63 points - higher than the FTSE's previous closing record (6930) which was set back in December 1999. Perhaps the market is getting expensive, but as every wood is made of individual trees, the stock market is made of individual stocks, and Stockopedia's GuruScreens are a useful tool to hone in on potential investment opportunities. Let's take a closer look...


Is the FTSE expensive?

Before analysing individual companies, let's address a question that must be on everyone's mind. Is the FTSE 100 getting expensive? The index has not reached these lofty heights since the peaks of the 'Dot Com' bubble - and we all know how that ended. The Footsie's P/E ratio is currently 18. How does this compare against historical trends? The FTSE's P/E ratio was higher than 25 during the 'Dot Com' bubble, and above 20 on the eve of the market crash of 1972. That being said, the FTSE's long-term P/E average has been 15 since the late 1960s, so perhaps the market could be getting expensive after all (see image - Source:  The Telegraph).


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It is interesting to note that although the market may be getting frothy, nearly half of the FTSE 100 companies qualify for at least one GuruScreen, as you can see from this screen. Let's look at two companies in closer detail.

Mondi (MNDI)

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Mondi, the paper and packaging group, currently qualifies for Stockopedia's Lakonishok Screen, which aims to identify under-valued, out-of-favor companies just at the point when the market is starting to recognise them. Mondi has beaten the market by more than 20% this year. What is driving the share price higher? Today (24 Feb) the company recommended increasing its dividend by 17% to 42 euro cents. Is the company well placed to pay this dividend? The company today reported that pre-tax profits had increased to €619m in 2014, up from €499m in the previous year. This growth has been supported by rising packaging paper sales and lower…

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