Hunting for great quality European shares with the Screen of Screens

Friday, Apr 11 2014 by
10
Hunting for great quality European shares with the Screen of Screens

European stocks looked a risky bet in the aftermath of the European sovereign debt crisis but markets are now repaying investors who saw value in those battered shares. This week the pan-European FTSE Eurofirst 300 finally clawed its way back to a level last seen in May 2008. Early on in the economic collapse, confidence was hammered and equity prices sent spiralling. But anyone investing in the region over the past year or so could well have made a handsome profit, particularly in small caps. According to one of our best performing screens, there are plenty of opportunities still to be had.

Later this month we’ll notch up the first full year of tracking the European versions of our 66 GuruModel portfolios. Those screens have had the good fortune to be picking up shares at a time of rising confidence in European stocks. The Eurofirst is up over 11% since last April and smaller stocks have performed superbly. Over 1-year, MSCI’s Europe Small Cap Index was up by nearly 41% at the end of March (here).

Screen of Screens

In the recent quarterly review of strategies, it was growth and momentum that came out the big winners in the early months of 2014. But over the year one of the most impressive displays was seen on the Screen of Screens (here). This is a strategy that was a frequent topic of conversation on our stand at the recent UK Investor Show. It works very simply by highlighting companies that are passing the criteria for at least four (and in some cases up to 12) other long-only guru-inspired screens.

That sounds like a pretty unscientific approach to finding shares. Yet it has consistently proved to be one of the best performing of Stockopedia’s tracked strategies, both in the UK and Europe. In just over 11 months it has returned 58.5% (all screens are rebalanced quarterly at mid prices).

Part of the reason for this success is the screen’s tendency to find shares with strong blends of good quality, attractive value and positive momentum. This bubble chart shows where all 96 of the current qualifiers are positioned in terms of quality and value. It is based on Stockopedia StockRanks, which rank every company in the market from 1-100 on each factor using a blended combination of ratios and metrics. As…

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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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BB Biotech AG is a Switzerland-based investment company, which principal activity is to invest in companies active in the biotechnology industry. BB Biotech AG invests mainly in companies operating in such sectors as oncology, infectious diseases, cardiovascular diseases, metabolic diseases and autoimmune diseases. The Company’s portfolio comprises between 20 and 35 companies and includes such companies as Celgene, Actelion, Vertex Pharmaceuticals, Gilead, Novo Nordisk, Incyte, Isis Pharmaceuticals, Immunogen, Halozyme Therapeutics, Ariad Pharmaceuticals, Biomarin Pharmaceutical, Alexion Pharmaceuticals, Optimer Pharmaceuticals, Achillion Pharmaceuticals, Swedish Orphan Biovitrum, Dendreon, Bavarian Nordic, Lupin, Glenmark Pharmaceuticals, Strides Arcolab, Endocyte, Probiodrug, and Idenix Pharmaceuticals. more »

SWX Price
CHF66.05
Change
-4.8%
Mkt Cap (£m)
2,950
P/E (fwd)
7.6
Yield (fwd)
4.8

Dart Group PLC is a leisure travel and distribution, and logistics company. The Company is engaged in the provision of air travel organizer licensing (ATOL) licensed package holidays by its tour operator, Jet2holidays Limited, and scheduled leisure flights by its airline, Jet2.com Limited (Jet2.com). It distributes temperature-controlled and ambient products on behalf of retailers, processors, growers and importers in the United Kingdom. It operates through two segments: Leisure Travel, and Distribution & Logistics. The Leisure Travel business focuses on scheduled leisure flights by Jet2.com to holiday destinations in the Mediterranean, the Canary Islands and to European Leisure Cities. The Distribution & Logistics business includes the operations of Fowler Welch-Coolchain Limited, a distribution and logistics services provider. Its temperature-controlled operations are in Spalding in Lincolnshire, Teynham and Paddock Wood in Kent, and Hilsea near Portsmouth. more »

LSE Price
820p
Change
-0.8%
Mkt Cap (£m)
1,229
P/E (fwd)
8.6
Yield (fwd)
1.2



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5 Comments on this Article show/hide all

PhilH 11th Apr '14 1 of 5
1

MGI Coutier SA (EPA:MGIC) still looks good value with a fwd pe of 9, eps growth of 11%, a risk adjusted peg of 0.81 and psr of 0.6 plus increasing eps estimates. I'm sat on a 62% gain already and enjoying the ride.

Professional Services: Sunflower Counselling
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DJLJ23 13th Apr '14 2 of 5

Having just aquired the european information, i've been searching around and found Bavaria Industries AG (ETR:B8A), which is on a crazy cheap valuation, and has great momentum behind it, but very cheap usually means there is an issue, what i'm struggling with is where to find out what those issues are?
Only just started looking, but any thoughts?, may be there is an english language equivalent of shares or investors chronical for european shares.

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PhilH 13th Apr '14 3 of 5

Hi DLJL23,

Something is generally wrong when things look very cheap.
Having given the stock report a quick glance the thing that would screen me of of this stock is the 3m av vol which is very low. Following this thread you can see that there is only 6m shares issued. So I guess there's no real market which isn't good if you need to sell in a hurry if things get ugly.

I hope that helps.
Phil

Professional Services: Sunflower Counselling
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DJLJ23 13th Apr '14 4 of 5

Phil many thanks for your comments

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debsmac 6th May '14 5 of 5

In reply to post #82667

Wouldnt that be a great thing... have been looking for a publication specialising in european shares... but no luck yet. you just have to get good at your detective work. Maybe google it, that sometimes helps. I will have a look later if i can.

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