Quarterly Strategies Review: Growth stocks rock in Q3

Friday, Sep 13 2013 by
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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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 digital media company. The Company is engaged in the production and distribution of content across multiple devices and platforms, including television broadcasting and the sale of advertising airtime and space in the media. The Company focuses on its television and digital media businesses and involved in charitable activities. The Company's segments include Consumer and Productions. The Company's Consumer segment delivers content to attract mass audiences, which are sold to advertisers. The Company's Productions segment produces content for broadcast networks in the United Kingdom and overseas. The Company's subsidiaries include STV Central Limited, STV North Limited, STV Productions Limited, STV Glasgow Limited, STV Aberdeen Limited, STV Ayr Limited, STV Dundee Limited, STV Edinburgh Limited, Scottish News Network Limited, STV Publishing Limited, STV Out of Home Limited and STV Appeal Trading Company Limited. more »

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Staffline Group plc is a holding company, which is engaged in the provision of recruitment and outsourced human resource services to industry and services in the welfare to work arena and skills training. The Company has two segments: Staffing Services, which includes the provision of temporary staff to customers, and PeoplePlus, which includes the provision of welfare to work and other training services. Its Staffing Services focuses on providing complete labor solutions in agriculture, food processing, manufacturing, e-retail, driving and the logistics sectors. Its recruitment business operates from well over 300 locations in the United Kingdom, Eire and Poland. The Staffing brands include Staffline OnSite, based on clients' premises providing both blue and white collar, out-sourced, temporary workforces. Its Employability includes work program, prime contractor in over nine regions and sub-contracts in approximately five regions in England. more »

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  Is LON:STVG 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?



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Murakami 14th Sep '13 2 of 4

In reply to post #77248

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:


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matti69 14th Sep '13 3 of 4

Thanks Murakami

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Richard Goodwin 17th Sep '13 4 of 4

Interesting article. Thanks.

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About Ben Hobson

Ben Hobson

Strategies Editor at Stockopedia. My goal is to help private investors learn and invest with confidence through the articles, ebooks and other resources we publish on site. I also occasionally bunk off to interview famous investors at expensive restaurants. I studied History at Aberystwyth University, trained as a journalist and covered business news and corporate finance before settling in as one of the first staff members at Stockopedia.  Away from Stockopedia I'm a mountain bike junkie. more »


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