This week we took a look at how every sector in the market currently stacks up against Stockopedia StockRanks. StockRanks are the multi-factor calculations we use to establish where in the market every company ranks for financial and business quality, valuation, and price and earnings momentum. You can read much more about how StockRanks work here.
Comparing sectors using StockRanks is fascinating because it can highlight hotspots in the market where pockets of broadly similar companies show high or low potential as investments. But it’s worth remembering that because some sectors contain many more stocks than others, further investigation is always needed.
Consumer cyclical sectors like household goods and speciality retailers came under huge pressure during the recession as sales fell away and investors turned to defensive plays. But evidence that growing consumer confidence is getting the tills ringing again means that these sectors are gaining appeal. But how do you decide which shares are worth a closer look?
Household goods bounce back
With an average StockRank of 82/100 (100 being best) the unpopular household goods industry tops the list of high ranking StockRank sectors. Here, shares like tableware manufacturers Churchill China and Portmeirion, and carpet and floor covering companies Victoria and Headlam all have StockRanks over 95.
Churchill China, which supplies both the hospitality and household markets worldwide, reported recently that trading in the year to July had been very encouraging against strong comparatives. Its QualityRank has jumped from 64 to 95 since January and you can see from the broker chart that analysts have been upgrading their EPS forecasts all year (to 26.5p).
Floorcovering distributor Headlam has seen its share price fall from 478p to 410p since early May but the impact has been to bump up its ValueRank from 62 to 73. Over the same period, analysts have upped their EPS forecasts for 2014 by 4p to 27.8p. Another consequence of the share price correction is that the company’s forward dividend yield has edged up from 3.2% to 3.9%.
Retailers cash in on confidence
With a median StockRank of 71/100, speciality retail also ranks highly among market sectors. There are some very wide variations in individual ranking scores among the stocks but no shortage of very high achievers. With a rank…
