One of the hazards of building stock portfolios using screens is that the stocks which qualify change from day to day. Having taken a look at the Stock in Focus screen results on Monday night, I had a clear idea of the company I was going to write about on Tuesday.
Fast forward eighteen hours, and my choice has gone from the screen results. This highlights something that’s worth noting if you use Stockopedia’s Guru Screens (or indeed the SIF screen) to help guide your personal stock choices. The portfolios which are shown and tracked by Stockopedia aren’t likely to be the same as those you build, even if you use the same screen rules to select your stocks.
I don’t think this is a big problem. As the saying goes, There’s Always Another Stock. The nature of screening means that there’s no reason to think that a selection made this week will be better or worse than one made using the same rules next week. It will just be different.
This could be a good one
Despite being cheated out of my original stock, I’m quite happy with its replacement. Harvey Nash is a small-cap recruitment stock with a StockRank of 98 and apparently strong value credentials.
The group operates globally in three sectors, executive search, professional recruitment and outsourcing services. According to last year’s results, “80% of the Group’s clients, services and skills are in the technology and digital sector”. Given the sizeable operation in Vietnam, where it has 80 fee earners, I’d guess the client base includes major consumer electronics firms.
Operations span Europe, the Americas and Asia Pacific. However, 78% of gross profit came from the UK, Ireland and mainland Europe last year. So it’s clear that while the group does benefit from geographic diversity, the health of western European markets is important.
Last year saw revenue rise by 16% to £784.3m. This was an increase of 6% in constant currency. However, operating profit fell by 12% to £9.2m, a drop of 20% in constant currency. The company said this was the result of currency headwinds in Vietnam, and “weakness” in Hong Kong and Singapore. USA performance accounted for 17% of gross profit, but was hampered by bad debt write-offs totalling £1.5m.
Despite these pressures, the group’s cash…
