Over the last year, financials have appreciated by around 10% while the FTSE 100 has remained relatively flat. This is partly because demand for credit becomes strong as the economy picks up and banks in particular tend to do well as a result. Against this background, this week we take a look at some of the financial companies that have moved up in the StockRanks over the last two weeks, showing their credentials as good, cheap, improving stocks.
QVM Movers
Old Mutual (OML) is an international long-term savings, investment and protection company. The company has an improved QVM StockRank this week. Seven days ago, it was 86. It is now 91.
This is underpinned a very good ValueRank (92). Stockopedia’s traffic lights for Old Mutual are showing a lot of ‘green’, indicating that the company is cheap (‘yellow’ being moderate and ‘red’ expensive). The firm has a low Price to Sales ratio (0.5), Price to Free Cashflow ratio (3.63) and a Price to Book ratio (1.3) that is cheaper than the market average.
The company also has a high QualityRank (73). Old Mutual’s high Piotroski-F Score is a key factor here. A high Piotroski score indicates that a company enjoys good fundamental momentum in the sense that it is becoming more profitable, productive and is in an improving financial position to service debt. Old Mutual’s Piotroski score is 7.
This reflects the fact that Old Mutual’s emerging-market unit, which focuses on Africa, grew adjusted operating profit by 12%, while in the US asset management arm, total assets under management jumped by nearly 20%. Furthermore, the firm has a MomentumRank of 68, as the broker consensus has moved further towards ‘buy’ recently.
Quality Value Movers
Amlin (AML) has moved from having a QV rank (which blends quality with value) of 82 last week to 91 this week. The company is engaged in non-life insurance and reinsurance underwriting in the Lloyd’s market. Amlin is cheap against what the company earns, with a forward PE ratio of 11 and also has a forecasted dividend yield of 5.84%, which is higher than 91% of the market. The company’s overall ValueRank is 93.
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