A wealth of academic and guru literature advocates that stocks which rank well in terms of quality, value and momentum (QVM) tend to beat the market. Indeed, Stockopedia’s mantra is that good, cheap, improving stocks generally outperform expensive, deteriorating, junk. This stuff isn’t rocket science. Accordingly, our StockRanks grade companies on a scale of 0 to 100, with good, cheap, improving stocks scoring the highest.

In light of this, we are initiating a regular column to track stocks which have jumped, or dropped, in the StockRanks. This column should constitute a starting point for further DIY research and will help investors keep on top of changes to the StockRanks.

 

 

Telford Homes goes through the roof

On 28 May, Telford Homes (TEF) announced preliminary results for the year ending 31 March 2014. Since then, the company has climbed in the StockRanks by 19 points - from 80 (29 May) to 99 (5 June).

This is driven partly by growth in the operating margins, which have doubled from 7.4% (2013) to 15% (2014). Telford is indeed an improving, cyclical stock riding the wave of growth in the housing market. It is more profitable than last year, and the firm is improving its ability to pay both long and short term debt. The firm has therefore earned a Piotroski F-Score of 7 and a quality rank of 94.

In terms of momentum, Telford has a rank of 88, having beaten the market by 26.7% over the last year. The company also has a forward P/E ratio (10.8) in the lowest 23% of the market, coupled with a low PEG (0.6) - giving an overall Vaue Rank of 87.

DCC jumps 31 points

DCC is another company with a soaring StockRank. The firm is engaged in the businesses of sales, marketing, and distribution. In late May, it had a rank of 67. This has now climbed to 98. DDC’s momentum score (95) is an important underpinning of this trend. Since 21 May, the share price has climbed 9% after DCC released results for the year ending 31 March 2014. The company now has a 1yr relative strength of 31%.

This momentum is a likely response to the company’s improving quality. DCC has a Piotroski F-Score of 8,…

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