Good afternoon, and welcome back if this is the first article you are reading after coming back from your summer vacation.
To help investors catch up on market movements over the last few weeks, we take a look at three companies that have moved up the StockRanks recently: Reed Elsevier (REL), Greggs (GRG) and Circle Oil (COP).
Reed Elsevier
Reed Elsevier (REL) is a multinational publishing and information company. A combined strategy of expanding into new markets, while investing in global technology platforms, has helped the company grow its earnings each year since 2010. This trend was also supported by the firm’s shift away from print, towards digital media.
Indeed, the company enjoys strong fundamental momentum across the board. The ROCE - which many investors use to judge a company’s competitive advantage - has risen each year since 2008, and now stands at 70% - higher than 99% of the market. The company is Europe’s biggest publishing group, well placed to enjoy economy of scale advantages. The company also owns strong brands, including the New Scientist and Estates Gazette.
Reed Elsevier reported first-half results that were ahead of analysts’ expectations in July 2014. This has helped the company’s share price beat the market over the last month, and Reed Elsevier now trades within 1% of its 52 week high. The double-whammy of price momentum and earnings surprises give Reed Elsevier a high MomentumRank (92). Nevertheless, the company trades with a P/E ratio of just 13 - well below the FTSE 100 average (18).
When quality, value and momentum are blended together, the company has an overall StockRank of 92, up from 81 last week.
Greggs
If you like meatpies, Greggs (GRG) is selling 300 calorie sausage rolls for 80p as part of their new low-calorie selection. This seems to be part of Greggs’ approach towards making pasties and sausage rolls more attractive for people trying to control or perhaps lose some weight. The company launched a turnaround plan last summer, introducing longer opening hours and a wider range of coffee and breakfast options. In addition, the number of new store openings declined and existing outlets were revamped.
Is this strategy paying off? Greggs has a Piotroski score of 8 out of 9, indicating that the company has…
