StockRanks USA - Upgrades And Downgrades - September 5th

5th Sep '14 by Rupert Hargreaves

7 comments 8865 reads

I have been interested in American stocks for several years now. Those of you who have read my blogs elsewhere will know that I have a particularly keen interest in hunting out value within the market. So I hope that readers will join me as I take a look at US stocks which have moved up, or dropped down in the StockRanks over the last few weeks. This promises to be an interesting project. The American bull market has been going on for some time now, but as Joel Greenblatt once said: “there always have to be stocks that rank at the top”. So lets explore whether the StockRanks can help to isolate stocks that have good quality, value and momentum credentials.

CDI

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After releasing its second quarter results on the 6th of August, integrated engineering and technology services company, CDI leapt up the StockRanks by 35 points over the last month - from 58 (6 August) to 93 (5 September).

CDI's second quarter results showed that the company's revenue expanded by 7.9% year on year. Operating profit and diluted earnings per share rose 34.6% and 29.4% respectively. The group was able to achieve these results after it experienced strong demand for its services from the aerospace, as well as, oil and gas industries.

The market has responded positively to these results. Since releasing its interim results, CDI has jumped by around 9%, beating the market by 8%. Accordingly, the company’s MomentumRank has jumped to 76.

The company has a ValueRank of 94 with a price to book ratio (1.1) in the cheapest 15% of the market. CDI's price to sales ratio (0.28) is in the cheapest 10% of the market and the company's enterprise value to earnings before interest, taxes, depreciation and amortization ratio currently stands at 8.3, compared to the market average of 13.3.

CDI's quality rank sits at 69 as the company's return on capital (7.3%) is similar to the industry average (7.4%). The company has a high quick ratio of 2.9 and a Piotroski F-Score of 5.

Spartan Motors

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Spartan Motors (SPAR), manufacturer of heavy-duty custom vehicles, was another company rising up the StockRanks after reporting a strong second quarter. Spartan jumped up the StockRanks by 26 points following this news. The most likely reason for this rise was the…

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grout123

6th Sep '14

Great article. The issue I have with upgrading my account to see coverage of overseas stocks is that my broker takes the complete mickey when it comes to transaction costs. Inflating the transaction cost by adding 3-5 cents onto every trade when converting the currency. I am immediately down 3-5%…. Its extortion by any other measure however they justify by saying they are competitive compared to their peers. All crooks to my mind but nothing I can do about it. Do any other readers have a view on where it might be cheaper to trade overseas shares?

Rupert Hargreaves

Hi grout, personally I use saxo bank to trade U.S. equities, their exchange rate is around 0.5% and it's around $10 commission per trade.

Ben Hobson

Hi grout,

Ahead of launching the new US data service we investigated brokerage costs - and particularly forex fees.

We contacted all the main brokers (and some of the smaller ones) and you're absolutely right, there are some shocking deals around. But it is possible to dodge some of those charges if you shop around.

We've devoted a chapter to brokerage and forex fees in our free guide, Getting Started in US Shares. There are some suggestions in there for how to duck high charges (and which brokers charge the most (and the least)). You can download it from the Stockopedia book store here: http://www.stockopedia.com/books/ - the brokerage stuff starts on page 44.

Hope that's some help.

Ben

michael john brown

7th Sep '14

I like your commentary/upgrades on stokopedia rankings and would like to follow...but I do not like being on twitter etc,will your news/commnetary /observations all be on stockopedia.
Kind Regards,
Michael Brown

Andrew L

8th Sep '14

Ben, Rupert, Interesting article and I have just read this Getting Started in US Shares report.

FX - Yes there are cheaper brokers like Saxo Bank but these often don't offer SIPPs or ISAs. So effectively you are left with Share Centre which has a low FX but has a limited service in terms of times and only does CDI's or you go for one of the others. Pretty much all the other major firms which offer ISAs have an FX charge of 1%. This probably isn't a killer given the lack of stamp duty but and tight spreads but should be borne in mind. I.e. losing at least 2% on any complete buy and sell so would want to own the shares for a fairly long time. With the spread on top you could be losing 2-3% for a complete transaction.

US stocks outperformance - the report on US stocks didn't really ask why they outperformed in my view. I think sector exposure is a key determinant. So UK market has large exposure to bad sectors (banks & resources). By avoiding these you could help mimic the performance of US stocks.

US ETF alternatives - US stocks report didn't seem to mention the opportunity cost of going into US stocks direct. I.e. an S&P 500 tracker from say Vanguard which has an on-going fee of 0.07%. I think UK investors really need to determine if they have a better shot than a tracker before buying US stocks direct.

Familiarity - US stocks report perhaps also should of mentioned that although the large US stocks are familiar the mid and smaller ones are unlikely to be so to UK investors.

NYSE Euronext - US stocks report says that the the NYSE is operated by NYSE Euronext. That isn't case. NYSE was bought by CME Group which then IPO'd Euronext with it now listed in Europe.

Andrew

Alex Naamani

Just FYI guys, this website - The International Investor, http://bit.ly/1Bmab3C - provides a useful comparison of charges across different brokerage services. I hope this helps. Best, Alex

whoops..that should say NYSE was bought by Intercontinental Exchange Group

StockRanks USA - upgrades and downgrades - September 5th

CDI

Spartan Motors

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Rupert Hargreaves

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