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Hi,
If you're interested in companies that grow consistently over time, I've been working on a simple way to quanitfy that consistency into something useful.
I recently wrote about Sainsbury's and mentioned that it had a 'quality rating' of 2 out of 10. That didn't seem quite right, so I've fleshed it out a bit more. You can read about the full version in this week's post:
How to find the best high yield shares
And Sainsbury's has a quality rating of 5.2 with this updated approach, which seems far more sensible.
This week's 5-star stock review is...
Premier Farnell
This FTSE 250 listed company focuses on providing components, software services and tools to electronic design engineers. It's market cap is about £650m, and it operates in more than 35 countries with over 4,000 employees.
Why highlight this company? Well, of course first of all it scores 5-stars on my rating screen, which can be broken down into:
PE10 = 12.3
Long term earnings growth 4.2%
Current yield = 6.6%
These were when I last ran my rating software, and at that point the price was 159p. It has since gone up to 175p, so the PE and yield are slightly different today.
My quality/consistency rating for the company is 6.4 out of 10. Full marks for profit and dividend consistency, but let down somewhat by a lack of consistent growth.
So on initial analysis this company offers a yield around 6%, with some growth over time, perhaps around the rate of inflation, with consistent profits and an unbroken dividend history with no cuts in at least 10 years.
To me that sounds like a company with a reasonably stable intrinsic value and a good steady yield, both of which can make timing entry and exit points much easier.
That's all I have to say for today. I hope you have a nice weekend, and if you want to get in touch just reply to this email.
Best wishes,
John
If you're interested in companies that grow consistently over time, I've been working on a simple way to quanitfy that consistency into something useful.
I recently wrote about Sainsbury's and mentioned that it had a 'quality rating' of 2 out of 10. That didn't seem quite right, so I've fleshed it out a bit more. You can read about the full version in this week's post:
How to find the best high yield shares
And Sainsbury's has a quality rating of 5.2 with this updated approach, which seems far more sensible.
This week's 5-star stock review is...
Premier Farnell
This FTSE 250 listed company focuses on providing components, software services and tools to electronic design engineers. It's market cap is about £650m, and it operates in more than 35 countries with over 4,000 employees.
Why highlight this company? Well, of course first of all it scores 5-stars on my rating screen, which can be broken down into:
PE10 = 12.3
Long term earnings growth 4.2%
Current yield = 6.6%
These were when I last ran my rating software, and at that point the price was 159p. It has since gone up to 175p, so the PE and yield are slightly different today.
My quality/consistency rating for the company is 6.4 out of 10. Full marks for profit and dividend consistency, but let down somewhat by a lack of consistent growth.
So on initial analysis this company offers a yield around 6%, with some growth over time, perhaps around the rate of inflation, with consistent profits and an unbroken dividend history with no cuts in at least 10 years.
To me that sounds like a company with a reasonably stable intrinsic value and a good steady yield, both of which can make timing entry and exit points much easier.
That's all I have to say for today. I hope you have a nice weekend, and if you want to get in touch just reply to this email.
Best wishes,
John
