- Spot the difference between re-rates and growth.
- How much more can be juiced from efficiency?
As stock markets try to make sense of an unpredictable economic backdrop, and are showing signs they will treat bad news as bad news, it is difficult to pick stocks based on linear momentum. Some of the earnings upgrades seen in recent months are possibly due to recoveries or changing baseline assumptions, rather than confidence of more to come.
As when we last ran this share price and earnings momentum upgrade screen in early August, the UK large cap screen is led by Rolls-Royce (RR.) and Marks & Spencer (MKS), two companies reaping the benefits of sound management strategies. Although these may now be shares best bought on pull-backs (or existing shareholders could add to positions carefully through value averaging) rather than diving in at current valuations. They are joined by Admiral (ADM), although the cyclical vagaries of investing in insurance should be allowed for, as Alex Newman discusses in our recent Big Read, here.
