Rankings: UK 350 Report

There are 13 stocks awarded a 1st decile ranking within the Consumer Cyclical sector. The next sector holding the most 1st decile stocks is Financial with three, followed by Industrial and Technology both with two. Basic Materials, Communications and Utilities are represented with one stock. Only Energy was unable to get a stock into the top rank.

Steven Albrecht on March 16, 2018

European Markets –UK 350 Report

Rankings are segmented into several major categories designed to assist the investor in focusing on a global, regional, country, sector or individual stock. This report will provide insight on the UK 350. For complete details on the UK 350 individual stock rankings please reference the data on our site, www.investment-strategy.info. (MENU: Client Service > Rankings > Europe > UK 350 – Composite) The Rankings: European Markets – UK 350 Report will be posted monthly. Mid-month postings may occur between monthly reports if there is a meaningful change in the overall ranking positions.

Rankings are derived using six fundamentally important factors that create a profile for each company. The profile is unique in that it can be used to rank a stock or market from any part of the world to any other stock or market. The six factors used to create the ranking are:

  1. Sales growth
  2. Earnings Per Share
  3. Dividend growth
  4. Price Earnings Ratio
  5. Yield
  6. Price Earnings Growth

Additional qualifying measures of data reliability are applied to the six factors. Sales growth, EPS and dividends reliability is measured over several time periods and applied to create a qualified sales growth, EPS and dividend growth value. The PEG factor is measured on a median basis rather than an average, avoiding heavily skewed ranking distortions.The six qualified factors are then used to determine an overall ranking and reported as the UK 350. A sample of the ranking report is shown in Figure 1. The stocks are ranked using the six factors mentioned earlier from 1 to 100. The rankings fall into deciles. The first decile is the most desirous and the tenth decile, the least promising.

Within the market are ten sectors that cover the globe: Basic Materials, Communications, Consumer Cyclical, Consumer Non-cyclical, Diversified, Energy, Financial, Industrial, Technology and Utilities. Figure 2 is a pie chart showing the representation of each sector.

Within Britain, Financial is the largest sector at 26%. The next two largest sectors are both consumer related, Cyclical at 20% and Non-cyclical at 19% representing a combined 39%, 9 percentage points than the world overall.

It is always interesting to see if the 1st decile stocks within a market mirror the overall market distribution, or does one sector become favored. At this point in time, within the 1st decile ranking, Consumer Cyclical stocks represent the dominate position at 54% followed by Financials at 13% (See Figure 3). Consumer based stocks represent a combined 58% of the UK-350 when only the 1st decile is considered which is nearly a 20 point higher level than the overall sector segmentation weight. This sector has a dominate position at this point in determining overall performance. Financial stocks represent 13% of 1st decile stocks, but hold a 26% overall market weight. Energy does not have any representation in the 1st decile segmentation.

The stocks that created the strong weighting within the 1st decile ranking for the Consumer Cyclical sector is shown in the tables that follow.

Posted by Steven Albrecht

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