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19 June 2022
By Maynard Paton
Difficult market conditions for highly-rated ‘quality’ shares have prompted further back-to-basics filtering.
Hence a new screen to identify companies offering robust financials, respectable growth, useful director ownership… and a reasonable valuation.
The exact filter criteria I employed for this search were:
- Net borrowings less total leases of no more than zero (i.e. a net cash position excluding IFRS 16 lease obligations);
- An operating margin of 20% or more;
- A five-year uplift to operating profit of at least 50%;
- Management owning at least 10% of the company, and;
- A forecast P/E of 20 or less.
I applied the screen the other day and SharePad returned 17 matches:
I selected IntegraFin because:
- The £1 billion market cap was among the largest on the list;
- The operating margin was a remarkable 78%, and;
- The shares had dropped 49% from their five-year high.
Let’s take a closer look.