Tuesday 24 August 2010

FTSE Allshare Low P/E Growth Companies

The table above comprises a list of companies that appear to be cheap in comparison to earnings and are also profitable and are expected to grow. The list has been put together from companies in the FTSE Allshare index. The criteria that had to be matched and resulted in the list is shown below.

• Projected Price/Earning                                   < 12
• Projected PEG (Price Earning/Growth)            < 0.8
• Projected dividend Yield                                  > 3%
• Net Gearing Excluding Intangibles                    < 50
• ROCE (Return on Capital Employed)              > 10%
• Current Net Asset Value/ Price                        > 0.2

All of these companies are expected to grow their earnings per share over the next 3 years. Man Group Plc, the investment management company, is expected to grow its profits and report EPS of 35P for the year end 01/03/13, this would put the company on a P/E ratio of under 6 at its current price. At this price that would result in a dividend yield for that year of nearly 9%.


Game Group Plc, the specialist video game retailer, is expected to report for year end 01/01/13 earnings results that almost match its results from 31/01/08. Back when those results were published the company was trading at 200p, it is now trading around 67p. At this current price the company will be on a P/E of just above 4 if analyst’s expectations are correct for the next few years.

Some companies on this list have issues and that is why they appear to be cheap. BP Plc as everyone knows has had some problems recently which have made it look quite cheap. But this is due to the uncertainty about its performance in the future. As always investors should do their own research as a company may appear cheap but it may be due to a valid reason.

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