Stephen Bland runs a value screen for the FTSE 250 index.
Following on from last week's mechanical trawl of the FTSE100 for value, I'm repeating the exercise this week on the 250 index.
I usually feature the job on both these indices in successive weeks, the last time for the 250 being in January this year. Same idea exactly but on the market's mid caps.
Similar precautions apply about the potential errors of the database I used and that Price/Book includes all assets and not just the value player's far more desirable, and more conservative, tangible asset version.
As always we're looking for multiple appearances plus possible indications, as signalled by the ubiquity of their members here, of whole sectors that have been given a kicking and which consequently may be ripe for investigation.
The reason it may be worth noting sectors is that it is possible that decent value may be lurking amongst some of their constituent shares that don't feature in these tables. They may be just outside or simply missed by the shortcomings of the database I used.
Top Ten Yields
Ten Lowest P/E
Ten Lowest P/B
| | Price | P/B |
|---|
| Enterprise Inns | 85 | 0.30 |
| Punch Taverns | 75 | 0.33 |
| Barratt (LSE: BDEV) | 116 | 0.38 |
| Daejan (LSE: DJAN) | 2,798 | 0.58 |
| Home Retail | 211 | 0.62 |
| Laird | 140 | 0.64 |
| Taylor Wimpey (LSE: TW) | 38 | 0.67 |
| Catlin | 401 | 0.67 |
| F&C Asset Mgmt | 81 | 0.75 |
| Thomas Cook | 156 | 0.76 |
A triple for Thomas Cook
And we have one winner, well-known holiday business Thomas Cook Group makes the triple. Not that I'm attributing any value merit to the fact that it's well known, it's just that it is.
There are a number of doubles. Insurance business Beazley is in the yield and P/E tables whilst another in this sector, Catlin Group, a triple last time round in January, is in the yield and P/B tables. Also in those two tables is Argos catalogue retailer Home Retail which was the second of the two triples in January.
Featuring in the P/E and P/B tables are the pub chains Enterprise Inns and Punch Taverns which actually top both lists. Also in both of these is electronics supplier Laird and fund manager F&C Asset Management.
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Any cheap sectors?
The sector situation doesn't reveal any overwhelming presences.
The strongest is insurance, just as it was in my examination of the 100 index last week, with four different shares in the sector making various appearances.
Property based businesses figure too, with the two aforementioned pub groups plus housebuilder Barratt Developments and real estate share Daejan Holdings, both the latter as you might expect showing up in the P/B list.
There's a smattering of retail here with Home Retail and Dixons. No other sectors feature multiple appearances, the rest of the shares being a variety of different businesses.
Top for yield
Top of the yield list by a long way with outrageous figures, but with no other shows here, are the two Cable & Wireless companies. They cause repeated confusion by having such similar names after the break up of the old C&W last year. I wonder what bozo thought that one up. Probably got promoted for his contribution. I hardly know which is which and I've got one of them in the value portfolio.
The question for investors in either or both of these two shares, if attracted by their yields, is whether the dividends are sustainable over time. A minor cut is forecast for C&W Communications but not enough to put them on a significantly less high, high yield.
C&W Worldwide though has dividend increases forecast. Be aware that analysts' forecasts can and do go wrong.
In summary
So what can we conclude? Is Thomas Cook a value share? It's cheap as indicated by its triple showing here but that don't mean at all that it is offering value. I leave people to draw their own conclusions because this article is essentially just a mech trawl designed to throw up ideas for value investors to investigate further.
On sectors, insurance continues to be a hunting ground for value as it has been for some time. But you have to distinguish a share which deserves to be cheap from one which doesn't. Not necessarily that easy when the market is telling you otherwise but then that is what value investing in all about.
As always with value, watch the debt and avoid if there is an excess of it. Net cash is the ananda sought by value players but I don't do a net cash/debt table because that would exclude a lot of financial shares and therefore limit comparisons with the other tables I present which do include them.
More from Stephen Bland:
> Stephen does not hold any of the shares mentioned. The Motley Fool holds shares in Daejan.
