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Июнь
2021

Stock in Focus: Drax could be a cash cow

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My SIF stock screen is delivering a fairly minimal set of choices this week. Just eight companies satisfy all of my screening requirements. Of these, four are in the portfolio, two are ruled out on diversification grounds, and the final two are overseas stocks.
This situation arises periodically and doesn’t concern me. Indeed, I see it as a sign that the screen is working as intended, filtering for affordable growth. What I often do at times like this is to experiment with disabling individual rules in the screen. 
I usually find that there’s one rule in particular which is limiting my choice of stocks. This week is no exception. By disabling the rule requiring a trailing earnings yield of more than 8%, the number of stocks in the results jumps from eight to 44.

By making this change, I was hoping to find companies whose operating profits were hit by one-off costs last year. These might have been related to the pandemic or some other factor. Such companies might normally pass all of my rules and could potentially be cheap.

One example appears to be utility group




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