The tables featured in this article give you the perfect starting point to swot up on stocks during the summer lull and before the market kicks back into gear in the autumn.

We’ve pulled together five data-driven snapshots that should help drive idea generation for all investors whether or not your focus is on value, growth or income.

LOW PE CANDIDATES (PRICE TO EARNINGS)

The widely-used PE ratio is a simple way of establishing the value of a share. It is the share price divided by the earnings per share of the company.

Fast-growing companies can often command a PE multiple in excess of 20; slow, pedestrian companies tend to be valued around 10 to 14 times earnings; and companies with either financial or trading problems will inevitably have a PE ratio below 10.

The trick for investors is to look at those names trading on lowly PEs and try and determine if there are any names on which the market is being overly negative.

Of the names in the table many are cheap for a reason. Newspaper publisher Reach (RCH) – previously Trinity Mirror – has stubbornly traded at a low single digit earnings multiple for some time and recently announced big write downs associated with its regional newspaper business. Some of the resources plays have significant borrowings which are reflected in the valuation (EnQuest (ENQ)) and all of them are susceptible to earnings volatility thanks to the underlying swings in commodity prices.

Estate agent Countrywide (CWD) is awaiting shareholder approval for an emergency share placing while department store Debenhams (DEB) has its own balance sheet issues.

Recently demerged Bank of Georgia (BGEO) could warrant further investigation given the strong economic growth in Georgia and the historic good performance of spin-off companies.

BEST EARNINGS GROWTH

The ability to grow earnings consistently and quickly is typically a recipe for strong share price gains. A growth investor may not worry too much about valuation and focus instead on the size of the opportunity a business is chasing. The key is to check that this earnings growth is being accompanied by plenty of cash flow.

Many of these firms, which have generated the most material ten-year annualised earnings growth of any FTSE All-Share constituents, are expensive. At 505p and on an April 2019 price to earnings ratio of 13.7, packaging play DS Smith (SMDS) is among the exceptions. It could be interesting given it is a beneficiary of the growth of online shopping.

LOW PEG CANDIDATES (PRICE TO EARNINGS GROWTH)

The PEG ratio is a measure of value that combines a company’s price to earnings (PE) ratio and its rate of earnings growth, thereby refining the PE ratio. A low PEG indicates you’ll pay a low price for future earnings growth, anything below a reading of 1.0 is considered cheap.

Watch out for very low PEG ratios as there could be something fundamentally wrong with the business. Some market commentators say the sweet spot for bagging a value investment is when the PEG ratio is somewhere between 0.6 and 0.8.

We have focused on this sweet spot and limited our search to FTSE 350 constituents. The oil-related names in Royal Dutch Shell (RDSB) and services plays Hunting (HTG) and Wood Group (WG.) have fairly difficult to predict earnings thanks to their exposure to see-sawing oil prices.

The most interesting names are probably industrial buyout specialist Melrose Industries (MRO) and airline Wizz Air (WIZZ). Melrose will be looking to dispel some lingering market skepticism around its ability to take on the challenge of turning around its biggest acquisition to date in GKN.

Hungary’s Wizz upgraded full year earnings guidance in May, benefiting from decent economic growth in the areas it operates in and tight control of costs.

COMPANIES OFFERING HIGH YIELDS

We’ve filtered the market for high-yielding stocks where dividends are comfortably covered by earnings. Cover below 1.5 times implies that the business may not be able to sustain the level of dividends presently forecast.

Although this guide is not foolproof as dividends are paid from cash, earnings per share forecasts can be helpful since they give a broad feel for how a business is expected to perform.

The high yields on offer from the housebuilding sector reflect growing market skepticism over this grouping’s ability to sustain current levels of profitability.

Our favourite names from this collection include pub group Marston’s (MARS) which recently enjoyed a timely boost from the World Cup.

We also reckon over-50s insurance and travel business Saga (SAGA) can recover from a difficult spell given its exposure to helpful demographic trends.

BEST DIVIDEND GROWTH

Dividend growth signals a board’s confidence in its charge’s long-term cash generation capabilities. You can draw the conclusion that the board sees scope for value accretion in the business over the coming years and therefore you could see a rising share price plus a steady increase in dividends.

This table shows the companies with the best annualised growth in dividends during the last decade. Some of these businesses may struggle to generate such impressive income growth in the future, notably Micro Focus (MCRO) is struggling with its hard-to-swallow acquisition of HPE Software.

The outlook may be slightly brighter for Moneysupermarket.com (MONY). The comparison site recently won the market’s attention with the unveiling of a new joint venture aimed at delivering comparison services on mortgages (19 Jul).

The mortgage market is still largely conducted through the phone and on paper in the UK and as such is ‘ripe for disruption’ according to Moneysupermarket.

The 50-50 joint venture entitled Podium, sees the company team up with the founders of comparison tool developer HD Decisions, Mark Hawkins and Matt Denham. (TS)

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