In a recent piece in the Academy, I went back to basics and explained how – and why – the StockRanks can be a useful tool for finding good shares and building a portfolio.
This week I’m going to follow this up with a look at some of the top-ranked stocks in the UK market right now. My aim is to highlight possible opportunities, but also to show how the StockRanks sometimes highlight shares that I might not normally consider.
This is one of the big advantages of a systematic approach, in my view – it allows us to see past blind spots and any inbuilt bias, and view the market more objectively.
Although past performance is not a guide to future returns, the StockRanks’ track record over the last decade suggests that this approach has some merit:
StockRanks: top sectors
StockRanks are designed to be applied to individual stocks. But Stockopedia also provides the average StockRanks for economic sectors and industry groups. I like to keep an eye on these numbers as I find they sometimes highlight a concentration of high-ranked stocks in a particular part of the market.
Here are the top-ranking industry groups at the moment. I find these narrower classifications a better place to look for sector-based opportunities than the broad economic sectors:
You can view the full list here - I’ve cropped it to save space, as there are rather a lot of industry groups!
I wrote about the potential attractions of stocks in the top-ranked industry group, Containers & Packaging, in December 2022.
I’m not the only one to have seen value and opportunity in this part of the market. Mondi (LON:MNDI) has just agreed an all-share deal to buy DS Smith (LON:SMDS), while top-ranked Smurfit Kappa (LON:SKG) is merging with US firm WestRock Co (NYQ:WRK).
These deals mean the investor landscape in this sector could look different in a few months’ time. I think that might be one reason for caution right now, for anyone not already invested.
In the remainder of this article, I’m going to look at 10 of the highest-ranked shares in the…
