Swapped RGS for LOOK

Decided to sell RGS (Regenersis) after the poor reaction to yesterday’s trading statement. I have been in an out of RGS twice, both with very satisfying results. Thanks go to John Rosier
(http://johnsinvestmentchronicle.com) for the latest prompting on the share last year.

John is still bullish on the share, but Paul Scott on Stockopedia was negative on account of the balance sheet, focus on unusual accounting metrics, and low margins. (http://is.gd/4KEuMg)

RGS has been expanding recently, and the outlook is rosy. The company has a lot of momentum business-wise and chart-wise. The share price topped out at 380p, a couple of weeks before the trading statement yesterday. It was in overbought territory, so it could be that we’re just seeing a pullback into less heated territory.

In the end, I decided to save myself the headache of whether I should be in or out because I thought LOOK (Lookers) seemed an easier call. LOOK is a motor retail and after sales service company. The finals issued on 5 March were positive: “There has clearly been a welcome recovery in both the UK new car market and the general UK economy and our motor division has produced an outstanding result during the year. In the year ahead we have further opportunities to develop our existing business as well as benefiting from acquisitions made in 2013.” On 10 March they announced an acquisition, so the business seems to be heading in the right direction. What really swung it for me is that it passed Stockopedia’s Earnings Upgrade Momentum Screen, and it was cheap on an EV/Sales basis (0.25) compared to its sector (Specialty Retailers) of 1.02. I am therefore hoping to repeat the trick that I had with HOME and KENZ, both admirable performers for me, at least so far.

LOOK actually passes 8 Stockopedia screens, and has a momentum rank of 99, and a stock rank of 99. The Earnings Upgrade screen has shown some very good results. Stockopedia’s screen has only been going for a couple of years, but the American counterpart on AAII (www.aaii.com) has a long track record, and it is amongst the best performers.

It seems the logical way to bet. As ever, there’s no guarantees.


About mcturra2000

Computer programmer living in Scotland.
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