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Britvic (LON:BVIC) and its High Flying share price

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Jack Brumby
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Stockopedia’s ‘High Flyers’ are the stock market superstars. These companies tend to be the ones that fund managers jostle and barter over. They are high quality, growing stocks with a history of beating estimates - and Britvic (LON:BVIC)is one of them.

Britvic is a large cap stock in the Non-Alcoholic Beverages industry. When we analyse Britvic from a factor perspective, we find that it has a Quality Rank of 87, a Momentum Rank of 81, but a Value Rank of only 27. This is the classic factor profile of a High Flyer.

5ca222ea3bd1bHighFlyer.png
5ca222ea3bd1bHighFlyer.png

A combination of high quality, high momentum and low value is great when earnings go up but a bad place to be when things go wrong. The higher they rise the harder they fall, after all - and few stocks stay High Flyers for long. Mean reversion is a very real thing and it works like gravity on growth.

GET MORE DATA-DRIVEN INSIGHTS INTO LON:BVIC »

What kind of High Flying stock is ?

So, High Flyers tend to be riskier and more volatile than the market average. But is this true of Britvic?

We can find out quickly by applying Stockopedia’s RiskRatings system, which splits the stock market into five buckets according to stock price volatility. The five classifications (from least to most volatile) are:

  • Conservative (10% of the market)

  • Balanced (15% of the market)

  • Adventurous (20% of the market)

  • Speculative (25% of the market)

  • Highly Speculative (30% of the market)

Britvic is a balanced stock. This means that the group is actually in the bottom quartile of the market in terms of stock price volatility, despite being a High Flyer. This kind of stock is a possible ‘Low Volatility Anomaly’ candidate, as proposed by fund managers at Robeco: a high quality, stable stock that outperforms over time on a risk-adjusted basis (think tortoise and the hare).

Not only that, but we can see from Britvic’s above average five-year return on capital employed figure of 18.6% that the group has been highly profitable over multiple years. This suggests that Britvic can back up its favourable factor exposures and volatility characteristics with some kind of economic moat.

This attractive blend of factors and profitability has been noticed by the market - Britvic has a one-year relative strength of 32.3%.

Find the rockstars of the stock market

High Flyers are great stocks to have in your portfolio if you think you need more momentum or quality - just look out for signs that momentum might be changing. If you want to see which other stocks qualify as High Flyers, you can find a comprehensive list on Stockopedia's StockRanks page.

Simple tools can help us better measure and understand the risks we take. That's why the Stockopedia team has been busy building new ways of understanding investment risks and company characteristics. In this webinar, we talk about two or our most popular innovations: StockRank Styles and RiskRatings. These indicators transform a ton of vital financial information into intuitive classifications, allowing you to get an instant feel for any company on any market - sign up for a free trial to see how your stocks stack up.