The Globe and Mail attempts to identify companies with steady, growing
earnings and low price volatility
amid stormy markets in its Thursday, Aug. 27, edition. The Globe's Ian Tam writes in the Number Cruncher column that for the cautious investor, the
recent volatility in the equity
markets has been a cause for concern.
As a result, Mr. Tam has focused on companies
that have shown a history
of consistent and growing earnings,
but also exhibit low price
volatility, particularly over the
past 90 days. A fairly common
metric used to measure volatility
is the standard deviation of daily
price return (lower standard
deviations imply lower volatility).
From a fundamental perspective,
Mr. Tam also looked for companies
with low earnings variability,
implying consistent earnings
over time. Mr. Tam ranked
stocks based on five-year
earning-per-share growth, standard deviation of daily price
returns, a low five-year beta and a low earnings variability score. Mr. Tam's picks had to have a minimum market
cap of $800-million. His stable stocks in a stormy market are Royal Bank of Canada, Canadian Imperial Bank of Commerce, CGI Group, BCE, Metro and CCL Industries.
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