The Globe and Mail attempts to identify profitable Canadian
stocks that may still be
available at reasonable valuations in its Thursday edition. The Globe's Craig McGee writes in the Number Cruncher column that he looked for stocks with the best combination
of the following metrics: trailing earnings yield (operating
earnings over the latest
four quarters divided by the
latest price); trailing return on equity; price relative to the average
price over the past year (where higher
is better); total asset turnover (sales over
the latest four quarters divided
by total assets); revision of the consensus earnings-per-share
estimate over the past three
months; earnings stability; and price stability. Over the 12 months ended June
30, 2014, this strategy was able to
more than keep up with the market,
generating a total return of
29.6 per cent compared with 28.7
per cent for the S&P/TSX Composite
Total Return Index.
For the
full period stretching back to
1991, this strategy would have
generated an annualized total
return of 18.8 per cent.
Mr. McGee's profitable Canadian stocks are Parex Resources, Canaccord Genuity Group, Magna International, Gibson Energy, Transcontinental and CCL Industries.
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