The Globe and Mail attempts to identify Canadian companies with positive
short-term earnings growth
that are also buying back shares in its Thursday, May 14, edition. The Globe's Ian Tam writes in the Number Cruncher column that investors like share buybacks. Mr. Tam explains that share buybacks are
a way to return value to
investors without issuing a dividend.
For the column Mr. Tam looked
for companies that have reduced
the number of shares outstanding
in recent quarters, have
shown good short-term earnings
momentum and have low historical
betas. Specifically, he ranked stocks on percentage change in shares
outstanding compared with four
quarters ago. He also looked for positive quarterly earnings momentum
(latest four quarters of reported
earnings versus the same number,
one quarter ago). He only considered companies with low five-year historical beta.
His picks had to have a minimum market capitalization of $400-million
and a five-year beta less
than one. Companies with robust buybacks and earnings growth are Dollarama, Rona, Morguard, Metro, WestJet Airlines, Progressive Waste Solutions and Canadian National Railway.
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