The Globe and Mail reports in its Thursday, March 30, edition that the approaching end of the
first quarter of 2017 is a
good time to identify stocks
with the greatest increase in
profit expectations. The Globe's Scott Barlow writes that Lucara Diamond is one such stock. It tops the list
with a 260-per-cent change in
analyst earnings expectations
during the past three months.
This big number is flattering,
however, as the percentage improvement
is from a low base.
The increase only amounts to
6.5 cents a share. Lucara
should be considered highly
speculative. The most interesting discovery
for Mr. Barlow is the broad improvement
in paper and forest
stocks. There are three forestry
stocks on the table -- West Fraser
Timber, Interfor and Canfor.
Of the three, West Fraser is the
most likely candidate for further
study. Consensus earnings estimates
rose 72 per cent or 57
cents a share. Yet the company's
trailing price-to-earnings ratio of
13.8 times compares favourably
with the benchmark's 22.5 times.
West Fraser's forward price-to-earnings
ratio of 10.5 -- the current
stock price divided by consensus
analyst profit
expectations -- is also well below
the market average of 17.
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