The Globe and Mail attempts to identify companies that rallied in 2016,
but but are trading at reasonable
valuations relative to their own
history in its Thursday, Feb. 2, edition. The Globe's Ian Tam writes in the Number Cruncher column that in 2016 almost all sectors within the
S&P/TSX composite (with the
exception of health care) posted
strong returns. Mr. Tam created a strategy that
ranks stocks on their price
changes over various periods,
while simultaneously filtering for
companies that are trading near
or below their 10-year historical
median price-to-book, price-to-cash-flow, price-to-sales and
price-to-earnings ratios.
Specifically, the cut-off used
here is 1.1 times (meaning that
the company is trading within a
10-per-cent premium or lower
to their 10-year historical
valuation ratios).
To qualify, stocks must have an
average monthly value of shares
traded of $2-million or greater
(this figure represents the top
two thirds of companies in the
Morningstar CPMS Canadian
database, which today consists of
about 720 names). Stocks good for value-oriented investors are IGM Financial, Industrial Alliance Insurance and Financial Services, Westshore Terminals Investment, Canadian Western Bank and Wi-LAN.
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