The Globe and Mail attempts to identify profitable North American financial
companies with reasonable
valuations in its Tuesday, March 7, edition. The Globe's Craig McGee writes in the Number Cruncher column that two months into the new year,
surging markets show no real
sign of slowing down and
investors are appearing to
maintain their appetite for riskier
securities. The financials sector has led
the charge with total returns of
33.3 per cent for the S&P/TSX
capped financials index and
46.4 per cent for the S&P 500
financials index. Mr. McGee says he searched for mid-cap and
large-cap financial companies
that offer reasonable value and
high profitability.
He ranked financials with the best mix
of price to book, forward price to earnings, return on equity, three-month consensus earnings
estimate revision no worse
than minus 5 per cent and earnings variability (measured
as the standard deviation of
earnings per share over the past
five years divided by the median
value of EPS). Stocks that Mr. McGee believes are worth consideration are IGM Financial, Laurentian Bank of Canada, Bank of Nova Scotia and, Industrial Alliance Insurance and Financial Services.
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