The Globe and Mail attempts to identify Canadian stocks beating the market but still cheap relative to peers in its Thursday edition. The Globe's guest columnist Arjun Deiva writes in the Number Cruncher column that year-to-date, the S&P/TSX Composite Total Return Index has risen 16.1 per cent, a display of the market's resiliency. That said, the impressive performance of the equity index continues to raise the question whether we are overpaying for sought-after stocks on a tear. To this end, Mr. Deiva looked for companies that have indeed outperformed the index yet still appear undervalued relative to their peers. To find these stocks, he ranked stocks on several momentum factors: three-, six- and nine-month price change (higher values preferred);
three-, six- and nine-month market-relative price change. (Here the market is represented by the S&P/TSX Composite Total Return Index. Higher values preferred.) He considered the stocks' sector-relative price-to-earnings, price-to-sales, price-to-book and price-to-cash-flow ratios to look for companies with multiples below their peers. Mr. Deiva's recommended picks are Bank of Montreal, George Weston, Colliers International Group, Power Corp of Canada, WSP Global and CI Financial.
© 2021 Canjex Publishing Ltd. All rights reserved.