In this week’s StockPointer content analysis (find attached) we discuss Metro Inc. (MRU), a company which we’ve held in our Canadian model portfolio since January 2010. Last Wednesday, November 19th, Metro announced Q4 earnings that beat expectations and sent its stock price to a record high the same day. 
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One of the most established companies in Canada’s consumer staples sector, Metro continues to stand out due to the consistency of its results and well-managed capital investments. For the last 5 years MRU’s return on capital has always been above 10%, hovering between 11.3% and 13.7%; while its cost of capital has remained steady around 6%. Metro offers strong economic performance; and its ability to stay stable and fairly predictable are factors the market often appreciates.
From a value perspective, MRU still trades at a discount relative to its Intrinsic Value, at a P/IV ratio of 0.86. However, the FGV/MV measure of 2.7% (as of November 25th) indicates that we are paying a small premium for future growth expectations. Diving deeper, we can open the “PF Scan” thumbnail in the upper right-hand corner of MRU’s Executive Summary page (attachment #2). From there, we can see that Metro still trades at interesting metrics when compared to its peers, or to the sector average, in addition to offering one of the highest EPIs (Economic Performance Index).
Metro’s EVA continues in a long-term upward trend, with a 21.7% increase in EVA in Q4 2014 vs Q4 2013.
