Monthly Archives

January 2020

10 Canadian midcap stocks with good momentum

What are we looking for?

At least until Monday’s pullback, the S&P/TSX Composite Index has been on a great run, rising more than 3 per cent this year as of Friday’s close. Investor sentiment driven by expectations of a positive earnings season, a stable economic outlook and the China-U.S. Phase 1 trade deal have helped the market reach new record highs in 2020. Investor sentiment, driven by expectations of a positive earnings season, a stable economic outlook and the China-U.S. Phase 1 trade deal, have helped the market reach new record highs in 2020.
Today, we look for Canadian mid-cap stocks that had a good run in the short term, and where price gains are supported by fundamentals such as sales and profitability.
The screen
We screened the Canadian companies by focusing on the following criteria:
•Market capitalization greater than $500-million and lower than $3-billion;
•Price change over one month higher than 2 per cent – we are looking for companies with a positive momentum in the very short-term;
•Price change over three months higher than 6 per cent – we are looking for companies with a positive momentum in the short-term;
•A return on capital more than 7 per cent – we want to find profitable companies that have a good return on investment;
•Sales growth higher than 10 per cent over 12 months – we are looking for a growing company. (Sales growth of 10 per cent may seem like a lot, but smaller companies can grow more easily than big ones);
For informational purposes, we have also included recent stock price, dividend yield and one-year price return. Please note that some ratios may be reported at the end of the previous quarter.
What we found
We found 10 companies with these criteria, with the accompanying table ranked by 12-month sales growth. K92 Mining Inc. tops the table, realizing huge sales growth over the past year. The return on capital is also a lot higher than our threshold, sitting at 50.9 per cent. Note: Results can be quite volatile for mining companies and we need to be careful with the short track record of this company.
Aside from K92 Mining, Wall Financial Corp. and Heroux-Devtek Inc. have had big years, with 72.9 per cent and 51.1 per cent, respectively, in sales growth. Wall Street Financial has shown strong price momentum over the past three months while Heroux-Devtek has done quite respectably over the past month.
Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Ticker Name PRICE ($) EXPECTED DIV. YIELD (%) MARKET CAP. ($M) 3M PRICE RETURN (%) 1M PRICE RETURN (%) RETURN ON CAPITAL Sales Ch. 12M (%) 1Y PRICE RETURN (%)
KNT-X K92 Mining, Inc. 3.48                                                  –                            740.10                                  35.21                                  20.83                                  50.87                          192.20                                242.86
WFC-T Wall Financial Corporation 35.95                                            5.58                        1,220.62                                  37.51                                    7.06                                  11.86                            72.91                                  39.97
HRX-T Heroux-devtek Inc. 20.08                                                  –                            730.15                                  11.05                                    5.13                                  9.95                            51.07                                  47.72
PEO-X People Corporation 10.48                                                  –                            713.80                                  10.95                                    4.49                                  10.29                            23.17                                  37.68
GSY-T Goeasy Ltd. 73.39                                            1.69                        1,052.71                                  16.77                                    5.52                                  22.18                            22.23                                  94.44
REAL-T Real Matters, Inc. 12.75                                                  –                        1,083.06                                  11.59                                    3.49                                  7.34                            18.46                                273.33
ATZ-T Aritzia, Inc. 25.08                                                  –                        2,733.08                                  13.46                                  31.65                                  26.96                            15.47                                  16.16
ENGH-T Enghouse Systems Limited 52.25                                            0.85                        2,860.03                                  32.00                                    8.45                                  18.63                            12.54                                  45.10
HCG-T Home Capital Group Inc. 33.76                                                  –                        1,935.50                                  27.90                                    2.43                                  7.96                            11.59                                128.89
ET-T Evertz Technologies Limited 18.3                                            3.94                        1,405.47                                    7.40                                    2.46                                  17.89                            10.65                                  10.32

10 Canadian midcap stocks with good momentum

What are we looking for?

At least until Monday’s pullback, the S&P/TSX Composite Index has been on a great run, rising more than 3 per cent this year as of Friday’s close. Investor sentiment driven by expectations of a positive earnings season, a stable economic outlook and the China-U.S. Phase 1 trade deal have helped the market reach new record highs in 2020. Investor sentiment, driven by expectations of a positive earnings season, a stable economic outlook and the China-U.S. Phase 1 trade deal, have helped the market reach new record highs in 2020.
Today, we look for Canadian mid-cap stocks that had a good run in the short term, and where price gains are supported by fundamentals such as sales and profitability.

The screen
We screened the Canadian companies by focusing on the following criteria:
•Market capitalization greater than $500-million and lower than $3-billion;
•Price change over one month higher than 2 per cent – we are looking for companies with a positive momentum in the very short-term;
•Price change over three months higher than 6 per cent – we are looking for companies with a positive momentum in the short-term;
•A return on capital more than 7 per cent – we want to find profitable companies that have a good return on investment;
•Sales growth higher than 10 per cent over 12 months – we are looking for a growing company. (Sales growth of 10 per cent may seem like a lot, but smaller companies can grow more easily than big ones);
For informational purposes, we have also included recent stock price, dividend yield and one-year price return. Please note that some ratios may be reported at the end of the previous quarter.

What we found

We found 10 companies with these criteria, with the accompanying table ranked by 12-month sales growth. K92 Mining Inc, Wall Financial Corp, and Heroux-Devtek Inc being the top three of the group.

Log in to you account to get additional information in Number Cruncher Extra or to modify the original screener.

StockPointer® Canadian Equities Model Portfolio Transactions – January 2020

We have rebalanced the Nasdaq Inovestor Canadian Index based on our Canadian Model Portfolio, which will be effective on January 17th after market close. Here are the details:

In:

1. Kirkland Lake Gold (KL) – Intra-sectoral transaction.

2. MTY Food Group (MTY)– Market Trend – Increase in the Consumer Discretionary sector as seen in the Top 100 index.

 

Out:

1. Ritchie Bros Auctioneers Inc. (RBA) – Market Trend – Decrease in the Industrial sector as seen in the Top 100 index.

2. Nordbord (OSB) – Not in the top performers of its sector.

 

Dividend Paying Stocks in the Gold Sector

WHAT ARE WE LOOKING FOR?
Gold is reaching price highs not seen since 2013, because of dovish central banks and the geopolitical volatility caused by the U.S.-China trade war and, most recently, the U.S.-Iran crisis. Gold is up 21 per cent over the past 12 months. Expect gold miners to report better results in their next quarterly reports. Today, we will be looking more closely at gold miners that pay a dividend. The yield is our proxy for stable operations and we use the change in net operating profit after tax, or NOPAT, to find growing companies.
For the Globe and Mail this week, we look at dividend stocks in the volatile gold sector.

THE SCREEN
We screened the Canadian- and U.S.-listed gold miners by focusing on the following criteria: Market capitalization greater than $1-billion; Dividend yield; 12-month and 24-month change in the company’s NOPAT – appositive figure would indicate that there is growth and progress in operating efficiencies. For informational purposes, we have also included recent stock price, cost of capital (a weighted cost combining equity and debt, expressed as a percentage of total capital) and one-year return. Please note that some ratios maybe reported at the end of the previous quarter.

WHAT WE FOUND
Only 11 gold miners with a market capitalization of more than $1-billion pay a dividend.

Centamin PLC pays the highest dividend by far, but its negative NOPAT change over both 12 and 24 months suggests future dividend growth may not be sustainable. Newmont Goldcorp Corp., Royal Gold Inc., Yamana Gold Inc. and Kirkland Lake Gold Ltd. all show growing NOPAT over the past 12 and 24 months.

As the largest company on our list, suggesting more stable operations than smaller companies in this highly volatile sector, Newmont is well positioned to maintain and increase its dividend. Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Ticker Name PRICE ($) 1Y PRICE RETURN (%) MARKET CAP. ($BIL) EXPECTED DIV. YIELD (%) LAST QTR DIV. YIELD (%) COST OF CAPITAL (%) NOPAT CH. 24M (%) NOPAT CH. 12M (%)
CEE-T Centamin Plc 2.12 5.37 2.45 4.40 4.00 9.74 -5.61 -3.61
OR-T Osisko Gold Royalties Ltd 12.27 0.5 1.77 1.60 1.62 5.93 0.02 -0.30
NGT-T Newmont Goldcorp Corporation 55.15 28 45.22 1.31 1.48 5.65 1.46 2.07
ABX-T Barrick Gold Corporation 23.29 40.59 41.40 1.08 1.17 5.75 -1.93 0.55
AEM-T Agnico Eagle Mines Limited 77.44 44.66 18.51 1.15 0.91 5.95 -0.88 -0.19
RGLD-Q Royal Gold, Inc. 113.79 33.33 7.46 0.77 0.86 6.20 0.68 1.69
YRI-T Yamana Gold Inc. 4.86 45.4 4.62 1.03 0.79 10.85 0.62 2.26
AGI-T Alamos Gold Inc. 7.5 41.98 2.93 0.70 0.69 9.97 -2.12 -0.86
SVM-T Silvercorp Metals Inc. 7.18 135.59 1.24 0.44 0.65 14.75 -0.32 0.34
BVN-N Compania De Minas Buenaventu 13.97 -14.42 3.54 0.60 0.55 6.57 -7.61 -8.19
KL-T Kirkland Lake Gold Ltd. 58.33 60.15 12.26 0.42 0.31 8.12 4.31 2.86

Dividend Paying Stocks in the Gold Sector

WHAT ARE WE LOOKING FOR?
Gold is reaching price highs not seen since 2013, because of dovish central banks and the geopolitical volatility caused by the U.S.-China trade war and, most recently, the U.S.-Iran crisis. Gold is up 21 per cent over the past 12 months. Expect gold miners to report better results in their next quarterly reports. Today, we will be looking more closely at gold miners that pay a dividend. The yield is our proxy for stable operations and we use the change in net operating profit after tax, or NOPAT, to find growing companies.
For the Globe and Mail this week, we look at dividend stocks in the volatile gold sector.

THE SCREEN
We screened the Canadian- and U.S.-listed gold miners by focusing on the following criteria: Market capitalization greater than $1-billion; Dividend yield; 12-month and 24-month change in the company’s NOPAT – appositive figure would indicate that there is growth and progress in operating efficiencies. For informational purposes, we have also included recent stock price, cost of capital (a weighted cost combining equity and debt, expressed as a percentage of total capital) and one-year return. Please note that some ratios maybe reported at the end of the previous quarter.

WHAT WE FOUND

Only 11 gold miners with a market capitalization of more than $1-billion pay a dividend.

 

Log in to you account to get additional information in Number Cruncher Extra or to modify the original screener.

Portfolio Manager’s January comment For Q4 2019

Global equities ended the year with a bang! The S&P/TSX Composite Total Return Index increased by 3.2% in Q4 adding to this years’ gains for a total return of 22.9% in 2019. During Q4, the S&P500 produced an 8.5% return for an annual total return of 28.9% while the MSCI ACWI ex US posted a 9.0% return leading to a 22.1% YTD total return.
There was a number of drivers behind this strong finish. Firstly, most company’s results were inline or better than expected, secondly central banks have maintained a dovish tone, and finally the year ended with a phase one agreement between the US and China.
In Canada, the best Q4 sectors were Info-Tech up 10.7% and Materials up 7.4%, the worst sector was Healthcare down 6.0%. For the year, Info-Tech and Utilities were the top performers up 63.5% and 31.6%, respectively, while Healthcare was the weakest on, down 11.4%.
NQICA in Q4 returned 2.5% leading to an annual total return of 24.1% versus the S&P/TSX TR composite which returned 3.2% in Q4 and 22.9% YTD.
The worst performers in the NQICA in Q4 were Gildan Activewear (GIL) with a return of -18.1%, due to lower than expected results, and Metro (MRU) with a -7.8% return. On the other hand, the best performers were Parex up 19.0%, due to excellent results and new field discoveries, and National Bank up 10.4% on the back of an excellent Q4.