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Canada’s 2019 Top 50 FinTech Companies

The Digital Finance Institute selects Inovestor as one of their 2019 Top 50 FinTech Companies. Inovestor would like recognize everyone involved in making Inovestor a household name in the Fintech industry. As we approached our 20th anniversary, Inovestor is preparing a major product upgrade set for a November 22nd release.

To prepare the list of Canada’s Top 50 FinTech Companies, the Institute conducted market research and informational interviews with stakeholders to gather data to help identify the leading companies in Canada. A number of factors, such as disruption of service, scalability, growth, external adoption and innovation were taken into consideration when compiling the list of the top 50 companies. In assessing the factors, we standardized the ranges of numeric variables and measured each company’s score index by calculating the weighted average under the comprehensive consideration of the determining factors listed above. The companies listed represent a wide diversity of sub-sectors in FinTech, capital markets, insurance, Blockchain, RegTech, payments and finance.

 

The Digital Finance Institute

The Digital Finance Institute is a think tank for digital finance with three foundational pillars – financial inclusion, responsible innovation, and support for women in FinTech. Today, the Institute is run by Millennials, which we believe is important for Canada’s digital economy revolution. In our work, we represent a strategic link in the digital finance ecosystem among the financial services sector. NGO’s, academia, financial regulators and policy makers to promote financial innovation and vibrancy through thought leadership, engagement, advocacy, research and education. That strategic link comes together at APEC 2019, for example, where the institute is invited to give a talk on AI, banking and regulation to the 21 member countries, which helps promote Canadian innovation.

These 17 Canadian-listed small-cap stocks show solid fundamentals

In this week’s filter created for The Globe and Mail, we screened for Canadian-listed small-cap stocks showing solid fundamentals.

Today we highlight Canadian small-cap growth companies that have sound fundamentals.

We screened the Canadian stock universe by focusing on the following criteria:

  • Market capitalization between $200-million and $1-billion;
  • A current economic performance index (EPI) greater than one – this ratio is the return on capital to cost of capital. It gives shareholders an idea of how much return the company is generating on each dollar spent;
  • Positive 12-month sales growth;
  • A PEG, or price-earnings to growth, ratio between zero and two. This ratio compares the current price-to-earnings ratio with the average five-year earnings per share growth. For a stock to be fairly valued, the PEG ratio is one. For the stock to be undervalued, the PEG ratio would be lower than one, showing that the stock price does not fully reflect the earnings growth capability of the company.

Our Findings:

Magellan Aerospace Corp., an aerospace systems and components manufacturer based in Mississauga, is the largest company on our list by market cap. The PEG ratio is 0.8, which suggests that the earnings growth was stronger than what is reflected by the stock price – in other words, an attractive valuation. On the other hand, the company’s operations are efficient, as indicated by the EPI, which shows return on capital at 1.5 times the cost of capital.

TerraVest Industries Inc., an Alberta-based manufacturer whose products include fuel-containment vessels and wellhead processing equipment for the oil and gas industry, is one of the smallest companies on our list by market cap. It has a PEG ratio is 0.6, putting the stock at an attractive price point. In addition, the sales grew strongly, at 34.6 per cent, over the past 12 months.

This article is written by Noor Hussain, Analyst at Inovestor Inc. 

Investors are advised to do further research before investing in any of the companies that are listed below.

Log in to you account to get additional information or to modify the original screener

Thirteen defensive U.S. health care and consumer staples stocks

In this week’s filter created for The Globe and Mail, we screened for Thirteen defensive U.S. health care and consumer staples stocks.

Looking back at May, it was the worst month so far in 2019 for the markets. The U.S.-China trade war spiralled deeper early in the month, with U.S. President Donald Trump raising tariffs on US$200-billion worth of Chinese products and China retaliating by setting tariffs on US$60-billion of American goods. Last week, the markets tumbled as the geopolitical mess worsened due to escalating trade tensions. In addition, last Thursday Mr. Trump threatened Mexico with a new wave of tariffs, which will begin on June 10. During this period of extended uncertainty, non-cyclical sectors hold up better due to their defensive characteristics. Today, we will screen U.S. health care and consumer staples stocks to identify some companies with solid operations and revenues that may be able to withstand this trade-war storm. We screened the U.S. stock universe by focusing on the following criteria:

  • Market capitalization greater than US$10-billion;
  • A positive 12-month change in the economic value-added (EVA) metric – a positive figure shows us that the company’s profits are increasing at a faster and greater pace than the costs of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax minus capital expenses;
  • A positive 12-month change in the economic performance index (EPI) and a current EPI greater than one – this ratio is the return on capital to cost of capital;
  • A future-growth-value-to-market-value ratio (FGV/MV) of between 40 per cent and negative 70 per cent. We chose this range to eliminate stocks that trade at an exaggerated premium or discount as that would increase the risk. This ratio represents the proportion of the market value of the company that is made up of future growth expectations rather than the actual profit generated. The higher the percentage, the higher the baked-in premium for expected growth and the higher the risk.
  • Free-cash-flow-to-capital ratio. This metric gives us an idea of how efficiently the company converts its invested capital to free cash flow, which is the amount left after all capital expenditures have been accounted for. It is an important measure because it gives us the company’s financial capacity to pay dividends, reduce debt and pursue growth opportunities. We are always looking for a positive ratio and more than 5 per cent is excellent.

Eleven U.S. energy stocks poised to withstand oil-price volatility

In this week’s filter created for The Globe and Mail, we screened for U.S energy companies that can withstand magnified volatility.

Market speculation around production cuts by the Organization of Petroleum Exporting Countries and the impact of U.S. sanctions against Iran and Venezuela have been among the factors driving recent oil-price volatility. Today, we will identify U.S. energy companies whose healthy operations and strong fundamentals make them solid bets to withstand the heightened unpredictability. We screen the S&P 500 energy sector for quality companies by using the following criteria:

  • Market capitalization greater than US$5-billion;
  • Positive 12-month change in the economic value-added (EVA) metric – a positive figure shows us that the company’s profit is increasing at a greater pace than the cost of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax (NOPAT) minus capital expenses;
  • A positive change in the 12-month NOPAT – a measure of operating efficiency that excludes the cost and tax benefits of debt financing by simply focusing on the company’s core operations net of taxes;
  • Future growth value/market value (FGV/MV) between minus 50 per cent and 50 per cent, to exclude companies with exaggerated discounts or premiums. FGV/MV represents the proportion of the market value of the company that is made up of future growth expectations rather than the actual profit generated. The higher the percentage, the higher the baked-in premium for expected growth and the higher the risk.
  • Free-cash-flow-to-capital ratio. This metric gives us an idea of how efficiently the company converts its invested capital to free cash flow, which is the amount left after all capital expenditures have been accounted for. It is an important measure because it gives us the company’s financial capacity to pay dividends, reduce debt and pursue growth opportunities. We are always looking for a positive ratio and more than 5 per cent is excellent.
  • Economic performance index (EPI), which is the ratio of return on capital to cost of capital, representing the wealth-creating ability of the company. Anything above one is favourable; the higher the figure the better.

Twelve established growth stocks poised for further gains

In this week’s filter created for The Globe and Mail, we screened for established growth stocks poised for further gains.

In the late stage of the business cycle, such as many argue we are in now, it is important for growth investors to improve their downside protection without sacrificing potential upside returns.

Today we look for growth stocks supported by favourable fundamentals that should allow them to capture further gains in a rising market.

We screened Inovestor’s U.S. universe of stocks by focusing on the following criteria:

  • Market capitalization greater than US$10-billion;
  • 12-month change in the economic value-added (EVA) metric greater than 10 per cent – a positive figure shows us that the company’s profits are increasing at a faster and greater pace than the costs of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax (NOPAT) minus capital expenses;
  • One-year return of at least 10 per cent;
  • Average annual earnings-per-share (EPS) growth over five years of at least 15 per cent;
  • Annual sales change one year ago or two years ago of at least 10 per cent;
  • Current economic performance index (EPI) greater than one. This is the ratio of return on capital to cost of capital, representing the wealth-creating ability of the company. A ratio above one is key for sustainable investment opportunities;
  • Free-cash-flow-to-capital ratio. This ratio gives us an idea of how efficiently the company converts its invested capital to free cash flow, which is the amount left after all capital expenditures have been accounted for. It is an important measure because it gives us the company’s financial capacity to pay dividends, reduce debt and pursue growth opportunities. We are looking for a positive ratio.
  • Future-growth-value-to-market-value ratio (FGV/MV). This ratio represents the proportion of the market value of the company that is made up of future growth expectations rather than the actual profit generated. The higher the percentage, the higher the baked-in premium for expected growth and the higher the risk.

Risk Rating of the Horizons Inovestor Canadian Equity Index ETF (“INOC”) Reduced from “Medium” to “Low to Medium”

TORONTOApril 12, 2019 /CNW/ – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs“) has announced a change to the risk rating of the Horizons Inovestor Canadian Equity Index ETF (“INOC“), from “Medium” to “Low to Medium“. The change in risk rating is effective immediately.

The investment risk level of an ETF is determined in accordance with a standardized risk classification methodology, set out in National Instrument 81-102 Investment Funds, that is based on the historical volatility of the ETF, as measured by the 10-year standard deviation of the returns of the ETF. If an ETF has less than 10 years of performance history, the investment risk level of the ETF is calculated using the return history of the ETF, and, for the remainder of the 10-year period, the return history of a reference index that is expected to reasonably approximate the standard deviation of the ETF.

No changes have been made to the investment objectives or strategies of INOC as a result of the changes to the risk ratings. A summary of the risk rating classification methodology, and the investment objectives and strategies of INOC, can be found in INOC’s most recently filed prospectus.

About Horizons ETFs Management (Canada) Inc. (www.HorizonsETFs.com)

Horizons ETFs Management (Canada) Inc. is an innovative financial services company and offers one of the largest suites of exchange traded funds in Canada. The Horizons ETFs product family includes a broadly diversified range of solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. Horizons ETFs has more than $10 billion of assets under management and 86 ETFs listed on major Canadian stock exchanges. Horizons ETFs Management (Canada) Inc. is a member of the Mirae Asset Global Investments Group.

Horizons ETFs is a member of Mirae Asset Global Investments. Commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by Horizons ETFs Management (Canada) Inc. (the “Horizons Exchange Traded Products”). The Horizons Exchange Traded Products are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the Horizons Exchange Traded Products. Please read the relevant prospectus before investing.

SOURCE Horizons ETFs Management (Canada) Inc.

For further information: For investor inquiries: Contact Horizons ETFs at 1-866-641-5739 (toll-free) or (416) 933-5745, info@horizonsetfs.com; For media inquiries: Contact Mark Noble, Senior Vice-President, ETF Strategy, Horizons ETFs Management (Canada) Inc., (416) 640-8254, mnoble@horizonsetfs.com

Related Links

http://horizonsetfs.com/

Christian Godin Joins Inovestor Asset Management

With 25 years of experience in various senior positions including 15 years in equity management and 10 years in capital markets research, Christian brings extensive background and knowledge in equity investing. He currently oversees portfolio management activities for our Canadian equity strategy INOC:TSX. Christian holds a B.A.A. commerce from l’UQAM and a M.Sc. Finance from the HEC.

Fifteen U.S. stocks to play defensively amid the latest market volatility

In this week’s filter created for The Globe and Mail, we screened for U.S stocks that can act defensively amid the recent volatility.

Last Friday, the U.S. yield curve inverted, causing some panic in the stock market. On Monday, the curve stabilized but still remained inverted, prompting caution from investors. An inversion, resulting from uncertain economic growth, is often seen as a leading indicator of recession. In order to protect themselves, investors may choose to re-allocate some of their assets to non-cyclical sectors, which act defensively during market volatility. Today we look into two of them: utilities and telecommunications. We screened the U.S. universe by focusing on the following criteria:

  • Market capitalization greater than US$10-billion;
  • Positive 12-month change in the economic value-added (EVA) metric – a positive figure shows us that the company’s profits are increasing at a faster and greater pace than the costs of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax minus capital expenses;
  • Positive 12-month change in the economic performance index (EPI) and a current EPI greater than one – this ratio is the return on capital to cost of capital;
  • Future-growth-value-to-market-value ratio (FGV/MV) is between 40 per cent and minus 70 per cent. We chose this range to eliminate stocks that trade at an exaggerated premium or discount because that would increase the risk. This ratio represents the proportion of the market value of the company that is made up of future growth expectations rather than the actual profit generated. The higher the percentage, the higher the baked-in premium for expected growth and the higher the risk.

Read more in this article written by Noor Hussain, Analyst & Account Executive at Inovestor Inc.

Horizons ETFs announces March 2019 distributions for certain ETFs (INOC)

TORONTO – March 22, 2019 – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs”) is
pleased to announce the distribution amounts per unit (the “Distributions”) for certain of its of exchange
traded funds (the “ETFs”) for the period ending March 31, 2019, as indicated in the table below.
The ex-dividend date for the Distributions is anticipated to be March 28, 2019, for all unitholders of record
on March 29, 2019. The Distributions for units of each ETF will be paid in cash or, if the unitholder has
enrolled in the respective ETF’s dividend reinvestment plan (“DRIP”), reinvested in additional units of
the applicable ETF, on or about April 10, 2019.
Horizons ETFs has made an additional announcement regarding the March distributions for its family of
covered call ETFs in a separate press release.

 

View the Press Release