Category

Number Cruncher Extra

Number Cruncher Extra – Commercial Metals Co. (CMC), AutoNation Inc. (AN) and Celanese Corp. (CE)

In our last Number Cruncher we discussed how Commercial Metals Co. (CMC), AutoNation Inc. (AN) and Celanese Corp. (CE)  are mid-caps with robust profitability and a cheap valuation.

Starting off with CMC

In the past 90 days, CMC’s SP score has decreased by 2, bringing it down to 71. The SP score is derived from the Performance (86.7) and Risk (34.6) scores. The company has multiple impressive factor scores but is most biased towards Value, with a score of 82. CMC experienced an incredible year, seeing a 1-year growth of 475% in Performance Spread. Moreover, in the last year, the company’s Earnings Per Share growth has more than doubled its 5-year average.

 

We can see that the company has been seeing a steady incline in its EVA and NOPAT for the last 5 years and this this growth has recently accelerated. Specifically, CMC’s EVA has grown faster than the Net Operating Profit in the last 3 years. This indicates that the company is creating value for its shareholders rather than simply inflating their numbers.

 

Continuing with AN

AN currently has an acceptable SP score of 63, having decreased by 1 over the past 90 days. The SP score is determined by their impressive Performance (78.2) score and their slightly worrying Risk (40.7) score. AN has a bias tilt towards the Value, Growth, and Quality factors, with scores of 77, 74 and 73 respectively.

 

The company is second best of its peers in terms of Economic Performance Index with a value of 3.7. This metric measures the amount of value created by the company. Contrastingly, AN has the highest risk associated with FGV of its peers. This could point towards the stock being underpriced by the market, making this possibly an attractive point of entry.

 

Lastly, let’s look at CE

Celanese Corp.’s current SP score is 66, which has decreased by 15 over the past 90 days. The company’s SP score is determined through their promising Performance (83.4) score and unsatisfactory Risk (38.9) score. The company has a factor tilt towards Value with a respectable score of 74. CE saw a decrease in Earnings Per Share of 38.5% from last year, down from their 5-year growth average of 77.2%.

 

According to our system, CE is currently trading at a discount. This can also be concluded through our Market Value added metric which shows that the market’s expectations for the company are currently low. Historical pricing suggests that CE’s stock may be undervalued at the moment.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
olamothe@inovestor.com

Number Cruncher Extra – Hardwoods Distribution Inc. (HDI), A&W Revenue Royalties Income Fund (AW.UN) and Absolute Software Corporation (ABST)

In our last Number Cruncher we discussed how Hardwoods Distribution Inc. (HDI), A&W Revenue Royalties Income Fund (AW.UN) and Absolute Software Corporation (ABST) are small caps with tailwinds and a track record of long-term profitability.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Starting off with HDI

In the past 90 days, HDI’s SP score has increased by 1, bringing it up to 65. The SP score is derived from the Performance (86.6) and Risk (42.0) scores. The company has an impressive bias to Value and Growth, with scores of 75 and 74 respectively. HDI experienced an incredible year, seeing a 1-year growth of 109.9% in annual sales. Moreover, the company’s return on capital (ROC) increased to 22.4% over the past year, from the 5-year average of 14.0%.

Up until midway through 2021, our system evaluated the company to be fairly priced. Since then, however, there has been a sharp divergence between our intrinsic valuation and the actual share price. Currently, our model indicates that HDI is intrinsically valued at $438.31. Interestingly, we can see that as the intrinsic value rose the share price slightly declined. This is likely due to the market expecting the reversal in the profitability of the company.

 

 

Continuing with AW.UN

AW.UN currently has a respectable SP score of 63, having increased by 3 over the past 90 days. The SP score is determined by their fair Performance (59.4) score and attractive Risk (22.3) score. AW.UN has quality and volatility bias with scores of 77 and 74 respectively.

 

As seen above, AW.UN completely surpasses its peers when it comes to risk, while also beating all but one in terms of performance. Such a low risk score reflects the stability of the company’s revenue which is attractive to its shareholders.

 

Lastly, let’s look at ABST

Absolute Software’s current SP score is 65, an increase of 5 over the past 90 days. The company’s SP score is determined through their Performance (78.9) and Risk (38.5) scores. The company has a strong factor tilt towards growth with an impressive score of 84, and towards momentum with a score of 73. ABST saw an increase in annual sales of 61.2% from last year, a positive divergence from their 5-year average of 22.2%.

When it comes to the company’s factor exposure, can see that ABST outshines its peers in terms of growth, momentum, yield, and overall ranking.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Ramzi:
rkahale@inovestor.com

Number Cruncher Extra – Cenovus Energy Inc., Brookfield Infrastructure Partners L.P. & Shopify Inc.

In our last Number Cruncher we discussed how Cenovus Energy Inc. (CVE), Brookfield Infrastructure Partners L.P. (BIP.UN) & Shopify Inc (SHOP) are companies that have stood out from the crowd.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Starting off with CVE

In the past 90 days, Cenovus’ SP score has increased by 10, bringing it up to 64. The SP score is derived from the Performance (63) and Risk (31.1) scores. The company has an impressive Momentum score of 82, and bias to Volatility and Growth, both with scores of 70. CVE experienced an incredible year, seeing a 1-year growth of 131.2% in Annual Sales. This is likely due to the steep increase in the price of oil.

 

Apart from the dip in the future growth value (FGV) that occurred at the beginning of the pandemic in 2020, Cenovus’ FGV had been relatively stable. The jump in FGV that occurred in early 2021 seems to have predicted the company’s rise in operating value. Now as the FGV decreases, it will be interesting to see if the current operating value will continue to increase, or if a pullback occurs and it is corrected to a similar pre-pandemic level.

Continuing with BIP.UN

Brookfield Infrastructure currently has a respectable SP score of 73, having increased by 7 over the past 90 days. The SP score is determined by their Performance (70.6) and Risk (22.3) scores. BIP.UN has volatility and quality bias with scores of 78 and 69 respectively. Impressively, annual sales have grown 30.3% over the past year.

 

According to our model, BIP.UN has an intrinsic value (IV) of $117.14 per share. While this is 57.1% lower than September of 2021, the IV has still grown by 1,711.5% in the past 5 years. Currently it is priced at $52.36, indicating that it is underpriced by the market which suggests that the company is attractive.

 

Now let’s look at SHOP

Shopify’s current SP score is 51, an increase of 11 over the past 90 days. The company’s SP score is determined through their moderate Performance (50.1) and Risk (46.2) scores. The company has quite a strong factor tilt towards growth, with a score of 72, and an increase in annual sales of 28.7% from last year.

 

Looking at Shopify’s Intrinsic Value, we can see that generous assumptions must be made to justify the current share price. First, assuming the company has another 10 years of high growth at 20% is optimistic. Next, looking at the company’s Return on Capital and Cost of Capital over the past 5 years. We can see that borrowing capital has been quite expensive, and the returns earned on that capital have been extremely low. If we assume that Shopify can correct this, by raising its return to 13.00% and lowering its cost of capital to 8.50%, only then will the company’s share price be considered fair.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Ramzi:
rkahale@inovestor.com

Number Cruncher Extra – Empire Company Ltd., Quebecor Inc. & Atco Ltd.

in our last Number Cruncher we discussed how Empire Company Ltd. (EMP.A), Quebecor Inc. (QBR.B) & Atco Ltd (ACO.X) are profitable companies trading at a reasonable price.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Let’s start with EMP.A

The company has a healthy SP score of 76, and increased by a massive 10 points in the last 90 days. The SP score is derived from the high performance (76.5) and risk score (23.5) . The company has a moderate exposure to all factor ranging from 58 for yield to 74 for quality. Sales increased by 6.7% year-over-year and increased by an annualized 5.7 per cent over 5 years. Moreover, earnings per share increased by 7.6% in the last year and by a robust 55.4% per year in the last 5 years.

We see that the company has the best best exposure to factors compared to peers and shine in the value and yield factors compared to peers.

Let’s continue with QBR.B

The company has a score of 74 which was unchanged in the last 90 days. The SP score is derived from the performance (75.5) and risk (25.7) score. The company has a respectable quality exposure of 73. The company reported vigorous year-over-year earnings growth of 16% with a robust  5-year annualized EPS growth of 18.7%.

 

5 years ago, our system evaluated the company to be fairly priced, but in the past 2 years, there is a clear divergence between our valuation and the share price and it is growing year after year. It could be interesting to dig a bit deeper to determine if that valuation gap could potentially close.

Finally, ACO.X

ACO.X has a SP score of 65 with a 4 point increase in the last 90 days. The SP score is derived from the performance (64.4) and risk (29.8) score. The company has a sizeable low volatility exposure with a score of 77 and respectable momentum exposure at 72. The company achieved volatile sales and earnings in the last 5 years which resulted in no sales growth over those years which could explain its growth factor exposure of only 29.

ACO.X didn’t increase it’s NOPAT or EVA in the last years, but these metrics have an interesting short term trend that we certainly need to keep an eye on.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com

Number Cruncher Extra – goeasy, TMX Group & Equitable Group

in our last Number Cruncher we discussed how goeasy (GSY), TMX Group (X) & EQB Inc (EQB) are great candidates if you are interested to look at smaller financial companies.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Let’s start with GSY

The company has a healthy SP score of 73, but it decreased by 8 points in the last 90 days. The SP score is derived from the high performance (71.5) and risk score (21.3) . The company has a moderate exposure to all factor except for momentum which stands at 37. Sales increased by a whopping 35.5% year-over-year basis and increased by an annualized 20.6 per cent over 5 years. However, earnings per share decreased by 36.4% in the last year, but still grew by 63.9% per year in the last 5 years.

We see that the company increased its NOPAT during COVID and is now reverting. While the trend is scary, the price also came down a lot.

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Let’s continue with X

The company has a score of 71 with a solid increase of 10 points in the last 90 days. The SP score is derived from the performance (70.1) and risk (25.3) score. The company has a balanced exposure to all factors with a little bias for quality. The company reported vigorous year-over-year earnings growth of 67.7% with a respectable 5-year annualized EPS growth of 25.7%.

 

X currently has the lowest valuation based on our intrinsic value model. Based on our intrinsic value, the company would be worth $124.02 per share, which is below the current price. However, we see that in the past, the company traded as high as 2.73 times the intrinsic value estimated by our model sugesting that the company is currently attractive.

EQB has a score of 74 in our system with a 1 point increase in the last 90 days. The SP score is derived from the performance (69.7) and risk (15.2) score. The company has a value and quality bias with a score of 83 score and 80 respectively. The company achieved stable EPS growth over the last 5 years and rose by a respectable 18.8% on average during this period.

EQB beats all of its peers in terms of risk and also scores well in terms of performance by ranking in the top 3.

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com

Number Cruncher Extra – Asbury Automotive Group, Inc., Hilton Worldwide Holdings & Casey’s General Stores Inc

in our last Number Cruncher we discussed how Asbury Automotive Group, Inc (ABG). , Hilton Worldwide Holdings (HLT) & Casey’s General Stores Inc (CASY) could be excellent candidates if you want to look for Consumer Discretionary stocks that have room to increase their profitability.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Let’s start with ABG

The company has a healthy SP score of 72 with a 90 days decrease of 4. The SP score is derived from the high performance (70.8) and risk score (23.2) . The company has a high exposure to value (75) and quality  (72). Sales increased by a whopping 49.8% year-over-year basis and increased by an annualized 16.8 per cent over 5 years. Earnings per share followed a similar trend, but even more solid with a 90.1% annualized increase in earnings per share and a 52.8% annualized increase on a 5-year horizon.

 

Despite not having the best growth score, compared to peers in its sector, it does relatively well. Overall, the company has the second highest growth score compared to its peers.

 

Let’s continue with HLT

The company has a score of 63 with a solid increase of 9 points in the last 90 days. The SP score is derived from the performance (63.8) and risk (36.7) score. The company has a momentum and volatility bias with a score of 70 and 67 respectively. The company reported vigorous year-over-year sales growth of 102.5 percent due to the relaxation of sanitary measures.

 

HLT was hit hard by the COVID. Its EPS fell from $4 to approximately -$3, but we see that the company has a powerful rebound in its profitability. The share price declined recently and so it could be a potential entry point for buyers.

 

CASY has a score of 66 in our system with a 1 point increase in the last 90 days. The SP score is derived from the performance (72.4) and risk (35.8) score. The company has a quality bias with a score of 67 score and a exposure close to 60 for momentum, volatility and yield. The company achieved solid 1-year sales growth of 38.4%, probably due to fuel revenue increase, while EPS declined 3.8%.

 

CASY increased its NOPAT very smoothly since 2019. In 2018, an extraordinary item seems to have boosted the NOPAT. We note that the last quarter has been promising and that the share price adjusted accordingly.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com

Number Cruncher Extra – ONEX Corporation, Quebecor & Manulife

in our last Number Cruncher we discussed how Onex Corporation (ONEX), Quebecor (QBR.B) & Manulife (MFC) could be good candidates if we want to protect our portfolio from an economic downturn.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Let’s start with ONEX

The company has a decent SP score of 58 with a 90 days decrease of 3. The SP score is derived from the high performance (55.6) and very low risk (35) score. The company has a high exposure to value (90). Its momentum score is acceptable. The strong increase in its fundamentals in the recent 3 to 12 months  could explain the score even if the share price momentum shows some weakness. Sales and earnings growth are not necessarily relevant for this company given its volatility.

 

We se that the company is a top performer compared to its peers, but is maybe not the best performer for a given risk score.

 

Let’s continue with QBR.B

The company has a robust score of 74 with a stable 90 days score. The SP score is derived from the performance (77.6) and risk (26.9) score. The company has a quality bias with a score of 74. The company achieved moderate five-year sales of 2.5%, but still generated annualized EPS growth of 12.2%.

 

Quebecor has a stable profitability and this chart shows it well. The company not only increased its NOPAT, it also increased its EVA which mean the company didn’t just inflated their numbers, they created value for shareholders. Despite the stable uptrend in the NOPAT and EVA, the share price seems to have lost a bit of momentum which could signal an attractive entry point.

The company has a score of 71 in our system with a stable 90 days score. The SP score is derived from the performance (66.5) and risk (14.8) score. The company has a value bias with a moderate exposure to the yield factor. MFC achieved much lower sales in the last year, down 23.9%, but EPS are up 20.8%. The company registered respectable annualized EPS growth of 45.9% in the last 5 years.

 

MFC seems to trade at a reasonable price and based on our Market value added metrics, we come also to this conclusion. The MVA shows market expectation and see that currently, those are quite low for MFC which suggest that the company could be undervalued based on its historical pricing.

 

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com

Number Cruncher Extra – Vector Group Ltd, Philip Morris International Inc, Tyson Foods Inc & Church & Dwight Co. Inc.

in our last Number Cruncher we discussed how Vector Group Ltd (VGR), Philip Morris International Inc (PM), Tyson Foods Inc (TSN) &  Church & Dwight Co. Inc. (CHD) could be good candidates if we want to protect our portfolio from an economic downturn.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Let’s start with VGR

The company has a solid SP score of 78 with a 90 days decrease of 3. The SP score is derived from the high performance (75.9) and very low risk (15.6) score. The company has a high exposure to value (74) and quality (68), but low momentum (36) and volatility (37) scores. The company registered a solid past year with a 133.0% growth in earnings, but also a 39% decrease in sales.

 

We see that the company is trading at a discount while it was trading at premium in the past. This could be an interessing buy opportunity.

Let’s continue with PM

The company has a robust score of 78 with a stable 90 days score. The SP score is derived from the performance (77) and risk (20) score. The company has a quality bias with a score of 83. The company achieved healthy five-year sales and EPS growth of 11.6% while stables grew by 2.3%. A more than reasonnable performance given the low P/E valuation.

 

Our system finds PM attractive compared to other similar companies. It is the most perfoming company compared to peers (higher than the Y line) and is considered to be trading at a favourable discount (at the left of the X axis)

The company has a score of 79 in our system with a stable 90 days score. The SP score is derived from the performance (79.1) and risk (19.8) score. The company has a no singificant bias in terms of factor exposure and scores fairly well in all of them. TSN achieved solid 1-year sales growth up 15.6% and earnings growth did follow with an 87.6% increase.

 

As mentionned in the Number Cruncher, the company faced lawsuits in recent years and our ESG scorecard shows that a recent event had a controversy level of 4 out of 5 meaning that it had a meaninful impact on the company.

 

Finally, CHD.

The company has a great score of 71 with a stable 90 days score. The SP score is derived from the performance (79) and risk (31.7) score. The company has a quality bias with a score of 76. The company achieved healthy five-year sales and EPS growth of 4.8% while stables grew by 2.3%. A more than reasonnable performance given the low P/E valuation.

 

We see that the company had a stable ride in the last 5 years and the investors rewarded them well by giving them a generous valuation.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com

Number Cruncher Extra – West Frazer Timber, Intact Financial Corporation & ARC Ressources

in our last Number Cruncher we discussed how West Frazer Timber (WFG), Intact Financial Corporation (IFC) & ARC Ressources (ARX) perform well in an inflationary environment.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Let’s start with WFG

The company has a solid SP score of 76 with a 90 days increase of 3. The SP score is derived from the sky-high performance (96.7) and low risk (30.7) score. The company has a high exposure to value (91) and growth (92). The company registered a solid past year with a 125.4% growth in sales and 199.9% in earnings which could be partially caused by the acquisition of Nordbord (OSB:TSX). WFG has solid long term performance with sales up 36.1% and earnings up 121.3% per year in the last 5 years.

 

By looking at WFG peers, we know that we have a solid company. WFG scores the highest in performance by far and is better than average in terms of risk. By choosing WFG, investors try to enhance the performance profile of their portfolio and not necessarily to lower their risk exposure.

Let’s continue with ENGH

The company has a robust score of 76 with a 90 days decrease of 2. The SP score is derived from the performance (74.1) and risk (19.4) score. The company has a growth bias with a score of 82. The company achieved healthy five-year sales and EPS growth of 19.3% and 25.8% respectively combined with a great short-term performance due to lower claims due to COVID restrictions that limited travelling and transportation.

 

Our system found IFC expensive for few years, but now performance seems to have reached the share price. At the moment, Stockpointer tells us that Intact looks cheap based on its fundamentals.

Finally, ARX.

The company has a score of 70 in our system with a 90 days increase of 4. The SP score is derived from the performance (73.1) and risk (30.5) score. The company has a growth bias with a score of 84 as well as a value bias with a score of 78. ARX achieved incredible 1-year sales growth up 354%. Earnings growth did follow and stand at 1.26 per share on a trailling twelve month basis.

 

Compared to peers, ARC has solid growth and quality factor exposure and has the best average rank in the overall ranking closely followed by Tourmaline Oil Corp (TOU).

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com

Number Cruncher Extra – Labrador Iron ore Royalty Corporation, Enghouse Systems Ltd. & Stella-Jones

In our last Number Cruncher we discussed how Labrador iron ore royalty corporation (LIF), Enghouse Systems Ltd. (ENGH) & Stella-Jones (SJ) were dividend-paying stocks with growth potential.

Here is the screener we used to find these stocks and that you can add to your personalized screeners.

Let’s start with LIF

The company has an increadible score of 78 in our system with a 90 days increase of 1. The SP score is derived from the solid performance (92.2) and risk (26.7) score. The company has a balance exposure to all factors. The company registered a solid past year with a 46.6% growth in sales and 87.2% in earnings and LIF doesn’t have to be shy of its long-term performance either with a 5-year annual sales growth of 18.9% and 32.2% for earnings growth.

 

By looking at the NOPAT and EVA trend, we know that we have a solid company. The NOPAT increased over the last 5 years, but most importantly, the EVA also grew with a lower volatility than the NOPAT. This means the company grows and creates value for shareholders.

 

Let’s continue with ENGH

The company has a score of 64 in our system with a 90 days decrease of 1. The SP score is derived from the performance (80.4) and risk (31.5) score. The company has a quality bias with a score of 77. The company has achieved healthy five-year sales and EPS growth of 10.3% and 16.5% respectively, but the lack of growth this year has been severly punished by the market this year has shown by its momentum factor of 36.

 

ENGH has a solid history of profitability and growth, but its valuation was deemed too high by our system. We seem to be at a turning point where valuation is returning to our system’s prediction.

Finally, SJ.

The company has a score of 70 in our system with a 90 days increase of 4. The SP score is derived from the performance (76) and risk (26.3) score. The company has a quality bias with a score of 79. SJ has been able to achieve respectable sales growth of 10.3% and earnings growth of 18% in the last 5 years, but most importantly, the company has grown smoothly year after year, a key attribute that shows the sustainability of their growth.

 

Stella-Jones delivered strong results, but the market reacted by contracting its valuation. The FGV tells us that Stella-Jones has the third lowest valuation in the last 5 years.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com