Number Cruncher Extra

In our last Number Cruncher, we  discussed how Dollarama (DOL:TSX), BRP Inc (DOO:TSX), Constellation Software (CSU:TSX)  create massive value for its shareholders. Given that the economic value added (EVA) model is used to analyze the value created by companies, it is unsurprising that these companies receive fantastic SP scores as they generate significant value for their shareholders.

DOL has an SP score of 72, up by one in the past 90 days. This is derived by using the Performance score of 82.9 and the Risk score of 32.4.  DOL has been able to maintain an exceptional average 5Y growth of its earnings per share and 5Y growth of its annual sales at 12.6% and 8.9%, respectively. Although DOL has a high quality factor exposure of 76, its value score is only 40, indicating that the company may be richly valued.

Dollarama’s performance was lackluster at the start of the pandemic until July 2021, and there is a possibility that they faced supply chain issues in China. However, since July 2021, their EVA has increased by approximately 50%, potentially due to high inflation that is driving customers to their store to save money.

DOO has an SP score of 78, up by three in the past 90 days. This is derived by using the Performance score of 88.1 and the Risk score of 24.6. The company has a marvelous average 5Y annual sales growth of 17.5% and a 1Y growth of 30.8% along a robust score of 76 for both its Growth and Quality components.

DOO demonstrates its strength in the manufacturing sector by outperforming its competitors by a considerable margin in terms of balancing performance and risk.

CSU has an SP score of 75, down by one in the past 90 days. This is derived by using the Performance score of 77.7 and the Risk score of 26.2.  In addition, the stock has a favorable value growth score of 70, and quality score of 85. In addition, it has a robust track record in the last 5Y regarding its annual sales growth average of 20.5%. Constellation performed

It is expected that CSU will continue its upward trajectory, given its impressive growth, and quality scores.

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

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rkahale@inovestor.com

In our last Number Cruncher we discussed how OneMain holdings (OMF:NYSE), Sabine Royalty Trust (SBR:NYSE), M.D.C Holdings (MDC:NYSE) are companies with dividends of at least 3.2%, double the S&P 500, with dividend growth potential.

Let’s begin with OMF

OMF has an SP score of 67, down by one in the past 90 days. This is derived by using the Performance score of 72.7 and the Risk score of 20.6.  Despite having difficulties in the last year, OMF has been able to maintain an exceptional average 5Y growth of its earnings per share at 32.8%.  Combined with its strong Value score of 83 and Quality score of 78, it is an attractive stock.

The Intrinsic value rose sharply since 2020, but has fallen sharply in the last quarter from $150 to $75, while remaining comfortably above the current price of $45.85. We note that historically, our calculation of intrinsic value was in line with the share price and our most recent estimation of the intrinsic value is significantly higher than the current share price, making it a compelling buy signal.

SBR has an SP score of 84, up by three in the past 90 days. This is derived by using the Performance score of 84.3 and the Risk score of 15.9. The company has an incredible average 5Y annual sales growth of 41.3% and a 1Y growth of 162.8%. Last year, the company saw a significant increase in revenues and profits as oil and gas prices rose sharply in the first half.

In terms of balancing performance and risk, SBR outperforms its competitors in the financial sector by a large margin, specifically on the performance side.

Lastly, for M.D.C Holdings

MDC has an SP score of 77, up by thirteen in the past 90 days. This is derived by using the Performance score of 76.2 and the Risk score of 21.1.  Furthermore, the stock’s favorable value score of 85, growth score of 74, and quality score of 70 makes it an appealing investment opportunity based on those metrics.

While the NOPAT and EVA give a negative signal due to their respective declines, MDC could continue its upward trajectory that began in Q3 2022, given its impressive value, growth, and quality scores seen previously.

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

In our last Number Cruncher we discussed how Bank of Nova Scotia (BNS), Toronto-Dominion (TD) and The North West Company (NWC) are companies with defensive attributes that could limit losses in the event of a market collapse.

Let’s begin with BNS

BNS has an SP score of 66, down by one in the past 90 days. This is derived by using the Performance score of 59.8 and the Risk score of 14.5. Although the bank has hit setbacks in the past years, it is now attractive due to its strong Value score of 77 and a quality score of 75. In addition, it had a terrific year with an increase of 19.8% regarding sales growth and an average 5Y EPS growth of 6.2%.

As to the stock’s intrinsic value, our model values it at 112.89 versus its market price of 69.19. This represents a 63.2% upside. We further observe that the intrinsic value is continuing an upward trend that started in April 2021. Although the trend took a downturn last quarter, we expect the upward trend to continue.

Regarding the Toronto-Dominion bank,

TD’s SP score has increased by 3 points in the past 90 days, reaching 73. This score is calculated using the Performance score of 69 and the Risk score of 15.2. Overcoming challenges in recent years, TD remains appealing due to its high Value score of 72 and Quality score of 80.

Since its low of July 2020, TD’s EVA and NOPAT have until October 2022. We expect this trend to continue and influence the share price in the same manner.

Lastly, The North West Company (NWC).

NWC’s SP score has decreased by 1 point in the past 90 days, reaching a score of 73. This score is calculated using the Performance score of 72.2 and the Risk score of 22.4. NWC is attractive due to its strong Value score of 58 and Quality score of 77. Additionally, the company has seen an average annual sales growth of 4.1% over the last 5 years.

Regarding its Performance vs Risk, NWC exceptionally outperforms its peers in the grocery and retail industries. Consequently, NWC seems the best choice at this moment, at least, compared to its peers.

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

In our last Number Cruncher we discussed howTFI International Inc. (TFII), Richelieu Hardware Ltd. (RCH) and BRP Inc. (DOO) are companies with decent short-term performance with valuation under their historical average.

Starting off with TFII

In the past 90 days, TFII’s SP score has been stable at 79. The SP score is derived from the Performance (88.7) and Risk (24.3) scores. The company has multiple decent factor scores but is most biased towards growth and quality, with scores of 82 and 72 respectively. TFII has a terrific track record with 5-year sales growth of 26.3% and 5-year EPS growth of 40.5%. Moreover, in the last year, the company’s EPS almost doubled its 5-year trend for both sales and EPS.

We can see that the company is a top performer when we compare it to its peers. The company does better than its peers both in terms of performance and risk making a clear choice

Continuing with RCH

ANRCH currently has an solid SP score of 79 which is stable since 90 days. The SP score is determined by their impressive performance (82.6) score and their risk (21.6) score. RCH has a strong bias tilt towards the quality factor, with scores of 79. Similarly to TFII, RCH has a robust track record of increased their sales and their earnings by 15.6% and 28% respectively.

The company had modest growth between 2018 and 2020 due to slugish economic growth, but has since increased its NOPAT by more more than 2 fold in a few years. On the other hand, the share price shows

Lastly, let’s look at DOO

DOO’s current SP score is 76, which has been stable over the past 90 days. The company’s SP score is determined through their promising Performance (79.6) score and unsatisfactory Risk (26.4) score. The company has a factor tilt towards quality with a respectable score of 76. DOO saw a decrease in EPS of 19.5% from last year, down from their 5-year growth average of 121.4%.

According to our system, DOO is currently trading at a high market value added level which represents high expectations from the market towards DOO compared to the last 5 years. Historical pricing suggests that CE’s stock may be overvalued at the moment despite the current price-to-earnings ratio being lower than its historical 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

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

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

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

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

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

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