Category

Number Cruncher Extra

Number Cruncher Extra – Stella-Jones, Alimentation Couche-Tard & Metro

In our last Number Cruncher we looked for stocks that don’t attract attention. We managed to find Stella-Jones (SJ), Alimentation Couche-Tard (ATD.B) and Metro (MRU) as potential candidates. In Number Cruncher extras, we use our software Stockpointer to reveal more insights about our picks.

Let’s start with SJ

SJ is identified by our system as a quality stock. The company has achieved stable return on capital with a large spread between its return on capital and cost of capital. The company also generated meaningful growth as sales and EPS grew by 16.4% and 10.3% respectively in the last 5-year.

 

The company still trades around the same price then 5 years ago despite higher EPS impliying a cheaper valuation. While the slowdown in the share price could be rational as the lumber prices should come back to earth, the share price stagnation over this period of time is surprizing considering the performance of the company.

 

ATD.B is also identified as a quality company by our software. The small momentum score reflects the hard start to the year as mentionned in the Number Cruncher. Sales are heavily down year-over-year, but the EPS accelerated to 34.4% compared to its 5-year trend of 25.9%. The lower sales came from lower gasoline revenues, but the margin improvements mitigated the lower gasoline volume.

 

The company NOPAT and EVA improved significantly in the last year. The share price seems to have trouble passing the $45 mark. The market is cautious with oil-related companies. ESG investments are increasingly popular potentially putting pressure on energy-focused companies. The recent green bond issuance combined with the last year great performance could help the stock to go beyond $45.

 

 

Metro has a similar profile than ATD.B, a great company with long-term growth, a decent valuation, but with poor momentum. Sales grew below its 5-trend, but the long-term trend incorporates the acquisition of Jean Coutu, a well-known drugstore in Quebec. The beta of 0.14 combined with its low risk score of around 20 demonstrates how little risky the company is.

 

if we compare the performance and risk score to peers, the company seems to be a solid pick in terms of both performance and risk.

 

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 – Canfor, Labrador Iron Ore Royalty & Calibre Mining

In our last Number Cruncher, we’ve found Canfor (CFP), Labrador Iron Ore Royalty (LIF) & Calibre Mining (CXB) as potential candidates with robust momentum and excellent fundamentals to play the commodities boom. In Number Cruncher extras, we use our Stockpointer platform to reveal more insights about our picks.

 

Let’s start with CFP

The company has a high exposure to value, growth quality factors as well as momentum and volatility to a lesser extent. Its price/earnings ratio of 3.77 certainly explain a part of its high value factor exposure. The company has a solid 1-year sales growth of 33% as well as a decent annual sales growth averaging 10.6% in the last 5-year. The comapny grew its EPS by 24.1% per year in the last 5-year period.

 

Canfor is higher than the X axis which means the company is creating value for its shareholders. The comapny is also at the right of the Y axis meaning that the company is selling at a discount. The company is exactly where we want it to be as a potential buyer. The stock also looks better than its peers, both in terms of profitability (the higher than its peers) and price (rightmost than its peers).

 

The strong income stream is well identified by our yield factor with an incredible score of 95.  It has a balanced factor exposure to quality, value and growth ranging from 75 to 80. The company has a particularly strong five-year EPS growth of 26.7%, showing that it is able to navigate different market environments.

 

 

The company has some volatility in its results, but considering the volatility of iron ore it is quite reasonable.  We come to the conclusion that royalties are potentially less volatile than actual extraction. The NOPAT grows despite large dividends and the EVA constiously grew in the past years. These 2 metrics show a company that creates value for their shareholders in the long term.

 

Calibre Mining has a robust growth factor exposure with a score of 91 which is explained by the extreme annual sales growth and EPS growth in the last years. We need to put it in perspective. Calibre Mining seems to have started to extract gold ore recently and therefore the year-over-year values probably don’t show an adequate picture even if it doesn’t dimish the fact that the recent results are solid.

 

CBX was on a downtrend for few years and our model indicated the company was overvalued due to the intrisinc value being below the share price. In mid 2020, the intrinsic value surged, but the share price didn’t follow as much. At the first quarter of 2021, the intrinsic value stabilized while the share price slipped. We see here a potential entry point.

 

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 – Clorox, Progressive & Autozone

In our last Number Cruncher we discussed how Clorox (CLX)Progressive (PGR) Autozone (AZO) are companies with incredible adjusted profitabily adjusted for risk and valuation. Now, we will look at these with our software Stockpointer.

Let’s start with CLX

The company has a SP score of 78 which is explained by the performance (86.2) and risk (25.1) score. Last year momentum is easily observable in all key metrics such as sales, EPS and performance spread. The company managed to increase its earnings per share by almost 20% per year in the last 5-year period.

We see in this chart that the market potentially overreacted to the company’s short-term profitabily boost and that the share price fell since July. At the current level, the NOPAT continues to grow rapidly and the share price approach a more reasonable entry point.

 

Progressive has a SP score of 76 explained by its performance score (72.5) and risk score (14.6). The company offers as much as 3 factors exposure: quality, value and growth. PGR grew at a rapid rate of 16.3% per year in the last 5-year which helped to increase its earnings per share by 53.2% per year. This performance is possible due to the substantial increase in the performance spread.

 

We see that our system has been fairly close to the actual share price in the past. Currently, due to the short-term boost from the pandemic, the intrinsic value exploded, but the share price didn’t follow. Our system indicated a potential increase around January 2020 since the Intrinsic value was fairly higher than the share price. The stock currently trades around that price. We believe the stock could see a potential increase from this point even if we don’t consider the intrinsic value to be representative of the potential upside.

 

Autozone has a SP score of 77 explained by its performance score (76.3) and its risk score (19.3). The stock has a similar profile than Clorox, slower Sales growth (5-6%), but still maintain EPS growth at more than 15%. This stock is the only one of the three to have the “low risk” factor exposure. We’ll directly pass to the next graph to better visualize that.

 

The NOPAT increased each year in the past five years. In 2018, the performance spread decreased significantly, but it could be because of the Trump tax plan. We would need to look further on this. Otherwise, the large performance spread gives a huge margin of safety that it will add value to shareholders over time.

 

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 – Manulife, Quebecor & Hydro One

In our last Number Cruncher we discussed how Manulife (MFC), Quebecor (QBR.B) & Hydro One (H) are companies with multiple qualities. Now, we will look at these with our software Stockpointer.

Let’s start with MFC

The company has a high score of 72 which is explained by the performance (69.8) and risk (20.1) score. The company strengths are more oriented toward its low valuation risk than its incredible performance although the company’s sales grew at a respectable 21% in the last 5-year period. Its performance spread has been positive in the last 3 years, but it declined during the period.

 

If the FGV is below the historical average, the company is considered cheap relative to the historical average. The company is around its historical mean, but a favorable environment, as mentionned in the Number Cruncher, could push the stock towards its 2017 peak.

 

Let’s continue with QBR.B.

 

QBR.B has a solid SP score of 74 fueled by both its strong performance (80) and low risk (27.9) score. Our system evaluates QBR.B to be a quality and growth company. The company increased its performance spread, in other words, the difference between the return on capital and the cost of capital, increased on a relative basis by 56.6% compared to the previous year. The company rose significantly its EPS although annual sales growth matched the inflation during the period.

The company grew its earnings per share steadily in the last 5-year and as a consequence the share price followed the same trend. A fairly straightforward relationship.

 

Our third pick: H

Hydro has a strong score of 72 explained by its performance score (70.8) and risk score (25) while being identified as a quality and value by our software. Utilities tend to have lower performance score in our system because their return on capital is generally low, but they compensate it by having more leverage than a traditionnal company. Earnings per share rose strongly in the last 3-year and the performance spread has followed the same trend. Sales also started to expend more vigorously 3 years ago. On the other hand, the company’s dividend yield has declined over the past 3 years. The company has potentially increased its capital expenditures instead of hiking its dividend. We do not see this negatively.

 

As mentionned in the Number Cruncher, the company has an excellent ESG score. It is indeed involved in nuclear power, but it is certainly much better than coal-fired power plant. The company has had only a few events, and they have all been rated at a low level of controversy.

 

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 – Stingray Group, Savaria Corporation & Investors Title Company

In our last Number Cruncher we discussed how Stingray Group (RAY.A), Savaria Corporation (SIS) & Investors Title Company (ITIC) could be good candidates to take advantage of the economic recovery. Now, we’re going to look at these stocks with Stockpointer.

Let’s start with RAY.A

 

The company has a high score of 68 in our system. The outlook increased by 10 in the last 90 days showing a strong improvement in the fundamentals. The company increased its sales by 31.5% in the last 5-year period, but had to compromise on its EPS to fuel this growth. The performance spread, the return on capital minus the cost of capital, declined recently due to the pandemic.

The company scores well in various factors compared to peers. It has the second highest overall score based on this metric.

SIS has a similar growthj profile than RAY-A, but it also provided decent EPS growth in the last 5-year. It has a solid score of 59 SP score which is fueled by its strong performance, but with a moderate risk. Our system evaluates SIS to be a quality and growth company while being a bad value based on our Price/Intrinsic value metric as well as other well-known metrics.

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SIS’s return on capital reached 19% in 2017 and 2018, but the economic downturn has hurt the company. If the company could reach the 2017-2018 level again, shareholders could enjoy a incredible price increase.

ITIC has a incredible score of 71 while being identified as a growth and quality. All metrics are positive as the performance score is high, the risk score is low, the sales and EPS growth are highly positive. The company also managed to increase its performance spread. There is nothing negative around here.

As shown by the intrinsic value calculated by our software, the company achieved an impressive performance between 2017 and 2018. The stock experience negative momentum since 2018, but the trend seems to be reversing as the share price seems to converge towards its intrinsic value.

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: Home Depot, O’Reilly Automotive & Tractor Supply Company

In our last Number Cruncher we discussed how Home Depot (HD), O’Reilly Automotive (ORLY) & Tractor Supply Company (TSCO) could be good candidates to take advantage of the economic recovery. Now, we’re going to look at these stocks with our Stockpointer software.

Here is the screener we used to find these incredible companies

Let’s start with Home Depot

 

the company has a high score of 68 in our system. It did not experience significant sales growth, but it did increase the most important metric, the EPS. its performance spread continues to increase, which means that the company is increasing its return on capital while maintaining adequate risk for the return on capital achieved

 

Home Depot has an incredible track record which makes it a high quality stock. It is first in all categories except for the return on equity which can be ignored as the company has negative equity due to the many dividends paid and share buybacks that have been made.

O’reilly Automotive has a similar profile than Home Depot, but with a bigger focus on growth specially in the short-term. It has a solid score of 60 with a higher risk perceived by our software. On the other hand, the beta of 0.92 indicates that the stock should be as much volatile than the market.

 

The growth of O’reilly Automotive is impressive because of its magnitude, but also due to its stability. Sales, operating profit and net income were up every year and stock has been repurchased every year also. There is approximately 25% less share outstanding than in June 2016.


Tractor Supply Company as a strong score of 62 while being identified as a growth, quality and low risk stock. The performance spread is increasing at a rapid pace, specificly 68.3% (relatively to its past performance spread) which is spectacular. Unsurprisingly EPS are up 29.8% year-over-year.

The company has a strong short-term momentum, but we cannot conclude it is the only reason. There is a clear break in the growth of its net operating profit in 2018. In March 2017, the company changed its Chief Financial Officer. It is not known if this decision alone made a difference, but it could be one of the reasons.

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: Alimentation Couche-Tard, Lassonde & Metro

In our last Number Cruncher, we covered Alimentation Couche-tard, Lassonde Industries and Metro. We will go into more detail about these titles with our software.

Here is the screener we used in our last Number Cruncher that you can play with. You also can subscribe the Inovestor for Advisors platform for free here

Let’s start with Alimentation Couche-Tard:

The company is solid despite its decrease in last year-over-year sales due to the decrease in gasoline sales. The increase in sales occurs organically, but also by acquisition, which explains its strong growth. The performance spread is also declining, but we will look at it more in detail and see why it is not a problem.

We see that the company has some volatility in its return on capital and that 2015 was a strong year. Although the software shows a decrease in the performance spread, we don’t think this is a cause for concern.


Lassonde had a good quarter and paves the way for a strong year thanks to the pandemic, which is causing consumers to spend more at the grocery store. The company has been able to generate double digits growth in earnings per share despite low single digits sales growth.

When looking at the Future growth value (FGV) of the company, one notices that the company is severely evaluated by the market. The FGV represents the growth portion of the company that an investor buys. In this case, the FGV is negative, so the investor would buy the company at a discount compared to its current activities. The market considers that the company will have a decrease in its growth in the coming years which may not be justified.

Metro has a very high score in our system. In fact, it is the Canadian company with the second highest score across all sectors. The average profit growth of 42% is certainly a reason. The risk is perceived as very low by our software. A large part of this risk is associated with evaluation, so according to our system Metro is cheap when compared to its previous performance.

Looking at the comparables, the company stands out by being the highest value for the Y-axis, which means that it is the best performer. Moreover, it is in the right-hand quadrant, which means that it is relatively inexpensive. GB is a micro cap of $3M and doesn’t have the stability of Metro.

 

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

Defensive Stocks with High Dividend Growth & Sustainability: BWX Technologies Inc, Quebecor Inc & Telus

In our last Number Cruncher, BWX Technologies Inc, Quebecor Inc & Telus were the top 3 in our screen. In this Number Cruncher Extra, we will go into more detail about these companies in Stockpointer.

The company has a significant SP Score of 60. In the short-term, sales, earnings per share and performance spread is uptrending. The stock clearly has momentum in its fundamentals. The long-term perspective is also good with solid past growth in all the variables. Briefly, it is difficult to say anything negative about these numbers except for the risk score which stands at 48. It’s a bit high, but the performance score of 87 surely compensate that risk.

 

This is the factor comparaison of BWX Technologies Inc. The stock could be classified as a quality and growth stock. The overall ranking is higher than its peers and sends a good signal.

 

Quebecor is the second company of our list. The interessing element with this business is its tremendous dividend growth. The dividend yield, not to be confused with the dividend per share, increased by 54% in the last 5-year. The company aggressively grew it’s dividend resulting in a higher dividend yield and the market didn’t increase as much as the dividend growth. The company has also solid earnings per share in the last year and the last 5-year.

 

This is the Economic Value Added section of Quebecor. The firm increased its NOPAT over the years, but also increased it’s EVA. The EVA can be seen as the value created by a company. Typically, some companies can growth their NOPAT, but engages in non-value generating activities which hurt shareholders in the long-term. In this case, the management intelligently used its capital to generate value.

Telus has the highest score of our Number Cruncher Extra. The performance score is close to 70 and at the same time the risk score is only at 36. With these scores, Telus has a great risk-return profile and a appreciable SP score of 65. The firm is more mature than the others and generated lower growth, but Telus also pays a 5% dividend which represent 64% of its net income. 5.5% growth in EPS and a 5% dividend could be seen as a 10.5% return for its shareholders.


The low risk score can be explained with its high and stable return on capital. It’s important to mention that the company increased it’s net operating profit after taxes (NOPAT) by 35% over 5-year which represents a 6.1% growth. The firm may not be the most exciting in terms of growth, but it is impressively solid.

You can subscribe the Inovestor for Advisors platform for free here

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

5 U.S. banks with solid balance sheets

What are we looking for?

The Canadian banking sector is widely considered to be one of the best and safest banking systems in the world, which explains why Canadians are heavily invested in the six major banks. However, the financial sector, represents 32 per cent of the S&P/TSX Composite Index. To diversify their portfolios, investors might want to consider investing in the U.S. banking sector. In the aftermath of the financial crisis, U.S. banks have become better capitalized, with an increased focus toward a more sustainable business model. Today, we will be looking at five dividend-paying U.S.-based banks with solid balance sheets.

The screen

Our screen of the banks’ subsector of the U.S. financials sector is based on the following criteria:

Market cap of at least US$10-billion;

-A positive EVA figure. Economic value-added (EVA) is a measure of true economic profit created by a company. EVA is calculated by subtracting the Capital charges from the NOPAT (Net Operating Profit After Taxes). The higher the economic value-added is, the more value a company is generating for its investors;

-An EPI figure of at least one. The economic performance index (EPI) is the main indicator to identify how much wealth is redistributed to the shareholders. The higher the figure, the better, and a negative EPI means that the company is not covering its costs of capital;

-Dividend yield of at least 3 per cent. We are looking for banks that consistently share their profits with the shareholders;

Positive earnings per share. We are looking for profitable companies only;

-A price-to-intrinsic value of between 0.5 and two. Price/IV is the price of the stock divided by the intrinsic value of the stock. We are avoiding overvalued and value trap stocks.

-Long term debt-to-equity ratio below two: We are looking for banks with solid bank sheet and low long term debt;

-Current SP score of at least 55: The SP Score is a proprietary scoring system based on StockPointer’s model. It’s a 12 factors algorithm with a focus on quality and value. This metric represents the overall performance of a company by considering multiple risk and performance factors. A high score indicates a high quality stock trading at a reasonable price. (The score range between zero and 100)

For informational purposes, we have also included recent stock price and one-year return. Please note that some ratios may have been reported at the end of the previous quarter.

What we found

TICKER COMAPNY RECENT PRICE ($) EVA ($MIL.) MKT CAP ($MIL.) EPI LT DEBT DIV. YIELD (%) Price / IV EPS CURRENT SP SCORE 1YR PRICE RTN.(%) LT DEBT / EQUITY
JPM-N Jpmorgan Chase & Co. 93.25 1029.82 284090.00 1.00 299344.0 3.89 1.08 8.88 65 -17.48 1.05
USB-N U.s. Bancorp 34.94 1214.38 53215.13 1.15 52298.0 4.73 0.93 3.93 65 -31.55 0.98
NTRS-Q Northern Trust Corporation 75.47 227.54 15700.09 1.16 4142.2 3.58 1.18 6.73 64 -19.68 0.26
DFS-N Discover Financial Services 41.37 806.58 12672.10 1.41 26098.0 4.82 0.67 6.74 68 -47.27 2.06
SYF-N Synchrony Financial 18.51 1178.58 10798.20 1.45 16063.0 5.41 0.54 4.46 58 -42.92 1.49

Five names made today’s list, ranked by market cap, JPMorgan Chase & Co., which shows the highest EPS, has been growing its revenues constantly since 2015. Although the bank’s performance spread (ROC – COC) was negative from 2016 to 2018, it has been positive for the past two years, which is a good indication for shareholders.

U.S. Bancorp is also a big player in the banking sector with a market cap of US$51-billion. The bank has beaten or matched EPS estimates for the past five years. The bank missed its last earnings estimate because of loan defaults related to COVID-19. With a current operating value of US$55.8-billion, the bank is trading at an 8 per cent discount compared with its current market value. At a current price of $35 per share, it’s worth considering adding it to your portfolio.

For more details about JPMorgan and U.S Bancorp stock and performance, please subscribe the Investor for Advisor platform for free

For readers with an Inovestor for Advisors account, Here is the screener we used

Number Cruncher Extra: Viemed Healthcare, Information Services Corporation, Tecsys and More

Today, we will discuss about Canadian small caps that have low debt. This week we had a lot to say about the companies we found in our screener.  Viemed Healthcare (VMD), Information Services Corporation (ISV), Senvest Capital (SEC), Magellan Aerospace (MAL), Tecsys (TCS) and Absolute Software Inc. (ABT) was in our list.

Let’s see the different outlooks from our software:

We added a specific graph or table for each company. We will discuss them below:

Viemed Healthcare

Information Services Corporation

Senvest Capital

Tecsys

Mallegan Aerospace

Absolute Software Corporation

Viemed Healthcare has a strong outlook with a SP score over 60. Recently the score decreased, but by personal experience it is hard for a company to stay above 65 because it is a really strong score. We have growth in sales and earnings per share (EPS) over the long term. The performance spread, the difference between the return on capital and the cost of capital, is positive. It means the company creates value for the shareholders in the long term. The net income is negative on a 1-year basis, but the operating cashflow before considering the change in working capital is higher than last year. we don’t think we should bother with a decrease in last year EPS at this point. The company is also well positioned compared to the other companies of its industry based on the factors comparison table.

Information Services Corporation is at a very high score at 65. The score increased by 2 at it last review which is great specially at this score level. Once again for this company, sales and EPS saw growth. The performance spread score is above 0. The company pays a dividend and the current level is equal to one see in 2015 and 2018 which is not a bad or good sign. The company spends $14M on the dividend each year, but the company free-cash-flow has been 1.5x to 2x this amount in the last 5-year. It seems it can support its dividend easily.

Senvest Capital has the lowest SP score of our group at 53. By looking at the second picture, we can see the NOPAT is volatile. The company reports all their investment results in the income statement and the operating cashflow because of the business definition. This leads to weird accounting in some cases that are not economically meaningful. We suggest the investor to have good knowledge of accounting rules concerning the classification of cashflows and revenue recognition to fully understand the situation of the company. The company is often affected by their investments in the market. However, the company shows good results overall despite the volatility and the uncommon accounting.

Tecsys has a low SP score compared to the others, but there is interesting information about this company. Sales and EPS increased a lot in the last year and the last 5-year. The performance spread is also above 0. The company had great momentum until 2019. The results were a bit disappointing in 2019. The company shows higher volatility in its 5-year result than the others. The company still display characteristics linked to a good company. It has a great return on capital and doesn’t need debt to grow. Its exposition to hospital could lead to higher revenue and profit in the next quarters.

Mallegan Aerospace had a strong decline recently because of the recent turmoil. The company also shows slowing operating profit and the current environment will not help. The industry has a lot of difficulty and it is hard to find good points in the short-term for this company. However, the stock has a moderatly good historic and balance sheet. The lower valuation could be an attractive entry point for the long term investor. There is certainly “blood in the street” as Warren Buffet famously says.

Absolute Software Corporation has a decent score of 58. The company is identified as bad growth by our software. Surely, the operating profit didn’t grow in the last 5 years as seen in the related graph, but the company has some momentum in the last 2 years. It is  possible the company will have good results because of the current environment. Companies had to figure how to work remotely and cyber security is an important part of it.

You can subscribe the Inovestor for Advisors platform for free here

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