Category

Number Cruncher Extra

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

Number Cruncher Extra – A10 Networks, PayPal & Power Integrations

In our last Number Cruncher we discussed how A10 Networks (ATEN), PayPal (PYPL) & Power Integrations (POWI) were stocks with improving fundamentals and full of potential.

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

Please note that this article was not written at the same time as the Number Cruncher. The numbers in the graphs may vary from the article as our score system is dynamic particularly during earnings season.

 

Let’s start with ATEN


The company has a score of 60 in our system with a 90 days increase of 16. The SP score is derived from the performance (59.5) and risk (36.4) score. The company has a small growth bias with a score of 70, but as we see, the company needs to prove itself. The short-term earnings per share growth shows that the company passed from being little to not profitable to a more comfortable position.

 

For a long time, our system considered the company to be overvalued given its low profitability and growth opportunies. We can see the large increase in the intrinsic value in the last quarter. The magnitude of the increase is intriguing and would require more research to better understand.

 

Let’s continue with PYPL

The company has a score of 64 in our system with a 90 days increase of 1. The SP score is derived from the performance (72.8) and risk (38.7) score. The company has a quality and growth bias with a score of 85 and 80 respectively. The company has achieved healthy five-year sales and EPS growth of 19.5% and 34.9% respectively.

 

One issue with Paypal is its absolute valuation specifically since the beginning of the pandemic. The future growth value (FGV) represents the growth that the market expects from the company. We see that the FGV attributed by the market grew quickly during this period and now it is falling back. Is it a healthy pullback from high valuations or an overreaction? It is hard to tell because the current operating value, the tangible value of the company, also grew a lot during the period.

 

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 (83.9) and risk (35.2) score. The company has a quality, yield and growth bias with a score of 79, 78  and 76 respectively. Annual sales jumped vigorously in the last year and the company maintained a solid 14.5% annualized sales growth in the last 5 years. We see that earnings fell -26.9% since last year and we should investiguate this further.

As we see, the decrease in the EPS over the one-year horizon seems to be caused by an extraordinary event that boosted the previous EPS. When we look at the last 3 EPS, we observe a healthy trend. Thankfully, nothing seems scary 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

Number Cruncher Extra – Mueller Industries Inc, Buckle Inc & Sleep Number Corporation

In our last Number Cruncher we discussed how Mueller Industries Inc (MLI), Buckle Inc (BKE) & Sleep Number Corporation (SNBR) were stocks with performance metrics through the roof. Now, we will look at these companies with our software Stockpointer.

Here is the screener we used to find these stocks

Let’s start with MLI

The company has a high score of 78 in our system. The SP score is derived from the performance (84.9) and risk (23.7) score. The company has a quality bias. The company has experienced incredible growth in the last year while having a respectable growth in the last 5 years.

 

We see that the company increased significantly its performance spread over the last 5 years. The EPI also stands at a healthy 2.6 which means the company generates a return on capital 2.6 times higher than its cost of capital and thus generated value for its shareholders.

 

let’s continue with BKE

BKE has a solid SP score of 79 fueled by its strong performance (83.6) score and risk  score (22.5). Our system evaluates BKE to be an equal weighted stock in terms of factors. The major part of Buckle performance is due to last year. Sales skyrocketed as well as earnings which gave positive long-term and short-term results. The earnings per share growth is reasonable even if we exclude last year, but below MLI.

 

We see that NOPAT increased a lot in the last year, but not much previously as explained in the scorecard. However, the EVA graph shows that the company increased its EVA despite low sales growth which is a positive sign.

 

 

Finally, SNBR

 

SNBR has a top-tier SP score of 80 which is based on the performance score of 80.9 while the risk score of 19.8. Our system considers SNBR to be mainly a quality company, but with some volatility and poor yield metrics.

 

SNBR is a top performing company as seen by the pfscan (much higher than the X line and peers) while trading at a moderate level (close to the Y line).

 

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 – Power Corporation of Canada, Summit Industrial Income REIT and Tourmaline

In our last Number Cruncher we discussed how Power Corporation of Canada (POW), Summit Industrial Income REIT (SMU.UN) & Tourmaline (TOU) were stocks with high profitability and low price-to-book. Now, we will look at these companies with our software Stockpointer.

Here is the screener we used to find these stocks

Let’s start with POW

The company has a high score of 73 in our system. The SP score is derived from the performance (69.8) and risk (15.5) score. The company has great value and yield. The performance decreased overtime which is negative, but sales and earnings per share grew at a healthy pace specially in the last year.

 

Our system has long considered POW to be undervalued, but this time the market seems to agree with our views. As we see, the intrinsic value is still higher than share price and so the share price seems to have room to increase even more.

 

let’s continue with SMU.UN

SMU.UN has a solid SP score of 63 fueled by its strong performance (60.93) score and risk  score (30.2). Our system evaluates SMU.UN to be an equal weighted stock in terms of factor except for the lack of momentum. Summit had robust sales and earnings growth this year while having incredible 5-year metrics.

 

Based on Stockpointer, SMU.UN is the best of its class compared to other REITs. It is higher than the horizontal line, meaning that the stock is profitable, and is in the right cadran meaning that the stock is still considered cheap.

 

Finally, TOU.

 

TOU has a below average SP score of 53 due to its lack of long-term performance, the performance score is of only 48.2 while the risk score stands at 29.4. Our system considers TOU to be a value quality with a lot of growth potential.

TOU is a riskier pick as seen by its performance spread. The company mostly destroyed value for shareholders in the last 5 years. We need to consider that the environment wasn’t easy for oil and gas companies. Has the time changed? Perhaps.

 

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 – Pfizer, Watsco & PepsiCo

In our last Number Cruncher we discussed how Pfizer (PFE), Watsco (WSO) & PepsiCo (PEP) were good candidates if we wanted to protect ourselves against a market correction. Now, we will look at these stocks with our software Stockpointer.

Here is the screener we used to find these stocks

Let’s start with PFE

The company has a high score of 73 in our system. The SP score is derived from the performance (72) and risk (23) score. The company has a great yield and quality score, but the volatility factor seem to be an issue.

In the last 3 years, the stock price lost approximately 20% of its value 3 to 4 times. We cannot consider the stock to be “low vol”. However, the stock grew by more than 35% since the Feb 14. The beginning of the market crash and it rebounded fairly quickly during the crash. In may 2020, the company was already at its pre-pandemic level.

Let’s continue with WSO

WSO has a solid SP score of 69 fueled by its strong performance (81.3) score and risk  score (34.6). Our system evaluates WSO to be a quality company with a yield/growth/volatility tilt. The company had robust sales and earnings growth this year while having more than decent 5-year metrics.

WSO had NOPAT and EVA growth that were acceptable, but not fantatistic. However, since the pandemic the company is generating important EVA and NOPAT growth is the reason behind the sharp share price increase since the pandemic.

PEP has a solid SP score of 65 fueled by both its (71.4) and risk (36) score. Our system evaluates PEP to be a quality and yield company which is not surprizing.

Based on the Intrinsic value of the company, our system constantly undervalue the value of the company potentially due to its qualitative aspects. Recently, we see the company exceeded it last intrinsic value peak of 2019 and had a solid momentum both in its share price than 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 – Spin Master, Linamar & Sleep Country

In our last Number Cruncher we discussed how Spin Master (TOY), Linamar (LNR) & Sleep country holdings (ZZZ) generate solid free cash flows. Now, we will look at these stocks with our software Stockpointer.

Here is the screener we used to find these stocks

Let’s start with TOY

The company has a high score of 68 in our system. The SP score is derived from the performance (68.5) and risk (32.1) score. The company doesn’t distinguish itself by its factor exposure. The important EPS growth in the last year is principally due to poor performance in the last year. Although, The company has an impressive 5-year EPS growth of 53.1%.

The company has a ESG risk rating stranding at 13.2 which is much lower than the S&P/TSX which stands around 20. With a score of 7 of its overall managed risk score, the company seems to take desirable actions towards its notable material ESG issues. The overall exposure score of the company towards ESG issues is relatively low-to-moderate at 20.2.

Let’s continue with LNR.

 

LNR has a solid SP score of 67 fueled by both its strong performance (63.9) and risk (21.1) score. Our system evaluates LNR to be a value company with a quality tilt. The poor performance in all the metrics reflect the cyclicality of their business, but these should improve going forward given the strong demand by consumers.

The MVA represnts the premium that the market attributes to the company. Currently, the company is in the middle of its historical valuation. The company not expensive, but still more expensive than in 2019-2020.

 

Finally, ZZZ.

ZZZ has a solid SP score of 73 fueled by both its strong performance (77.8) and risk (28.6) score. Our system evaluates ZZZ to be a company of quality due to its score of 89. The company growth much higher than its historical norm ( 1-year 30.7% VS 5-year 12.4%). Earnings growth follows the path buth with a stronger trend.

The company’s share price is much more volatile than the result of the company. The NOPAT is fearly stable and the EVA tends to grow over time and generate value for its shareholders.

 

 

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 – Netflix, Nike, Etsy & Amazon

In our last Number Cruncher we discussed how Netflix (NFLX), Nike (NKE), Amazon (AMZN) & ETSY (ETSY) are companies with multiple qualities. Now, we will look at these stocks with our software Stockpointer.

Here is the screener we used to find these stocks

Let’s start with Netflix

The SP score of Netflix is 52 which is explained by its performance score of 71 and risk score of 53. The risk score is high compared to other companies and this is why the SP score is impacted. The company grew at a relatively constant rate of 29.1% in the last 5-year period while earnings grew by an impressive 81.8% per share during the same period. T

 

We can see here the margin improvement we talked about in the Number Cruncher, but translated into return on capital. The return on capital passed from 8.1% to 13.1% in the last 5-year. On the other hand, the company was judged less risky by investors. The cost of capital decreased from 12.1% to 8% during the same period. Consequently, the performance spread increased from -4% to 5.1% between 2017 and 2021.

 

The SP score of Nike is 63 which is explained by its performance score of 75 and risk score of 41.The last year performance of Nike is easily visuzalied by the earnings per share growth of 123.5% while sales grew by 19%.

 

Nike is a fantastic company, but we think investors need a bit of caution concerning the valuation. The share price tripled in the last 5-year, but earnings grew by only 50%.Was the market pricing not aggressive enough in the past or maybe the future is rosier than it was in the past? It is possible, but it is good to keep in mind that the valuation is not what it used to be.

 

ESTSY has a SP score of 57 which is explained by a performance score of 63 and a risk score of 44. ETSY is a small E-commerce company, but with a lot of potential.  Its 5-year sales growth almost doubled Amazon (as we’ll see next). The company seems to have reached a size large enough to reach a certain threshold of profitability as we see the explosion of the EPS in the last year. Without a surprize, the company has a growth score in the top of our database with a score of 93.

 

The current operating value (COV) of ETSY multiplied by 10 since 2016 showing that the company created substantial tangible value during this period. The share price exploded by 20 during this period. The difference between the share price and the COV is explained by the increased expectations about the company. Back in 2016, investors probably had low expectations. The expectations increased given the extraordinary results in the pandemic environment,

 

Amazon has a SP score of 64 which is explained by a performance score of 76 and a risk score of 40. Amazon, the McDonald of E-commerce, is the largest and most known e-commerce company in the world. This monster is getting bigger and bigger every year. The company has one of the highest, if not the highest, revenue of our entire database, which includes Canadian, U.S. and ADR stocks, as shown by the 100 percentile.

 


The NOPAT (orange line) and the share price (blue line) touched themselves in 2019 and again in 2021 showing lower valuation based on historical figures.  The EVA (green line) increased substantially since 2020 showing robust value creation by Amazon during the pandemic.

 

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 – 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