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Number Cruncher Extra – Parex Resources (PXT:TSX), Definity Financial Corp. (DFY:TSX), & Pason Systems Inc. (PSI:TSX)

In our last Number Cruncher we discussed how Parex Resources (PXT:TSX), Definity Financial Corp. (DFY:TSX), & Pason Systems Inc. (PSI:TSX) are companies who perform well in an inflationary environment.

PXT has an SP Score of 69, down by 1 point in the past 90 days. This is derived by using the Performance score of 80.2 and the Risk score of 35.1. The company performed exceptionally well last year with a growth of 130.9% in its earning per share and it was able to recover from the 2020 drawdown maintaining its average 5Y growth of its earning per share at 66%.

The company’s good performance has kept its intrinsic value above the market price since Sept 2018. Due to last year’s performance, we note that the intrinsic value has sharply increased to $48.8 with market price currently trading at $26.9. As per our calculations of the intrinsic value the company’s price is approximately 280% undervalued, making it a compelling buy signal.

DFY has an SP score of 49, increased by 1 points (Performance score: 42.6 & Risk score: 25.7) in the past 90 days. The company has scored a Growth score of 72, Quality score of 78 and the volatility score of 81.

The company has been able to maintain an average 5Y earnings per share growth of 281.5%, however, the 1 Y growth is 8%. Last year, the company saw an increase of about 10% in revenues.

Our quarterly EVA, NOPAT chart shows the company’s economic performance improving. In the last quarter of the previous fiscal year, we note the sharp increase in the Net operating profit after tax thereby increasing its economic value added. The earnings are an essential factor in determining a company’s intrinsic value. We advise to be cautious and evaluate if the company’s last quarter growth was an exception.

Parson System Inc. was able to increase its SP score by 6 points raising it to 73 within the last quarter. The company’s revenue growth of 50.4% was significant. Despite its negative earnings in the previous year, the company greatly increased its 1Y earnings per share by 161.9%.

The company’s intrinsic value has surpassed its market price in the recent quarter. In our opinion, based on our calculations, it may offer about 28.6% upside potential. We believe if the company is able to maintain its earnings growth trajectory and increase its intrinsic value, the company could be a great opportunity.

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