Number Cruncher Extra – TransAlta Corporation (TA:TSX), Premium Brands Holdings (PBH:TSX), & Telus Corporation (T:TSX)

In our last  Number Cruncher we discussed how TransAlta Corporation (TA:TSX), Premium Brands Holdings (PBH:TSX), & Telus Corporation (T:TSX) are companies with defensive attributes to weather an economic downturn.

Let’s begin with TA

TA has an SP Score of 62, up by 2 points in the past 90 days. The score is derived by a Performance score of 63 and a risk score of 38.1. The company had a significant sales growth of 31.8% and has been able to maintain its 5Y sales growth average at 11.2%. The company has postive earnings for the second time in 5 years. The factor scores are rather low, but the momentum factor is the one that stands-out the most at 68.

the company has greatly improved its operations in the last 5 years, going from a NOPAT of -$47M and an EVA of -$612M to a NOPAT of almost $981M and an EVA of $573.6M.

However, part of this robust performance comes from one quarter that will evaporate from the last trailling twelve months in the next quarter. The next quarter will determine if the company’s performance is likely to be sustainable.

PBH

PBH has an SP Score of 60, down by 1 point in the past 90 days. The score is derived by a Performance score of 60.2 and a risk score of 38.2. The company saw sales increase 15.8% in the last year, close to its a 5-year average at 16.8%. However, earnings decline 33.7% in the last year and the 5-year annualized earnings growth has been a more modest at 5.5%. The company scores well in Volatility and quality at 71 and 69 respectively while it lack value exposure with a meager 39.

The company has been overvalued based on our intrinsic value (IV) calculation since 2020. While the share price declined in last year or two to converge towards the intrinsic value, the company remains about 50% overvalued based on this metric.

T has an SP Score of 64, up by 1 point in the past 90 days. The score is derived by a Performance score of 61.3 and a risk score of 27.1. The company saw sales increase 12.6% in the last year, better than its its a 5-year average of 8%. However, earnings declined 38.2% this year and generally decline every year except for 2021. The earnigns declined on average 8.7% year in the last 5 years. The company scores well moslty in Quality with a score of 75.

While Telus’ short-term performance are not rosy, the valuation came down way more than the actual slip in performance based on the Market valued added (MVA) and the Future Growth Value (FGV). Both metrics indicate that the stock is undervalued compared to historical valuation.

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