In our last Number Cruncher, we discussed how MTY Food Group Inc. (MTY:TSX), Linamar Corporation (LNR:TSX), & Parex Resources Inc. (PXT:TSX) are companies that provide a contrast between growth in their fundamentals and stock performance.
MTY Food Group currently has an SP Score of 69, which has not changed in the past 90 days. The score encompasses a performance score of 69 and a risk score of 28.7. MTY’s strongest factors compared to its peers are momentum and volatility with respective scores of 74 and 68. The company’s sales have grown 82.2% in the past year and averaged 25.8% growth in the past 5 years.
MTY Food Group’s recent strength in fundamentals has led their net operating profit after taxes (NOPAT) to increase significantly in the past year. Nevertheless, the stock price is down during that period. If the company can sustain their growth going forward, this could indicate a value opportunity based on Economic Value Added metrics.
Linamar Corporation is also a company that has demonstrated strong fundamentals that have not been reflected in the stock price. Currently, Linamar has an SP Score of 68 which has significantly shifted in the past 90 days, increasing by 10 points. The StockPointer score is comprised of a performance score of 65.9 and a risk score of 25.1. LNR’s leading factors are value and quality, scoring 73 and 67 respectively.
The performance visualizations offered on the StockPointer Scorecard demonstrate how Linamar compared to its peers. In terms of Performance vs Risk, Linamar is leading its peers in both metrics due to its low risk and strong performance. In the last year alone, the company’s sales have increased by 26.3%, growing for the third consecutive year. Additionally, the earnings per share are up 34.2% and return on capital is at a healthy 10% as of Q3 2023, returning to an Economic Performance Index above 1. Despite its recent performance and strong comparison to its peers, Linamar’s stock has not performed as well in recent times.
Parex Resources’ SP Score currently stands at 65 and has not increased in the past 90 days. The score encompasses a performance score of 73.6 and a risk score of 37.1. The company’s strongest factors are its yield score of 83, due to its significant increase in dividend, and a value score of 80. Parex’s sales growth slowed down in the past year, however earnings have continued to grow in that period with EPS growing 44.5%. The company currently trades at a Price / Earnings Ratio of 3.
The strength in fundamentals has had a significant impact on PXT’s value, which can be observed using the intrinsic value estimates. According to these estimates, the energy company’s intrinsic value has been higher than the stock price for 9 consecutive quarters and continues to grow. This is an indication that the company may currently be undervalued based on intrinsic value.
If you have any questions about the article, feel free to contact Anthony:
amenard@inovestor.com
