What are we looking for?
Companies that have recently seen analysts raise their earnings forecasts and which have growth and value characteristics.
Companies whose earnings estimates have been revised upward by analysts often reflect improving fundamentals, stronger-than-expected business results, or a changing narrative that supports future growth.
Academic research and historical market data demonstrate that stocks with positive earnings revisions frequently outperform in the months that follow, as the market gradually incorporates these improved expectations. When paired with solid operational metrics, this creates a compelling investment thesis.
The screen
We screened the Canadian universe using the following criteria:
- Market capitalization greater than $5-billion dollars;
- 90-day earnings-estimates revision greater than 5 per cent;
- Number of analysts covering the stock greater than five;
- Forward price-to-earnings ratio lower than 25
- Five-year annualized sales growth per share greater than 5 per cent
For informational purposes, we also added price-to-earnings ratio, one-year price return and dividend yield.
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What we found
Stocks with positive sentiment
| TICKER | NAME | PRICE ($) | MKT CAP (Bil. $) | 90D EPS REV. (%) | NUM. ANALYSTS | TRL P/E | FWD P/E | 5Y ANN. SALES GRTH. (%) | 1Y PRICE RTN. (%) | DIV. YLD. (%) |
| QBR-B-T | Quebecor Inc. B | 39.15 | 9.0 | 9.7 | 7 | 11.8 | 10.7 | 9.8 | 34.8 | 3.6 |
| NGD-T | New Gold Inc. | 6.59 | 5.2 | 27.3 | 6 | 25.1 | 11.7 | 6.7 | 124.9 | – |
| NA-T | National Bank of Canada | 133.8 | 52.4 | 5.0 | 8 | 12.1 | 12.3 | 8.6 | 13.4 | 3.5 |
| FTT-T | Finning International | 52.73 | 7.1 | 5.9 | 5 | 13.6 | 12.7 | 19.9 | 30.2 | 2.3 |
| K-T | Kinross Gold Corp. | 20.68 | 25.4 | 45.7 | 10 | 16.7 | 12.8 | 7.2 | 89.2 | 0.8 |
| HBM-T | Hudbay Minerals Inc. | 13.19 | 5.2 | 5.7 | 9 | 16.1 | 13.8 | 6.6 | 3.0 | 0.2 |
| ARTG-T | Artemis Gold Inc. | 26.71 | 6.1 | 68.5 | 7 | 514.6 | 15.6 | 32.5 | 142.8 | – |
| CPX-T | Capital Power Corp | 56.01 | 8.7 | 14.0 | 5 | 18.5 | 18.0 | 20.1 | 40.9 | 4.7 |
| AEM-T | Agnico Eagle Mines Lt* | 161.6 | 81.4 | 21.9 | 11 | 23.0 | 18.5 | 5.5 | 72.1 | 1.4 |
| LUG-T | Lundin Gold Inc. | 71.87 | 17.3 | 28.8 | 8 | 23.1 | 20.4 | 41.1 | 251.4 | 2.3 |
Quebecor Inc. (
New Gold Inc. (NGD-T ) is a Canadian gold mining company that has surged 138.1 per cent over the past year, driven in part by a roughly 40-per-cent rise in gold prices to about US$3,300 per ounce from around US$2,300. Analyst sentiment has turned notably positive, with earnings estimates increasing by 27.3 per cent over the past 90 days. While the company’s five-year revenue growth is a more modest 6.7 per cent, its valuation remains appealing at 11.9 times forward earnings. New Gold stands out as a solid candidate for investors seeking exposure to gold.
National Bank of Canada (NA-T ), the sixth-largest bank in the country, narrowly meets our screening criteria with earnings estimates revised upward by exactly 5 per cent over the past 90 days. While its share price performance over the past year has been modest at 13.4 per cent, the bank has delivered solid five-year annualized revenue growth of 8.6 per cent. Trading at 12.3 times forward earnings, National Bank provides a compelling entry point into Canada’s leading financial institutions.
Investors are advised to do further research before investing in any of the companies listed in the accompanying table.
For more details about these stocks, subscribe to the Inovestor for Advisors platform for free.
Anthony Ménard, CFA, is vice-president of data management at Inovestor.
