For the first content analysis of 2015, we will look at the pre-built “Canada 60” PFScan, which is available at all times in StockPointer. This portfolio replicates, as closely as possible, the S&P/TSX 60 Index. Note that several other pre-built PFScans are also available for you, including: ‘Canada Composite’ (S&P/TSX Comp.), ‘Canada Dividend’ (S&P/TSX Dividend Aristocrats), ‘US Tech 100’ (NASDAQ), ‘US 30’ (Dow Jones), ‘US 100’ (S&P100), and the ‘US 500’ (S&P500). Download
Within PFScan you can perform an analysis on the metrics and indicators of each constituent individually, or can take advantage of a visual representation of the index as a whole on a basis of wealth generation (Return on Capital divided by Cost of Capital, Y-axis) and future growth value (X-axis). The weighted average position of the portfolio will be represented by the yellow triangle labelled “PF” – this displays the wealth generating capacity and future growth value potential of the Index (or portfolio) overall.
As of January 5th 2015, the Canada 60 portfolio (see PF in attached file) still trades at a premium relative to the future growth value of its constituents, despite the difficult end of year endured by most companies in the Energy and Materials sectors. Several wealth-creating companies currently trade at a discount (upper-right quadrant)—notably, Canada’s 3 principle telecommunications providers. We’ll also acknowledge a substantial proportion of the companies in this index trading at a premium without having been able to create wealth (EPI below 1.0) over the last 12 months (lower-left quadrant).