As the year 2014 draws to a close, and with all Q3 results in the books, we bring our attention this week to StockPointer’s Top-20 SPScore list for the S&P/TSX Index. Download
As an overall look, the group averages an EPI of 2.1, confirming the high level of wealth creation offered by this group of companies. Value-wise, the Top-20 is trading at an average P/IV ratio of 0.72, presenting a discount of over 25%. This multiple is also attractive relative to the S&P500 Top-20, which is currently trading at an average P/IV of 0.86.
A couple of companies stick out. Shaw Communications Inc (SJR.B) is the company which has seen its SPScore increase the most over the last 90 days, in addition to offering attractive P/IV, FGV/EV, and EPI multiples. Shaw Communications has been a holding in our Canadian model portfolio since September 2012.
Constellation Software Inc (CSU) generates the highest EPI in the group, which can also partially explain the premium of 31% (FGV/EV) paid for future growth expectations. CSU’s FGV ratio suggests a market which is willing to pay a little extra for this company that creates high levels of shareholder wealth, and that also has a strong history of growth through acquisitions.
We will also remark that only a single Energy company, Imperial Oil Ltd (IMO), stands in this Top-20. Same thing for the Materials sector, where only Labrador Iron Ore Royalty (LIF) is found. Representing the Financials sector, we can find most of the major Canadian banks in this Top-20, except BMO, which still scores 39th overall in the S&P/TSX. Note that when using the SPScore function, you can always select up to the Top-100 companies within any desired group.