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Number Cruncher

Stock screens for investment ideas from professional investors. Exclusive to subscribers of Globe Unlimited.

Entry archive:

Twenty North American stocks resisting downward pressure

KHALED ENIBA

What are we looking for?

North American securities combining positive price momentum, upward analyst revisions and sector outperformance.

The screen

The S&P/TSX composite index and S&P 500 have suffered significant losses this year; the overwhelming majority of sectors are in the red with the exception of TSX materials, and utilities and telecommunication services across both indexes. Yet, there are companies within the beaten-down sectors that have outperformed their peers – resisting the downward pressure to remain positive on a year-to-date basis.

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A lower volatility strategy: 20 stocks with predictable sales, cash flow

CRAIG McGEE

What are we looking for?

Undervalued companies with predictable sales and cash flow.

The screen

The risk-off trade has continued into February as a flight to safety has steered investors away from momentum and riskier equities. Because of heightened volatility in recent years, approaches focused on higher predictability and lower volatility have been fairly successful at offering a smoother return stream.

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Eight U.S. consumer-staples dividend stocks to help you play defence

PETER ASHTON

What are we looking for?

The stock sell-off that tore through world markets in January has many investors thinking about where to best protect their capital in the coming year. A previous article described Canadian opportunities in the defensive sectors of utilities, pipelines and telecom services. In the U.S. market, there are further choices, particularly in the consumer-staples sector – a traditionally defensive area.

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Nine U.S. stocks for contrarian investors

IAN TAM

What are we looking for?

Fundamentally weaker stocks in the United States trading near their 12-month highs, for the contrarian investor.

Today’s model also serves as a warning sign to investors who may own stocks that show the following characteristics.

The screen

Although the S&P 500 showed a positive four-quarter result, I think most investors agree that 2015 was a fairly volatile year relative to previous years, following what was essentially a five-year bull market.

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Eight dividend stocks showing value, momentum in a bear market

PATRICK GATTUSO

What are we looking for?

Technically bullish mid- and large-cap stocks that have strong value momentum scores and pay dividends.

The screen

Volatile is the best word to describe U.S. and Canadian stock markets so far this year. Bear markets lead to exaggerated moves either up or down as every piece of new information magnifies investor sentiment due to investors’ higher aversion to risk. In bear markets, technical analysis tends to gain more attention as investors are looking for breaks in long-term trends.

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Seven defensive dividend stocks in consumer staples, utilities sectors

JEAN-DIDIER LAPOINTE

What are we looking for?

Canadian defensive stocks with high economic performance and healthy leverage ratios.

The screen

We have screened the Canadian defensive sectors (consumer staples and utilities) using five criteria. It is normal that companies in the more capital-intensive utilities sector generate lower return-on-capital (ROC) and higher debt-to-equity ratios than consumer-staples stocks, so the reader will note I used different values to reflect this:

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Seventeen U.S. stocks that have defied market weakness

Ron Meisels and Monica Rizk

What are we looking at?

Positive-trending U.S. stocks.

The screen

We limited our pool to the S&P 100 index.

To find the most positive, we looked at each stock’s 40-week moving average (40wMA). This is the average closing price for the stock over the past 40 weeks. Charting the moving average week by week gives us a sense of investors’ behaviour; are they growing more (or less) enthusiastic about the company’s outlook and are they more (or less) likely to purchase the stock? Generally speaking, stocks that trade above their rising 40wMAs are the best candidates for investments; they are the ones that show a bullish pattern. We included only the stocks with a rising average in the adjoining table.

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Twelve Canadian mid-cap stocks with lower volatility

IAN TAM

What are we looking for?

Low volatility amongst Canada’s mid-cap names.

The screen

Due to the segmented nature of Canada’s equity market, it is difficult to find stocks outside of the S&P/TSX 60 that can be used to create a reasonable portfolio with a focus on minimizing volatility. Given the recent market movements, I thought it would be appropriate to create such a strategy. Using Morningstar CPMS, I’ve ranked Canadian mid-caps based on the following factors:

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Fourteen undervalued Canadian stocks with significant foreign sales

CRAIG McGEE

What are we looking for?

Canadian firms with foreign sales at reasonable valuations.

The screen

It’s been a shaky start to 2016 for equity markets. Year-to-date, the S&P/TSX composite index is down 5.2 per cent, the S&P 500 index is down 6.9 per cent and the MSCI World Index is down 8.5 per cent. The Canadian dollar has also been quite volatile and is currently worth just over 71 cents (U.S.).

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These 15 deep-value stocks have fallen more than 25% over the past year

SAMUEL OUBADIA

What are we looking for?

Stocks that have been unjustifiably tossed aside in the recent downturn.

Given the recent sell-off in equity markets, and stocks trading at significantly lower prices since the start of the year, some value investors may find themselves behaving like kids in a candy store. Our approach to investing in stocks at Lorne Steinberg Wealth Management has always been to look for deep value. While value is important, we also look for companies that are financially sound, generating positive free cash flow, and at the same time, leaders in their respective industries.

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These 21 Canadian dividend stocks surface in hunt for safety, value

Sean Pugliese

What are we looking for?

A while back, a reader approached me looking for some help in analyzing income stocks. My associate Allan Meyer and I thought we would take a closer look at Canadian dividend payers using our investment philosophy focused on safety and value.

The screen

We started with Canadian-listed equities with a market capitalization of $10-billion or more. (We will focus on those under $10-billion in a separate Number Cruncher.)

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These U.S. stocks mix value, insider commitment, price momentum

TED DIXON

What are we looking for?

We want to screen for the 10 highest-ranking stocks listed on either the NYSE or Nasdaq. Rankings are determined by the INK Edge V.I.P. criteria (valuations, insider commitment and price momentum).

This is the same approach we apply to determine membership for the INK Canadian Insider Index, which is used by the Horizons Canadian Insider Index ETF (HII-T).

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How those hot IPO stocks of 2015 are doing now

CHARLES MARTIN

What are we looking for?

Last year was a very strong one for initial public offerings. After the frenzy, I wanted to dive a bit deeper and get an idea of how these companies have done since being listed on the market.

The screen

To obtain a comprehensive list, I used our Deal Screener to pull every IPO in the United States and Canada in 2015. After excluding smaller deals and “blank-cheque” companies, development stage firms with no specific business plans, there were 139 companies remaining. With financial data being somewhat limited, I’ve highlighted some of the more well-known companies that went public last year along with some observations.

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How Canadian bank stocks stack up on valuation, dividend growth

JEAN-DIDIER LAPOINTE

What are we looking for?

Canadian banks with the highest economic performance and growth, trading at low multiples.

The screen

We have screened the Canadian banks (including mortgage-related companies) with only four main criteria, but also added different indicators to our results table to push the analysis a little further. We are looking for positive economic performance, profit and dividend growth, as well as attractive valuation multiples and dividend sustainability to identify long-term investment opportunities.

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Seven positive-trending Canadian stocks

RON MEISELS and MONICA RIZK

What are we looking at?

Positive trending Canadian stocks.

The screen

We limited our pool to the S&P/TSX 60 index.

To find the most positive, we looked at each stock’s 40-week moving average (40wMA). This is the average closing price for the stock over the last 40 weeks. Charting the moving average week-by-week gives us a sense of investors’ behaviour: Are they growing more (or less) enthusiastic about the company’s outlook, and are they more (or less) likely to purchase the stock? Generally speaking, stocks that trade above their rising 40wMAs are the best candidates for investments; they are the ones that show a bullish pattern. We included only the stocks with a rising average in the adjoining table.

More »

Twenty Canadian stocks showing value and profitability

IAN TAM

What are we looking for?

Profitable companies with reasonable valuations relative to their respective sector medians.

The screen

For investors paying attention to market valuations, it would seem that recent market conditions have continued pushed stock valuations to low levels. Case in point, the current median price-to-book ratio of all stocks in the Morningstar CPMS universe (roughly 740 stocks) is 1.07 times book value. Looking over the past two decades, the last time P/B levels reached this level was in November, 2008, during the financial crisis when the median P/B ratio fell to a low of 0.94. With this in mind, I used Morningstar CPMS to create a strategy with a distinct value focus that also considers companies that continue to be profitable within their sectors. The strategy ranks stocks based on the following factors:

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These precious metals stocks could recover their shine in 2016

KHALED ENIBA

What are we looking for?

Canadian precious metals and other mining companies positioned to leverage a weakening Canadian dollar and positive market sentiment toward the sector.

The screen

Coming off an 11-per-cent loss in 2015, the S&P/TSX composite index kicked off the new year with a 4.3-per-cent decline, joining most global equity markets as victims of Chinese market volatility. While the index suffered its worst start to the year since 1998, bullish sentiment toward gold drove the S&P/TSX precious metals index toward a 5.1-per-cent gain in its first week of January.

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Canada’s Big Six bank stocks offer tempting valuations

Craig McGee

What are we looking for?

Canadian banks offering compelling valuations.

The screen

We last looked at North American financials back in September; lingering concerns over oil and gas exposure, low interest rates and slowing growth in lending have continued to depress valuations of the Canadian banks. As of Jan. 7, the median price-to-book ratio for the six largest Canadian banks has dropped to 1.47. Over the past 20 years, we haven’t seen lower levels since the median P/B was 1.43 in September, 1996, and 1.30 in February, 2009. Investors’ concerns are valid and we could still see further declines, but current valuations may be very compelling.

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Eight telecom, utilities and pipeline large caps for a defensive approach

PETER ASHTON

What are we looking for?

Concerns in the Middle East and China have hammered investor optimism and many market watchers are now taking a cautious outlook for 2016. With this in mind, adopting a more defensive position seems prudent.

The screen

We will be using Recognia Strategy Builder to search for large cap Canadian stocks (market cap more than $5-billion) in the telecom, utilities and pipeline industries. These three industries are often thought of as defensive and should fare better than the overall market in the event of a market downturn.

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Top-ranked haven stocks for turbulent times

IAN TAM

What are we looking for?

Picks in haven sectors in Canada for rocky times.

The screen

After a rough start to the new year, skittish investors may want to steer clear of the more cyclical sectors in the Canadian economy as the outlook becomes uncertain. This week, I’ve created a strategy that focuses only on consumer staples and utilities sectors and ranks stocks within these two sectors on the best combination of the following factors:

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Number Cruncher Contributors

Ted Dixon, CFA

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Ted Dixon is co-founder of INK Research. INK stands for Insider News and Knowledge and through www.inkresearch.com is Canada's first on-line financial news and research service providing investor insight into what public company executives and significant shareholders are doing with their ownership interests.

Follow Ted on Twitter @TedDixon

Charles Martin, CFA

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Charles Martin, CFA, works in the Financial and Risk unit of Thomson Reuters and specializes in asset management.

Craig McGee, CFA

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Craig McGee, CFA, is a portfolio manager with The Ullman Group at Richardson GMP in Toronto.