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Number Cruncher

Screens that break down the numbers from our investment reporters

Entry archive:

How trading momentum can help you size up these top IT stocks

RON MEISELS and MONICA RIZK

What are we looking at?

Canadian and U.S. information technology stocks.

The screen

We limited our pool to the S&P/TSX 60 index and the S&P 100 index.

To find the most promising, we looked at each stock’s 40-week moving average (40wMA). This is the average closing price for the stock over a period of 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 identified the status of each stock’s average (rising, falling or flat) in the adjoining table.

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These 20 U.S. stocks show both value and momentum

IAN TAM

What are we looking for?

U.S. stocks that exhibit good value and momentum characteristics.

The screen

In last week’s Number Cruncher, I looked at names in Canada that exhibit reasonable valuations but also show upward price and earnings momentum. This week I revisit this strategy for the U.S. market.

Recall that value stocks exhibit low price multiples but can be susceptible to the value trap when prices remain suppressed over time because of company-specific or sector conditions. Momentum stocks show positive price returns over the short term but are often highly sensitive to market movements.

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As oil prices go, so go these 10 non-resource stocks

Ryan Gottschalk

What are we looking for?

Companies trading on the TSX exhibiting a strong positive correlation with the price of oil but not classified within the energy or materials sectors. These companies are expected to follow oil price movements.

The screen

As the price of oil has fluctuated dramatically over the past six months, it is difficult to predict future movements and when a reversal in recent trends might be expected.

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These 10 refinery stocks blend value, growth

CRAIG McGEE

What are we looking for?

Relative value and strength in the oil and gas refining sector.

The screen

Within the beaten-up energy sector, midstream and downstream firms focused on transport, processing and storage of oil and gas have been able to weather the storm much better than their exploration and production counterparts. For the current year, the median three-month earnings estimate revision for the S&P 500 energy sector is minus 42 per cent compared with plus 25 per cent for the S&P 500 oil & gas refining and marketing sector.

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Health care, industrials and tech: 10 top-ranked stocks

TED DIXON

What are we looking for?

The 10 highest ranking stocks in some of Canada’s most innovation-dependent sectors: health care, industrials and technology (HITs). Rankings are determined by the INK Edge V.I.P. criteria (valuations, insider commitment and price momentum). This is the same approach we apply across the broad market to determine membership for the INK Canadian Insider Index, which is used by the Horizons Canadian Insider Index ETF (HII-TSX).

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Avoid value traps: These 20 stocks mix value with momentum

IAN TAM

What are we looking for?

Stocks that avoid the value trap. For this, we turn to a CPMS value momentum strategy.

The screen

Value stocks appear underpriced relative to their peers or their sectors and may look at first glance to be a great bargain. However, when company or sector conditions don’t improve over a reasonable time frame, a stock price can remain suppressed – hence the pitfalls of the value trap.

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Fifteen global shipping stocks to keep on your radar

MICHAEL BOWMAN

What are we looking for?

Since the St. Lawrence Seaway opened this month, my colleague Rob Belanger and I thought we would take a look at some shipping stocks.

The screen

We started with international companies larger than $700-million (U.S.) in market capitalization and we sorted them from the largest to the smallest.

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Seven U.S. insurance stocks with attractive fundamentals

NICK WINCH

What are we looking for?

U.S. insurance industry stocks with attractive fundamentals.

With many expecting the U.S. Federal Reserve to raise interest rates as early as June, the insurance industry is one that has historically been highly sensitive to interest rate changes. With a focus on current and five-year performance, we look for insurance stocks that are well positioned moving forward.

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Searching for value in the financial sector

RON MEISELS AND MONICA RIZK

What are we looking at?

Canadian and U.S. financial stocks.

The screen

We limited our pool to the S&P/TSX 60 Index and the S&P 100 Index.

To find the most promising, we looked at each stock’s 40-week moving average (40wMA). This is the average closing price for the stock over a period of 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.

More »

Canadian energy companies with takeover potential

IAN TAM

What are we looking for?

Value picks in the Canadian energy sector for potential takeovers.

The screen

With the recent announcement of the “megamerger” between Royal Dutch Shell and BG Group, investors may be on the lookout for more mergers or acquisitions on the horizon in Canada’s oil patch. With U.S. Brent still sitting under $60 (U.S.) a barrel, the sector may be ripe for some additional consolidation.

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These 10 companies excel at putting capital to work

CHARLES MARTIN

What are we looking for?

Canadian companies that are growing their free cash flow, reinvesting that cash into the business and are yielding a high return on those investments.

The screen

One of the best books I read last year was called The Outsiders by William Thorndike. The author highlights eight top performing CEOs and finds a common attribute of their success: They excelled at capital allocation. Let’s take a closer look.

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These 19 small caps show strong dividend growth momentum

TIM SHUFELT

What are we looking for?

U.S. small capitalization stocks with dividend growth potential.

Recent data show that the pace of dividend growth among larger U.S. stocks is slowing. While payouts are still on the rise on average, dividend reductions by energy and materials companies have cut into the rate of increase.

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Nine all-star aerospace and defence stocks

PETER ASHTON

What are we looking for?

U.S. listed aerospace and defence stocks that offering good growth prospects and reasonable valuations.

In the past 10 years, the U.S. aerospace and defence sector has performed extremely well. Over this period, the S&P aerospace and defence index delivered a 167-per-cent return, compared with just 71 per cent for the S&P 500. Furthermore, these industries tend to operate with very long planning horizons and tend to fare better in market declines than do many other sectors. This is an interesting consideration in light of U.S. markets hovering at or near record highs.

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Check out the high reinvestment rates in these 10 Canadian stocks

IAN TAM

What are we looking for?

Canadian stocks growing their assets by reinvesting profits back into the company.

The screen

In this week’s screen, we revisit a model that focuses on stocks with high reinvestment rates. Remember that the reinvestment rate measures the percentage of a company’s earnings (after paying out dividends) over the book value of a company’s equity. Companies that reinvest back into the business are expected to have good future growth prospects. In a previous column, I considered only large market cap companies in Canada. In this week’s screen, I removed this filter to include smaller companies as well. Specifically, I ranked all the stocks in the CPMS database on the best combination of the following factors:

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Insurance company stocks: As interest rates rise, so do profits

MICHAEL BOWMAN

What are we looking for?

Federal Reserve chair Janet Yellen said last week that the Fed is giving “serious consideration” to beginning to reduce its accommodative monetary policy and a rate hike may be warranted later this year.

Since insurance companies derive more profits in a rising interest rate environment, my colleague Rob Belanger and I thought we would take a look at the sector.

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These 10 low-beta U.S. stocks offer value, growth

NICK WINCH

What are we looking for?

Following up on our previous look at well-priced, low-beta Canadian companies, we’ve searched the S&P 500 to find similar U.S. companies that also offer value-creating economic performance.

The screen

We searched the S&P 500, filtering for the following metrics:

– beta below 1.0; (A beta of 1.0 indicates a stock is trading in line with the market – the lower the beta, the less volatile);

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Consumer staples: A strong sector, but which stocks are most promising?

RON MEISELS AND MONICA RIZK

What are we looking at?

Canadian and U.S. consumer staple stocks.

The screen

We limited our pool to the S&P/TSX 60 index and the S&P 100 index.

To find the most promising, we looked at each stock’s 40-week moving average (40wMA). This is the average closing price for the stock over a period of 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 identified the status of each stock’s average (rising, falling or flat) in the adjoining table.

More »

These U.S. stocks make top 10 list for dividend growth

IAN TAM

What are we looking for?

U.S. dividend-growth companies in sectors that are under-represented in Canada.

The screen

Canadian equity markets are disproportionally weighted in our country’s largest sectors: banks/financials, energy and basic materials. As a result, the typical Canadian investor’s portfolio may not represent all sectors appropriately, leading to some potential missed opportunity. This week, I look south of the border for some conservative stock picks. Specifically, I ranked stocks based on the best combination of the following factors:

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Beaten-down stocks expected to show profit growth

LUKE KAWA

What are we looking for?

Beaten-up stocks that analysts believe will grow profits this year.

With the S&P 500 within 1.4 per cent of its all-time highs (and the S&P/TSX composite further away, thanks to the plunge in oil prices), investors might be finding it difficult to find value in equity markets.

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These 15 stocks are gushing cash

SAMUEL OUBADIA

What are we looking for?

Companies with a strong track record of free cash flow that make significantly more money than they need to operate and that can create shareholder value by paying dividends, repurchasing stock and making acquisitions.

While most investors look at a stock’s price-to-earnings ratio (or its inverse, the earnings yield) as a rough barometer for how expensive a stock is trading, at Lorne Steinberg Wealth Management we tend to look beyond simple “accounting” profit and pay much closer attention to a company’s ability to generate cash. As such, we are focusing today on a company’s “free cash flow yield” as free cash flow tends to be far more indicative of the actual returns that shareholders receive from owning a business.

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Number Cruncher Contributors

Ted Dixon, CFA

E-mail this writer

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.