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Number Cruncher

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




Number Cruncher

A dandy dozen small-cap stocks Add to ...

What are we looking for?

A week ago we searched for the best large-capitalization stock in each sector of the Canadian stock market, based on a combination of fundamental factors and improving outlooks for growth. This week we search for the best small-cap stocks.

More about today's screen

Craig McGee, senior consultant at Morningstar Canada, prepared today’s offering. He scoured the CPMS Canadian equity database to find the best smaller stock in each industrial sector, based on a combination of estimated returns on equity, annualized five-year growth rates for earnings, and recent increases to analysts’ estimates of future earnings.

To make the list, a stock had to have a market capitalization between $100-million and $1-billion and each of the yardsticks above had to be greater than the median industry value.

More about Morningstar

Morningstar Inc. provides independent investment research in North America, Europe, Australia, and Asia. Its investment research tool, Morningstar CPMS, provides quantitative North American equity research and portfolio analysis to institutional clients and financial advisers. CPMS data cover more than 95 per cent of the investable North American stock market.

What did we find?

A dandy dozen smaller stocks that might appeal to investors willing to put up with the risks inherent in buying small-cap stocks.

While this collection of stocks is well diversified across the Canadian market, readers should do their own research before buying any of the names listed here. Keep in mind that small-cap stocks typically don’t have the financial buffers or dominant market positions that larger companies do, so they can be more volatile than their heftier counterparts.

Investors should also note that the Canadian stock market is thick with resource and financial service companies, but relatively sparse in areas such as technology and consumer products. Investors who want exposure to these sectors should also look at the U.S. market for candidates.


Small Cap Industry Growth Leaders

Rank Company Symbol Sector Market Cap ($ mil) Estimated ROE 5yr EPS Growth Rate 90-Day EPS Estimate Revision Total Return YTD
1 Mediagrif Interactive MDF-T Technology Software & Services 248 19.1% 47.8% 15.3% 13.5%
2 Nevsun Resources Ltd. NSU-T Gold 681 21.6% 28.8% 21.3% -38.9%
3 Computer Modelling Grp CMG-T Oil & Gas Services 676 70.8% 24.9% 6.2% 20.3%
4 Intertape Polymer Grp ITP-T Capital Goods 502 22.3% 13.3% 24.4% 157.1%
5 Dundee Precious Metals DPM-T Diversified Metals & Minerals 951 11.0% 25.2% 181.3% -7.7%
6 Cott Corporation BCB-T Food Processing, Beverage & Tobacco 805 10.3% 79.1% 5.4% 32.2%
7 Medical Facilities DR-T Consumer Services 396 16.0% 31.5% 14.0% 25.4%
8 Glentel Inc. GLN-T Retailers & Distributors 244 26.5% 34.4% 3.7% -37.9%
9 Bellatrix Exploration BXE-T Oil & Gas Producers 371 6.1% 15.4% 20.0% -29.7%
10 Cdn Helicopters Grp, A CHL.A-T Transportation 388 23.6% 24.8% 1.2% 25.0%

Source: Morningstar Canada


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