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Number Cruncher

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


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Kelly Brown is an investment analyst at Longview Asset Management Ltd. in Toronto.

What are we looking for?

Companies in Canada available at a low multiple of price-to-trailing-earnings (P/E).

Independent studies have demonstrated that selecting companies based on a value metric such as a low P/E will result in a portfolio that is likely to outperform the market averages over the next 12 months.

A low P/E can sometimes signify slow earnings growth or a balance sheet with too much debt – so we also filter out companies with these characteristics.

The screen

Before ranking companies by lowest P/E, my colleague Alvin Lau and I used the S&P Capital IQ Screener to exclude companies with:

- compound earnings growth of less than 5 per cent per annum for the last five years;

- a balance sheet with greater than 30 per cent debt to total capital;

- a market capitalization lower than $100-million.

More about S&P Capital IQ

S&P Capital IQ offers a comprehensive set of tools for fundamental analysis of global securities as well as idea generation and work flow management. Its Web- and Excel-based platform provides access to both real-time and historical information on companies, markets, transactions and people around the world.

What did we find?

Successful investors use a variety of tools to identify companies that are high quality and trade at attractive prices. This particular screen produced 40 results, from which we selected the top quartile based on a low P/E ratio. All companies in this quartile have a P/E of less than 13. The average five-year earnings-per-share (EPS) growth rate is 14.9 per cent per annum. The average debt-to-total capital is 16.1 per cent.

Of course, none of these companies is guaranteed to outperform, but screens such as this can be a useful tool for improving your chances of beating the relevant index. Investors should perform additional research before making an investment.

Report Typo/Error

TSX-listed stocks with low price-earnings ratios

Company Ticker Recent
Price $
Market Cap
First Quantum Minerals Ltd. FM-T 17.03 8,112
Major Drilling Group Int'l Inc. MDI-T 7.53 596
Imperial Oil Ltd. IMO-T 39.52 33,497
Total Energy Services Inc. TOT-T 13.75 423
Bird Construction Inc. BDT-T 13 553
Canadian Oil Sands Ltd. COS-T 19.49 9,444
Magna International Inc. MG-T 59.03 13,823
Pacific Rubiales Energy Corp. PRE-T 20.2 6,513
Empire Company Ltd. EMP.A-T 66.21 4,499
Dorel Industries Inc. DII.B-T 42.8 1,362

Source: Longview Asset Management, S&P Capital IQ


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