What are we looking for?
Gold stocks that should do well in volatile markets.
More about today's screen
Gold continues to be a favourite safe haven in these volatile markets. While gold stocks generally haven't kept up with the commodity price, we'll do a screen today for gold stocks with the best prospects for steady growth.
We'll ask Morningstar CPMS to screen for gold stocks with market caps larger than $1-billion, positive earnings and positive earnings growth forecasts for fiscal 2011, 2012 and 2013.
In the table, we'll also display three-year beta, which measures a stock's volatility against the S&P/TSX composite index. Stocks with a beta less than one are less volatile than the market. Stocks with a beta in excess of one are more volatile than the market.
Also in the table is each company's earnings variability over their reported history going back as far as 1981. You want to look for gold stocks with the steadiest earnings versus their peers.
More about CPMS
CPMS is an equity research and portfolio analysis firm owned by Morningstar Canada. It maintains a database of about 680 of the largest and more liquid Canadian stocks, plus more than 2,100 U.S. stocks, and spends a lot of time adjusting for unusual accounting items in each company's quarterly results to make sure screens can perform correctly.
What did we find out?
The stocks with the best year-to-date performances are often the ones that rank well for earnings variability in this table.
"All stocks in the table have expectations of future earnings growth, but the stocks with the best combination of low beta and earnings variability are prime candidates to be considered for their safety characteristics," said Craig McGee, senior consultant with Morningstar CPMS.
Scott Adams