What are we looking for?
The best growth stocks at a reasonable price in each industry.
More about today’s screen
We’ll turn to CPMS for help today and look at its Canadian industry relative model.
This model ranks stocks by price-to-forward earnings, price-to-book value per share and reinvestment rates (earnings per share less dividends as a percentage of book value).
It also ranks stocks for earnings momentum, three-month change in median EPS estimates, earnings surprises and price change over the last three and six months.
Stocks are then ranked against their industry peers and given a grade in each ranking area (A is high, E is low).
CPMS uses its own industry groups, which are similar to how you might typically break down sectors, but their methodology also breaks out some sectors like materials into custom groups such as metals, gold and paper stocks.
More about CPMS
Each week we do a screen with CPMS, which is a Toronto-based equity research and portfolio analysis firm owned by Morningstar Canada. CPMS maintains a database of about 660 of the largest and more liquid Canadian stocks, plus another 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?
James Hynes, senior consultant with CPMS, reports that this is the top-performing model for his firm this year, as it is up 21 per cent for the quarter to date and 42 per cent for the year.
Disclosure: I own shares of Manulife Financial Corp. MFC-T.
