Berkshire Hathaway CEO and Chairman Warren Buffett speaks during an interview with Liz Claman of the Fox Business Network, in Omaha, Neb., Monday, May 6, 2013. The Berkshire Hathaway shareholders meeting took place over the weekend.Nati Harnik/The Associated Press
Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Computer Modelling Group Ltd., a 35-year-old Calgary-based firm, develops reservoir simulation technologies that are used by more than 500 oil, gas, and consulting companies across the world. It has a $900-million market cap.
The company has grown earnings per share at a 21-per-cent rate over long term (using average of the 3, 4, and 5 year EPS growth rates) and sales at a 17-per-cent pace (using avg. of 3, 4, and 5 year sales growth rates).
Its profit margins are high and increasing (last three years: 31.9 per cent, 33.1 per cent, 38.3 per cent), which the Motley Fool-based model likes. The Fool model and several others like firm's lack of long-term debt.
Computer Modelling Group has increased earnings per share by $0.55 over the past decade while retaining $0.54 in earnings, making for a 101.6-per-cent return on retained earnings, which the Warren Buffett-based model considers exceptional.
It has averaged a 35-per-cent return on equity over past decade, part of why the Buffett-based model has some interest in it. It also offers a 3-per-cent dividend yield, unusual for a firm in its industry, and has a strong 86 relative strength.
Click here for a complete breakdown of Validea's investing guru report.