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.
Edmonton based AutoCanada Inc. is one of Canada's largest multi-location automobile dealership groups, operating 30 franchised dealerships in six provinces. In 2012, it sold approximately 30,000 vehicles and it has $1.2-billion in trailing 12-month sales. It has a $740-million market cap.
It has grown EPS at a 35-per-cent rate over the long term (using an average of the three- and five-year EPS growth rates), and has red hot relative strength of 98 over last 12 months.
The Peter Lynch-based model has strong interest in it thanks to a solid 0.63 P/E-to-growth ratio. AutoCanada trades for about 22 times earnings.
The stock has averaged a 25.3-per-cent return on equity over the past 3 years and has debt of just $9-million versus annual earnings of $34-million.
The Joel Greenblatt model likes that it has return on total capital of more than 46 per cent. An the stock also offers a 2.3-per-cent dividend.
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