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.
According to the Joel Greenblatt-inspired model, available on Validea.ca, Calgary-based oil and gas explorer TransGlobe Energy Corp. has been punished too much. It likes TGL’s 30.8 per cent earnings yield and 33.8 per cent return on capital (its market cap is $570-million).
It has grown EPS at a 32.2 per cent pace over long term (using average of 4 and 5 year growth rates). It also has exceptional 38.8 per cent free cash flow yield.
It get strong interest from Peter Lynch-based model thanks to its 6.5 P/E (ttm) and 0.2 P/E-to-Growth ratio, which helps.
TransGlobe also has more than twice as much in net current assets ($262-million) as long-term debt ($116-million), which the Ben Graham strategy likes. Its averaged return on equity is over 20 per cent for last decade.
Editor's Note: An earlier online version of this article incorrectly called TransGlobe a refiner. Validea has corrected its description.