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Fool’s mask (Photos.com)
Fool’s mask (Photos.com)

Stock Pick

What the Motley Fool would like about this e-commerce small cap Add to ...

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.

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Quebec-based Mediagrif Interactive Technologies Inc. provides e-commerce solutions in the fields of electronic components, computer equipment and telecom, medical equipment, automotive aftermarket, wine and spirits, diamonds and jewellery, classified ads, supply chain collaboration and government opportunities.

It’s a small cap ($317-million market cap) with low volume, so it may be more susceptible to volatility than other stocks, though it also has a 200 per cent return on capital – part of the reason why the Joel Greenblatt-based model has interest in the stock.

Mediagrif’s profit margins are high and increasing (last three years: 17.0 per cent, 17.7 per cent, 22.8 per cent), which the Motley Fool-based model likes

It also has 0.33 P/E-to-Growth ratio, which the Fool- and Peter Lynch-based models like. Lynch and Fool models also appreciate the firm’s lack of long-term debt.

It has grown EPS at 63.1 per cent rate over long term (using average of the 3 and 5 year growth rates) and has increased EPS by $0.56 over past decade while retaining $2.99 in earnings, making for an 18.7 per cent return on retained earnings, which the Warren Buffett-based model considers strong.

Click here for a complete breakdown of Validea’s investing guru report.

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