What are we looking for?
As 2009 comes to a close, we're taking a look back at the decade that was and trying to find some of the winners and losers that crossed the tape in that time.
Today, we're going to churn through some of the data on corporate profit.
At the beginning of the decade, this sort of screen wouldn't have made much sense at all to most investors. Everyone was enamoured with all sorts of names that didn't make a dime but promised a new world order the other side of a few fiscal quarters in the red.
The first couple years of the decade, however, showed, ever so painfully, just how irrational that thinking was. Value investing and an appreciation for the fundamentals both stormed their way back to the forefront. A few more painful lessons in understanding the finer points of the footnotes buried in the balance sheet would eventually follow as the decade drew to a close, but the basic point that making money is good for business certainly hasn't been lost on the investing public.
So, in that vein, we are going to take a look at compound annual earnings growth on the Toronto Stock Exchange over the last 10 years and see who managed to rise to the top.
More about today's screen
The universe of stocks we're looking at here includes all the companies listed in Toronto and not just those in the S&P/TSX composite index.
We're using Capital IQ to crunch the earnings numbers over the last 10 years and give us back a list of all the companies that were able to post a 10-year compound annual rate of better than 30 per cent.
The earnings figures we're using here are diluted earnings per share before extra items and the screen is based on the latest annual number we can get - this is as close as we can get to apples-to-apples numbers for the entire universe without requiring you to read a mountain of footnotes.
We've also used Capital IQ to pull compound annual growth rates on total revenue and dividends per share, as well as a trailing twelve-month EPS growth numbers and a forward earnings growth forecast.
Share price and market cap data are both from Globe Investor.
Bloomberg provided the 10-year share price gain and total return numbers.
What did we find?
The last decade belonged to Research In Motion and the oil sands.
RIM managed to race ahead at breakneck speed with nary a wobble or misstep despite all the carnage wrought amid the dotcom crash.
Ten years ago, most of the plans for the oil sands were exactly that: plans. The companies involved were all heavily betting on the future, but for many of them it is clearly a bet that panned out.
Husky Energy, Canadian Natural Resources, Canadian Oil Sands Trust, Total Energy Services, EnCana, Petrobank Energy and Resources, Zargon Energy Trust and even Finning International have all profited greatly from the development of Canada's bitumen reserves.
Which one of these names should you have bought? There were a lot of homeruns here, but Petrobank's nearly 3,000-per-cent gain over the last 10 years stands out.