Mr. Bowman is a portfolio manager at Hamilton-based Wickham Investment Counsel Inc., an adviser to high-net-worth clients.
What are we looking for?
Growing North American companies.
The screen
My colleague Rob Belanger and I started with North American companies larger than $500-million in market capitalization. We looked for companies that had increased their work force by more than 10 per cent and also boosted R&D spending by more than 10 per cent – both over the past 12 months. We further culled our list by only including firms that increased revenue by more than 10 per cent in the same period.
Operating profit margin (OPM) indicates how much profit a company makes after paying for the costs of production, and is indicated as a percentage of sales. To be included, companies had to increase their OPM by more than 10 per cent.
Return on equity (ROE) measures a firm's profitability by revealing how much profit it can generate with the cash shareholders have invested. Those showing a high ROE are more profitable and all our companies had to increase the ROE by greater than 10 per cent.
We also gave our companies an overall growth score based on the above criteria, excluding the market capitalization.
What did we find?
Gilead Sciences Inc. leads all companies with a growth score of 64.5. The biopharmaceutical company develops and commercializes innovative medicines in areas of "unmet medical need."
SolarWinds Inc. offers products and tools that solve a broad range of IT challenges through networks, servers and applications. The company has increased staff by 51.7 per cent in the past 12 months.
WisdomTree Investments is the eighth-largest exchange-traded product provider in the world and pioneered the concept of fundamentally weighted ETFs. The company boosted R&D spending by more than 80 per cent in the past year.
Nvidia Corp. popularized the graphics processing unit (GPU), the engine of modern visual computing. While Nvidia scored at the bottom of our list, hundreds of publicly traded companies domiciled in North America scored lower and no Canadian firms made our list.
Contact an investment professional or conduct further research before investing in any of the companies listed here.