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What are we screening for?

Canadian-listed companies with strong price momentum.

The Screen

The notion of a Santa Claus rally – first introduced in the late 1960s – refers to a supposed climb in equity markets in the period just before Christmas and sometimes into the New Year. Countless investment writers insist that such a rally is about as real as old St. Nick himself, but in reality, it all depends on the data set you’re looking at. And there are a variety of factors that could be behind end-of-year gains, such as tax-loss selling – which juices market activity – and the general happiness that accompanies the holiday season.

Analyzing end-of-year market activity over the past two years (the period used was Dec. 15 – Jan. 2), the S&P TSX Index delivered a loss of 1.1 per cent last year, while producing a gain of 2.18 per cent the year prior. While two years is not a large enough sample size to produce any concrete analysis, it shows how much markets can move during this short period.

Canadian markets sure could use a visit from Santa this year: In 2023, Canada has underperformed several other markets, with the benchmark S&P/TSX Composite Index gaining only 5.29 per cent, compared with a 19 per-cent gain south of the border for the S&P 500 Index, and a 10 per-cent gain for the Europe STOXX 600 Index. (The Europe STOXX Index contains 600 components comprising large, mid-, and small-cap companies across 17 countries.)

But there could be some hope around the corner as we move into December. Today we screen for Canadian listed stocks demonstrating strong momentum heading into the Christmas season.

  • First, we screen for Canadian-listed companies with a market capitalization greater than $1-billion.
  • Next, we screen for companies that have demonstrated strong price momentum. The Starmine Price Momentum model includes a blend of short, mid-, long-term, and industry-specific components, and recognizes the tendency of long-term trends to revert to their long-term mean. Higher scores indicate stocks with the strongest price momentum. We screen for companies with a score of 95 or greater, representing companies in the top 5 per cent for price momentum.

More About London Stock Exchange Group

The London Stock Exchange Group (LSEG), is one of the world’s largest providers of financial market data and infrastructure, serving more than 40,000 institutions worldwide. LSEG provides information, insights, and technology that drive innovation and performance in global financial markets, enabling the financial community to trade smarter and faster, overcome regulatory challenges, and scale intelligently.

What We Found

Stocks with strong price momentum

CompanyTickerMarket Cap ($ Mil CAD)Price Momentum Model1Yr Total Return (%)Div. Yield (%)Recent Close ($)
Stella-Jones IncSJ-T4,507.7110065.21.278.87
Constellation Software IncCSU-T68,575.799855.40.23236.00
Celestica IncCLS-T4,341.1198147.8-36.37
SNC-Lavalin Group IncATRL-T7,355.729873.30.241.90
Sprott Physical Uranium TrustU-U-T6,750.009788.5-27.17
Coveo Solutions IncCVO-T1,027.199747.6-9.96
Dollarama IncDOL-T28,025.189625.20.399.65
MDA LtdMDA-T1,373.859588.4-11.49
Docebo IncDCBO-T1,922.899547.9-60.60

Source: LSEG

The screen, ranked by Starmine Price Momentum Model, produced nine companies across five sectors.

Stella-Jones Inc. SJ-T, which ranked highest in the Starmine Price Momentum model with a score of 100, is a Canadian-based producer of pressure-treated wood products. The company operates 42 wood-treatment facilities, 16 pole-peeling facilities, and employs over 2,800 people across Canada and the United States. Stella-Jones’ revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) margins have grown in each of the previous five years, with trailing 12-month (TTM) revenue of $3.29-million and EBITDA margins of 17.4 per cent as of Sept. 30, 2023. The company has completed more than 20 acquisitions over the past two decades, which has supported their growth mandate. With lumber prices beginning to stabilize and a strong pipeline of infrastructure projects ahead, Stella-Jones is well positioned to continue to deliver steady growth.

MDA Ltd. MDA-T, which scored 95 in the Starmine Price Momentum model, was the sole industrials company to make the screen, and is a provider of advanced technology and services to the global space industry. The company designs and manufactures space robotics, satellite systems and intelligence systems, and has been involved in the global space industry for more than 50 years. It has a strong portfolio of patents and cutting-edge technologies. MDA recently announced a new contract to start work on a non-geostationary orbit constellation, which will include a minimum of 36 software-defined satellites and is valued at approximately $180-million. This new contract is expected to help MDA add future customers as they continue to refine their design and manufacturing processes. With the global space market expected to triple from US$464-billion in 2022 to US$1.5-trillion in 2040, MDA could benefit from this significant rise in investment activity.

Investors are advised to do their own research before trading in any of the securities shown.

Stephen Donovan, MBA, is a senior customer learning manager at LSEG, covering cross-asset trading for the LSEG Academy.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 29/05/24 3:59pm EDT.

SymbolName% changeLast
SJ-T
Stella Jones Inc
-2.27%82.66
CSU-T
Constellation Software Inc
-0.51%3760.84
CLS-T
Celestica Inc Sv
+0.21%81.24
ATRL-T
Snc-Lavalin Group Inc
-0.47%52.94
U-U-T
Sprott Physical Uranium Trust USD
-3.76%21.25
CVO-T
Coveo Solutions Inc
-3.23%7.78
DOL-T
Dollarama Inc
-0.06%122.73
MDA-T
Mda Ltd
-2.33%11.72
DCBO-T
Docebo Inc
-0.48%49.72

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