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Transcontinental among best bargain stocks for 2015
The Investment Reporter •6/23/15 •Add Comment
Transcontinental Inc.’s shares remain in the bargain basement stocks section and are a buy for long-term price gains as well as high and rising dividends. Transcontinental is a ‘dividend aristocrat’ and its shares trade at an attractively-low price-to-earnings ratio. Its price-to-cash-flow ratio is also appealingly low.
Transcontinental Inc. (TSX─TCL.A) is Canada’s largest commercial printer. It’s a dividend aristocrat that has raised its dividend for many years. Transcontinental is a buy for long-term share price gains as well as its attractive and rising dividends.
It’s likely cheap because investors are wary of commercial printers in the Internet age. But Transcontinental is one printer that’s doing fairly well.
Seldom will value investors find this quality among the best bargain stocks to buy now.
Blue chip quality among bargain basement stocks
We have, in fact, recently raised Transcontinental’s quality rating by one notch, to ‘Very Conservative’. Our quality rating system uses a two-stage process to assess investment quality and risk, from a long-term viewpoint. We base our stage one, or initial, quality rating on asset size. After all, a big company can survive a longer, deeper slump than a small one and is more likely to get government help.
Adjusted asset size counts for a lot
At its October 31, 2014, year-end Transcontinental’s assets totaled $2.028 billion. So it qualifies for a stage-one rating of ‘Very Conservative’. But we exclude goodwill in calculating a company’s asset level. Transcontinental’s goodwill came to $420 million. Subtract this and its adjusted assets fall to $1.608 billion. As a result, the company remains qualified for an adjusted stage-one quality rating of ‘Very Conservative’.
In the second stage, we analyze a company’s economic sector, capital structure, long-term prospects and so on. We look at its profit history and pay particular attention to how it did in past economic setbacks. In this second stage we may raise or lower our initial rating by a notch (in rare cases, two or even more). When a company loses money for two years in a row, we take an especially close look and consider a deeper cut in the rating—all the way down to ‘Speculative’, if that seems justified.
Business sector also affects quality rating
We often stick with our initial rating of companies in the consumer sector. We may raise the first-stage rating of a company in finance or utilities. We’ll often lower the initial rating of a company in the resource or manufacturing sectors. They’re vulnerable to unpredictable shifts in demand.
Transcontinental is in the consumer sector. As a result, it sticks to its stage-one quality rating of ‘Very Conservative’. That’s up by one notch from its former rating.
Finding a diamond amongst the zircons
We’ve always acknowledged that ours is not a perfect system, and that well-hidden risks will occasionally escape our notice, if only temporarily. Or, to put it more bluntly, nobody gets it right every time. But our system provides you with a framework for sound investing—for building a portfolio that exposes you to only those risks you choose to accept.
In Transcontinental’s case, it helps you discover blue chip quality among the bargain basement stocks.
The Investment Reporter, MPL Communications Inc.
Transcontinental among best bargain stocks for 2015
The Investment Reporter •June 23, 2015 •Be the First to Comment
Transcontinental Inc.’s shares remain in the bargain basement stocks section and are a buy for long-term price gains as well as high and rising dividends. Transcontinental is a ‘dividend aristocrat’ Read More
AutoCanada: a bargain stock for value investors
The Investment Reporter •May 7, 2015 •Be the First to Comment
AutoCanada’s share price has plunged even though its earnings are expected to rise further this year and next. It remains a buy for value investors seeking a share price recovery Read More
Two best buys: a manufacturing stock and a consumer goods stock
Investor's Digest of Canada •April 14, 2015 •Be the First to Comment
Analysts follow as many as 20 stocks, most of which are rated “buys”. Of those buys, an analyst has one or two special favorites seen as most suitable for new Read More
High dividends and future price gains make Potash a bargain
The Investment Reporter •February 27, 2015 •Be the First to Comment
We continue to include Potash Corp. of Saskatchewan (TSX─POT; NYSE─POT), among our best buys for income.
In December we wrote, “It’s important to hold some resources stocks for proper diversification. The Read More
It pays to buy what others sell
The Investment Reporter •February 3, 2015 •Be the First to Comment
Oil prices have plummeted since June, 2014. Other commodity prices have declined. This has hurt the share prices of the producers. Oil companies are a lot cheaper than they were. The same is true of many mining companies that we review Read More
Enerplus still a buy, but not for the risk averse
Money Reporter •January 28, 2015 •Be the First to Comment
Among the stocks we recommended as best buys over the second half of 2014 was Enerplus Corporation (TSX─ERF; NYSE─ERF). Unfortunately, this stock was one of the worst performers on our Read More
Couche-Tard still a bargain if The Pantry deal closes
The Investment Reporter •January 27, 2015 •Be the First to Comment
Alimentation Couche-Tard (TSX—ATD.B), one of our Key stocks, is acquiring The Pantry in the U.S. That company operates 1,512 convenience stores in 13 states. This transaction is large. But given Read More
How to build your portfolio using dollar-cost averaging
The MoneyLetter •December 11, 2014 •Be the First to Comment
We’ve always held a high opinion of dollar-cost averaging. That’s because we’ve often seen this investment strategy richly reward those who follow it.
To dollar-cost average, of course, you invest equal Read More
Two oil patch heavyweights now a bargain
Investor's Digest of Canada •December 3, 2014 •Be the First to Comment
Plunging petroleum prices may have chilled the oil patch and the halls of government alike. But they’ve given investors a heaven-sent opportunity to scoop up some best-of-breed outfits in the Read More
Let Cor‘us’ entertain you; Let Cor‘us’ make you smile
The Investment Reporter •November 25, 2014 •Be the First to Comment
Corus Entertainment (TSX—CJR.B) earned more in fiscal 2014. But since it earned less than expected and lowered its expectations for 2015, its share price fell.
Corus is expected to earn more Read More
Houses and cars drive the consumer economy
Investor's Digest of Canada •November 12, 2014 •Be the First to Comment
What impresses Barry Schwartz about Gerald Soloway, CEO of Home Capital Group Inc. (HCG–TSX) is his commitment — and, obviously his love of what he does.
After all, Mr. Soloway may Read More
Investor thinking versus trader thinking │ When to buy and sell?
The MoneyLetter •October 30, 2014 •Be the First to Comment
To avoid risk, think like a trader, says Ken Norquay, a Hamilton, Ontario-based Chartered Market Technician (CMT) and author of Beyond the Bull, a book about behavioral finance and the Read More
Atco offers an attractive buying opportunity
The Investment Reporter •September 23, 2014 •Be the First to Comment
Atco Ltd. (TSX—ACO.X) suffered temporary setbacks in the second quarter and the first half of 2014. But its earnings are expected to recover in the second half of the year Read More
Earn dividends while Potash Corp. recovers
The Investment Reporter •August 27, 2014 •Be the First to Comment
We don’t usually think of companies like Potash Corporation of Saskatchewan (TSX—POT) as bargain stocks. But about a year ago Russia’s Uralkali quit one of the world’s two big potash Read More
Cheap oil and gas dividend stock
Investor's Digest of Canada •June 25, 2014 •Be the First to Comment
Back in September 2013, when Canadian Edge was adding Aggressive Holding Lightstream Resources Ltd. (LTS-TSX, $7.21) to its Dividend Watch List, CE noted that the company would likely “enjoy a Read More
2 Best Canadian stocks from leading analysts
Investor's Digest of Canada •June 23, 2014 •Be the First to Comment
Analysts follow as many as 20 stocks, most of which are rated “buys.” Of those buys, an analyst has one or two special favorites seen as most suitable for new Read More
Value Priced Stocks: Clearwater Seafoods
The Investment Reporter •June 17, 2014 •Be the First to Comment
Nova Scotia-based Clearwater Seafoods is one of 10 food stocks that we regularly examine on The Back Page. Since we published our December 13, 2013 issue, its shares have inched Read More
This value fund is positioned for recovery
Canadian Mutual Fund Adviser •June 13, 2014 •Be the First to Comment
Dynamic American Value Fund has lagged its category in recent years. But that may change as the U.S. economic outlook picks up steam, giving a boost to the fund’s cyclically-oriented Read More
Buy bargain stock CI Financial on the cheap
The Investment Reporter •May 26, 2014 •Be the First to Comment
When Scotiabank unveiled plans to sell some of its shares of CI Financial, the latter’s share price fell. This gives you the opportunity to buy CI as a bargain stock, Read More
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