Globe says Shopify, others are leading the pack

2020-08-20 07:11 ET - In the News

See In the News (C-SHOP) Shopify Inc

The Globe and Mail attempts to identify momentum and growth stocks within the S&P/TSX Composite Index in its Thursday, Aug. 20, edition. The Globe's guest columnist Ian Tam writes in the Number Cruncher column that the S&P/TSX Composite continues to be weighed down by depressed oil prices with only two of 25 energy stocks within the index showing positive returns on a year-to-date basis (with all others posting double-digit losses on the same basis). Despite this, the recovery period since the bottom of the market in March has provided opportunity for momentum-oriented investors to pick up companies in other sectors that have recovered quickly. To find these types of companies Mr. Tam considered five-year growth rates for cash flow and earnings per share. He looked for growing quarterly earnings momentum. Mr. Tam also looked for companies with positive three-month estimate revisions. To qualify, companies needed to have a sector-relative debt-to-equity ratio less than one, implying that the debt-to-equity of the company is lower than that of the sector to which it belongs. Mr. Tam's stock that show good momentum are Shopify, Pan American Silver, Centerra Gold, B2Gold and Kinaxis.

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