Top-rated Canadian equities using a quantitative approach
What are we looking for?
Top-rated Canadian equities using Trading Central’s Quantamental factor investing methodology.
With the S&P/TSX Composite Index trading within 2.5 per cent of its 52-week high set on April 9, our research team delved into Canadian equities using a Quantitative perspective, which combines quantitative and fundamental analysis. Quantamental investing seeks to identify investment opportunities with a deeper understanding of market dynamics and a focus on generating alpha, or excess returns, for investors.
The screen
We initiated our search by implementing a minimum market capitalization threshold of $1-billion, prioritizing larger companies with more stable revenue streams while avoiding smaller, potentially riskier investments.
Next, we narrowed our search to stocks currently trading within 10 per cent of their 52-week highs, emphasizing strong price momentum and potentially bullish market sentiment. This focus enables the identification of potential breakout candidates and the opportunity to capitalize on established uptrends.
Finally, we implemented a filter to identify Canadian stocks with a TC Quantamental Rating of 55 or higher with a focus on growth and momentum factors above 50 out of 100. The TC Quantamental Rating ranks stocks on a scale of 0 to 100, with 100 being the most bullish and 0 being the most bearish. TC Quantamental Rating uses a combination of valuation, growth, quality, price momentum and income as key metrics when ranking a company.
For informational purposes, we have also included YTD, dividend yield, one-year price performance, the recent stock price and the price-to-earnings ratio.
More about Trading Central
Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities. Strategy Builder, our stock screener, is available through leading retail brokers in Canada and worldwide.
What we found
A quantitative approach to Canadian equities
| RANK | COMPANY | TICKER | MKT.CAP. ($Bil) | RECENT PRICE ($) | TC QUANT.RATING | TC GTH.FCTR.RTNG | TC MTM.FCTR.RTNG | DIV.YLD (%) | 1Y PERF. (%) |
| 1 | Secure Energy Services Inc | SES-T | 3.03 | 11.34 | 64 | 60 | 93 | 3.48 | 91.2 |
| 2 | Manulife Financial Corp | MFC-T | 58.41 | 32.32 | 66 | 65 | 90 | 4.93 | 21.9 |
| 3 | Dundee Precious Metals Inc | DPM-T | 1.91 | 10.66 | 77 | 93 | 77 | 2.09 | 3.1 |
| 4 | goeasy Ltd | GSY-T | 2.97 | 178.67 | 65 | 71 | 72 | 2.62 | 99 |
| 5 | Brookfield Reinsurance Ltd | BNRE-T | 6.68 | 56.13 | 56 | 67 | 75 | 0.77 | 31.3 |
| 6 | Definity Financial Corp | DFY-T | 5.39 | 46.21 | 58 | 67 | 83 | 1.38 | 30.8 |
| 7 | Agnico Eagle Mines Ltd | AEM-T | 44.05 | 89.14 | 68 | 91 | 82 | 2.44 | 11.8 |
| 8 | Teck Resources Ltd | TECK-B-T | 34.55 | 66.81 | 63 | 69 | 75 | 0.75 | 12.5 |
| 9 | Great-West Lifeco Inc | GWO-T | 38.02 | 41.2 | 56 | 66 | 61 | 5.45 | 5.9 |
| 10 | Primo Water Corp | PRMW-T | 4.18 | 26.36 | 71 | 68 | 88 | 1.87 | 25.6 |
Source: Trading Central
Topping our list is Secure Energy Services , an environmental and energy infrastructure company, with a TC Quantamental Rating of 64 and the highest momentum factor rating, at 93, reflecting its impressive one-year price performance of 91.2 per cent. Although the stock is trading within 5 per cent of its recent 52-week high on April 11, its P/E ratio is the second-lowest on our list at just 5.93.
Dundee Precious Metals, a global gold mining company, has the highest TC Quantamental factor and growth factor rating on our list at 77 and 93 respectively. The growth factor takes into account the year-over-year change in price/earnings, EPS growth and revenue growth.
Agnico Eagle Mines , another prominent gold miner, boasts the highest market capitalization on our list, standing at $44.05-billion, with its stock price trading within 4 per cent of its 52-week high reached last week. Additionally, it holds the second-highest TC growth factor rating at 91 out of 100, indicating continued growth potential.
Trading Central Strategy Builder provides a backtesting capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described had a 13-per-cent annualized total return over five years, compared with 6 per cent for the S&P/TSX 60 Composite Index.
The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central with respect to investment in financial instruments. Investors should conduct further research before investing.
Gary Christie is head of North American research at Trading Central in Ottawa.