What are we looking for?

Canadian listed stocks that follow the principles of James O’Shaughnessy’s “trading value” strategy.

Today, we’re leveraging pioneering investor and author James O’Shaughnessy’s famous “Trending Value” strategy that uses an evidence-based approach to quantitative investing to uncover stocks that are the best value. and combine speed investments. This approach identifies companies trading at attractive valuations while exhibiting strong price trends, capturing opportunities where the market begins to recognize the stock’s potential. By combining value metrics with momentum indicators, this strategy aims to identify stocks poised for sustained growth. Our screen focuses on these criteria to help investors find undervalued gems with better performance momentum.

Screen

We started by setting a minimum market capitalization threshold of $1-billion to focus on more stable, established companies with less volatility than small-cap stocks.

Next, our criteria focused on companies with a TC Momentum Factor rating of at least 50 out of 100, ensuring strong price momentum. made The momentum factor refers to the tendency to win stocks that perform well in the near term and three-month and 12-month price. Takes momentum into account and is used in Trading Central’s overall quantitative ranking.

To target companies with attractive valuations, we included stocks with trailing 12-month P/E ratios below the P/E of the S&P/TSX 60 index, which is around 19.66.

Further, we limited our search to stocks that show a five-year historical EPS growth of at least 10 percent and a dividend yield of 2 percent or more to ensure a balance of growth and earnings. could

We’ve also included year-to-date, and one-year price performance for reference.

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, including stocks, exchange-traded funds, indices, forex, options and commodities. Strategy Builder, our stock screener is available through leading retail brokers in Canada and worldwide.

What we found

Suncor Energy Inc SU-T tops the list, bolstered by its position as the largest market-cap company with $69.25-billion in screened stock, reflecting its dominance and stability in the oil and gas sector. does Its P/E ratio of 8.86 indicates an attractive valuation relative to its earnings, while its momentum factor rating of 69 highlights strong price performance. With a one-year performance of 27 percent and a five-year EPS growth of 25.54 percent, Suncor demonstrates continued growth and resilience. Additionally, its 4.14 percent dividend yield provides a solid return for income-focused investors, making it an excellent choice on this list of value and momentum stocks.

There is another interesting stock in the list. ARC RESOURCES LIMITED ARX-Ta leading Canadian energy company focused on natural gas and oil development. The company combines an attractive P/E ratio of 13.13 with strong five-year EPS growth of 34.18%, indicating that it is not only a reasonable value relative to its earnings, but also strong long-term dividend growth. shows. Its performance is further supported by a one-year return of 33.6 percent, highlighting its momentum in the oil and gas sector.

National Bank of Canada NA-T The highest Speed ​​Factor rating on our list is 98, reflecting exceptional performance for the price. The stock has an attractive P/E ratio of 12.38. Its five-year EPS growth of 10.99% indicates consistent profitability, while its one-year performance of 30.8% highlights its potential to generate strong returns for investors. Additionally, with a dividend yield of 3.45 percent, it offers a steady income stream, making it an attractive choice for those looking for a momentum stock with reliable fundamentals.

The investment ideas presented here are for information only. They do not constitute advice or recommendation on behalf of Trading Central regarding investment in financial instruments. Investors should do more research before investing.

Gary Christie is head of research in North America. Trading Central In Ottawa