10 Sep 2019

Deprecated: get_the_author_ID is deprecated since version 2.8.0! Use get_the_author_meta('ID') instead. in /var/www/www.inovestor.com/wp-includes/functions.php on line 5211
Newswire

Ten mining stocks to watch in Canada’s materials sector

10 Sep 2019

When markets are unstable and volatility is on the rise, investors tend to investigate alternative defensive products in order to protect their wealth. The materials sector can be seen as defensive insofar as gold (its production being a key part of this sector) is negatively correlated to the market. Last month, because of the strong rally of gold and silver, materials was one of the best performing sectors in Canada. The sector rose 5.7 per cent in August compared with the S&P/TSX Composite Index, which gained 0.2 per cent. Year to date, the sector has advanced 22.9 per cent compared with 14.8 per cent for the S&P/TSX.

For the Globe and Mail this week, we took a deeper dive into this sector and analyzed some companies that have benefited from this trend.

We screened the Canadian materials sector by focusing on the following criteria:

  • Market capitalization greater than $1-billion;
  • A positive 12-month sales change – a positive figure shows us that there is growth and progress in the company’s operations;
  • A positive 12-month change in the economic value-added (EVA) metric – a positive figure shows us that the company’s profit is increasing at a faster and greater pace than the costs of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax minus capital expenses;
  • A future-growth-value-to-market-value ratio (FGV/MV). This ratio represents the proportion of the market value of the company that is made up of future growth expectations rather than the actual profit generated. The higher the percentage, the higher the baked-in premium for expected growth and the higher the risk;
  • Free-cash-flow-to-capital ratio. This metric gives us an idea of how efficiently the company converts its invested capital to free cash flow, which is the amount left after all capital expenditures have been accounted for. It is an important measure because it gives us the company’s financial capacity to pay dividends, reduce debt and pursue growth opportunities. We are always looking for a positive ratio;
  • A low beta – a stock with a beta less than one is considered less volatile than the market.

Log in to you account to get additional information or to modify the original screener

Portfolio Manager’s September comment For August...

[vc_row type="in_container" full_screen_row_position="middle" scene_position="center" text_color="dark" text_align="left" overlay_...

Read more

Number Cruncher Extra – Ten mining stocks to...

[vc_row type="in_container" full_screen_row_position="middle" scene_position="center" text_color="dark" text_align="left" overlay_...

Read more
Latest news

What’s in the news

Oct 05, 2021
Floor-and-ceiling strategy opens door to mispriced stocks
Read more
Sep 07, 2021
Eight U.S. defensive dividend stocks for a frothy market
Read more
Aug 09, 2021
Nine Canadian stocks to play the consumer savings boom
Read more
Jul 13, 2021
These 11 growing companies from the S&P 500 are becoming increasingly attractive
Read more

Generate Higher Income

Discover our factor-based alpha generators

Discover our factor-based alpha generators

    What product(s) are you interested in?

    StockGuideMarket InsightsFor AdvisorsAsset Management

    StockGuide

    Market Insights

    For Advisors

    Asset Management

    What product(s) are you interested in?

    StockGuide
    Market Insights
    For Advisors
    Asset Management