18 May 2021

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Anthony Menard

Number Cruncher Extra – Canfor, Labrador Iron Ore Royalty & Calibre Mining

18 May 2021

In our last Number Cruncher, we’ve found Canfor (CFP), Labrador Iron Ore Royalty (LIF) & Calibre Mining (CXB) as potential candidates with robust momentum and excellent fundamentals to play the commodities boom. In Number Cruncher extras, we use our Stockpointer platform to reveal more insights about our picks.

 

Let’s start with CFP

The company has a high exposure to value, growth quality factors as well as momentum and volatility to a lesser extent. Its price/earnings ratio of 3.77 certainly explain a part of its high value factor exposure. The company has a solid 1-year sales growth of 33% as well as a decent annual sales growth averaging 10.6% in the last 5-year. The comapny grew its EPS by 24.1% per year in the last 5-year period.

 

Canfor is higher than the X axis which means the company is creating value for its shareholders. The comapny is also at the right of the Y axis meaning that the company is selling at a discount. The company is exactly where we want it to be as a potential buyer. The stock also looks better than its peers, both in terms of profitability (the higher than its peers) and price (rightmost than its peers).

 

The strong income stream is well identified by our yield factor with an incredible score of 95.  It has a balanced factor exposure to quality, value and growth ranging from 75 to 80. The company has a particularly strong five-year EPS growth of 26.7%, showing that it is able to navigate different market environments.

 

 

The company has some volatility in its results, but considering the volatility of iron ore it is quite reasonable.  We come to the conclusion that royalties are potentially less volatile than actual extraction. The NOPAT grows despite large dividends and the EVA constiously grew in the past years. These 2 metrics show a company that creates value for their shareholders in the long term.

 

Calibre Mining has a robust growth factor exposure with a score of 91 which is explained by the extreme annual sales growth and EPS growth in the last years. We need to put it in perspective. Calibre Mining seems to have started to extract gold ore recently and therefore the year-over-year values probably don’t show an adequate picture even if it doesn’t dimish the fact that the recent results are solid.

 

CBX was on a downtrend for few years and our model indicated the company was overvalued due to the intrisinc value being below the share price. In mid 2020, the intrinsic value surged, but the share price didn’t follow as much. At the first quarter of 2021, the intrinsic value stabilized while the share price slipped. We see here a potential entry point.

 

If you have any questions about the article, feel free to contact Anthony :
Amenard@Inovestor.com

If you would like to sign up for a free trial and learn how Inovestor can benefit you, contact Olivier:
Olamothe@Inovestor.com

 

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