What are we looking for?
A week ago we searched for the best large-capitalization stock in each sector of the Canadian stock market, based on a combination of fundamental factors and improving outlooks for growth. This week we search for the best small-cap stocks.
More about today's screen
Craig McGee, senior consultant at Morningstar Canada, prepared today’s offering. He scoured the CPMS Canadian equity database to find the best smaller stock in each industrial sector, based on a combination of estimated returns on equity, annualized five-year growth rates for earnings, and recent increases to analysts’ estimates of future earnings.
To make the list, a stock had to have a market capitalization between $100-million and $1-billion and each of the yardsticks above had to be greater than the median industry value.
More about Morningstar
Morningstar Inc. provides independent investment research in North America, Europe, Australia, and Asia. Its investment research tool, Morningstar CPMS, provides quantitative North American equity research and portfolio analysis to institutional clients and financial advisers. CPMS data cover more than 95 per cent of the investable North American stock market.
What did we find?
A dandy dozen smaller stocks that might appeal to investors willing to put up with the risks inherent in buying small-cap stocks.
While this collection of stocks is well diversified across the Canadian market, readers should do their own research before buying any of the names listed here. Keep in mind that small-cap stocks typically don’t have the financial buffers or dominant market positions that larger companies do, so they can be more volatile than their heftier counterparts.
Investors should also note that the Canadian stock market is thick with resource and financial service companies, but relatively sparse in areas such as technology and consumer products. Investors who want exposure to these sectors should also look at the U.S. market for candidates.
Companies & investments Mentioned In This Article (15)
MORN-Q 70.62 -0.09
-0.127% 62,630 Mediagrif Interactive Techn.
MDF-T 18.62 -0.57
-2.97% 49,727 Nevsun Resources
NSU-T 3.59 0.19
5.588% 1.094M Computer Modelling Group
CMG-T 21.55 -0.15
-0.691% 14,422 Intertape Polymer Group
ITP-T 12.43 0.02
0.161% 375,682 Dundee Precious Metals
DPM-T 4.44 0.23
5.463% 504,524 Cott Corp.
BCB-T 9.02 -0.13
-1.421% 106,402 Medical Facilities Corp.
DR-T 14.84 -0.13
-0.868% 65,201 Glentel Inc.
GLN-T 17.35 -0.13
-0.744% 9,892 Bellatrix Exploration
BXE-T 6.15 0.11
1.821% 442,282 Bird Construction Inc.
BDT-T 12.0 0.10
0.84% 139,961 Equitable Group
ETC-T 37.37 -0.18
-0.479% 10,780 Nordion Inc.
NDN-T 7.34 -0.14
-1.872% 7,443 Acadian Timber Corp.
ADN-T 13.61 0.15