In a recent piece for Canada’s Globe and Mail, John Heinzl used Validea’s Warren Buffett inspired strategy to look for market bargains in Canada.

“Mr. Buffett aims to buy solid businesses at ‘fair’ prices and often holds stocks for decades, Coca-Cola Co. and American Express Co. being two examples,” writes Heinzl. “He summed up his investing philosophy in his 1996 letter to Berkshire Hathaway shareholders: ‘Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher five, 10 and 20 years from now. Over time, you will find only a few companies that meet these standards — so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines: If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.'”

Validea’s Buffett-based screen looks at a number of different variables, including annual earnings persistence, debt versus earnings, and the 10-year return on equity. Since its August 2010 inception, a 10 stock portfolio picked using the strategy has returned 89.1% vs. 22.8% for the S&P/TSX Composite. Among the Buffett-strategy-approved Canadian stocks Heinzl highlights: Stella-Jones and Badger Daylighting.