In his latest “Number Cruncher” column for Canada’s Globe and Mail, John Heinzl takes a look at some Warren Buffett-type stocks, with help from Validea CEO John Reese’s Buffett-based Guru Strategy.
“Unfortunately, Mr. Buffett wasn’t available for our little stock-picking exercise. But the folks at Validea Canada have developed a screen that emulates the Oracle of Omaha’s methods — without all the corny jokes and grandfatherly advice,” Heinzl writes.
Heinzl lists the ten Canada-traded stocks that get the highest marks from Reese’s Buffett-based approach, which looks for qualities like persistent earnings growth over the past decade; low debt; and high returns on equity and capital. Among the top scorers are convenience store and gas station operator Alimentation Couche-Tard, Canadian Western Bank, and Canadian National Railway.
Heinzl also takes a look at some of the broader, non-quantitative parts of Buffett’s strategy. “Mr. Buffett doesn’t try to capitalize on day-to-day price fluctuations, but instead focuses on the company’s business,” he notes. “He looks for companies with strong, long-term track records, and tries to buy them at a ‘fair’ price.”