Underperforming Canadian Stocks with Solid Potential

As major benchmarks continue their “seemingly unstoppable march upward,” writes Validea CEO John Reese in a recent article for The Globe and Mail, “it’s hard for investors to avoid being skeptical”—especially those that got hit hard by the 2000 dot-com bubble and/or the 2008 financial crisis.

While he argues that “pessimism is an investing survival instinct,” Reese juxtaposes Warren Buffett’s investing philosophy that “over the long term, a careful investor will see gains.” He explains, “A hot stock attracts a lot of attention, even though taking a moment to think about it might lead to the conclusion that it has already had its best run. A beaten-down stock tends to be ignored, even though an astute investor might recognize a buying opportunity.”

Using the stock screening models he created for Validea on Validea Canada, Reese identifies the following high-scoring names “that have yet to put in solid returns but hold potential”:

  • Shaw Communications Inc., is a Calgary-based phone, TV and internet service provider with consistent earnings and a “healthy” dividend yield. Get Guru Analysis
  • Equitable Group Inc. is a lender in the Canadian housing market with strong return expectations. Get Guru Analysis.
  • MTY Food Group Inc. is a Montreal-based restaurant operator and franchiser. Get Guru Analysis.