King Edward’s Investments
The markets today are in turmoil. Tariffs and wars are wreaking havoc on the lives of hundreds of millions of people in the west. In Canada, American tariffs have all but stunted our economy and all sectors but the precious metals sector is felling it. So it was important to filter out short term investments that could be held for less than 10 days and return from 5% to 10% gains over the period. The csv file included with this document may be used to determine the current best and next best investment if used correctly. For instance, the new Ranking system is for companies with a positive SLOPE20 to SLOPE ratio and a negative Z_SCORE (the SLOPE20 being the most recent 20 day price slope the SLOPE being a 60 day price slope and the Z_SCORE being the deviation from the price index for a company) producing a list of viable investments that trade-off between price and strength. Furthermore, included in the ranking is the 10%OPPS, which is a measure of the number of times in a 7 day span over the course of 60 days a company traded for more than 10% gains. It is the purpose of the Ranking system to find large short term value in the markets. Although no ranking system is perfect, with a little insight, solid decisions can be made.
The current economic environment in Canada is bleak. Donald Trump has imposed tariffs on Canada and has therefor increased the price of Canadian goods in America. This has spawned a trade war between the two countries and sparked negative sentiments by the people in both nations. Buying Canadian goods in Canada is openly promoted by the media and the same is true (to buy American goods) in America. This mentality will only have a further negative effect on Canada, which is non more evident that the effect it has had on corporations such as SHOP.TO which deals mainly in internet marketing and should not feel the effects of the tariffs too much, however, its price has plummeted in recent weeks like most other Canadian stocks.
Although the markets have taken a downturn in recent weeks there is still hope on the horizon for some interesting investments in companies like ELF.TO, LUG.TO and GWO.TO. E-L Financial Corporation Limited (ELF.TO) trades with a small volume but possess a very strong EPS and a low Price/Earnings ratio. For a short term investment of about $5000 ELF.TO is a good bet because it lends itself well to a 10% trade. Lundin Gold Inc. (LUG.TO) is another company to watch due to its 5 year return which is well over 300% it has strong earnings per share and a healthy PE ratio (Price to Earnings Ratio), it also lends itself well to a 10% trade. Lastly there is Great-West Lifeco Inc. (GWO.TO) showing more than 100% gains in the last 5 years strong earnings per share and a healthy price to earnings ratio. Each one of these companies, with the exception of ELF.TO which has a very small trade volume, will make a wonderful future investment offering high gains and security.
Rounding out the top five ranked companies today are four to be avoided. Although their price is low they are struggling financially and as a result their prices could fall further. These companies are TRLY.TO, BITF.TO, DND.TO and CURA.TO. The first two companies are trading at a fraction of their 5 year highs and have negative earnings furthermore they are both trading at a 52 week low which means further lows may come. DND.TO, however, suffers from the same woes as TRLY.TO and BITF.TO but it has a flat 5 year price profile making it the best investment of the three but still woefully bad. And Curaleaf Holdings, Inc.(CURA.TO) has a horrendous 5 year return losing approximately 90% of its value, furthermore it has negative earnings making it the poorest of choices for an investment.
From the list of ranked companies three companies in the top five lend themselves for a special mention however, their price low was not met for an investment of 10% and so they will be discussed solely on the merit of their corporate strength, they were; Curaleaf Holdings, Inc.(CURA.TO), Energy Fuels Inc.(EFR.TO), Denison Mines Corp. (DML.TO) and Pet Value Holdings Ltd. (PET.TO). Energy Fuels Inc.(EFR.TO) has negative earnings which is alarming but constant 5year value which is comforting, Although it did not meet the Z_SCORE price point it should make for a comfortable future investment. Denison Mines Corp. (DML.TO) is the next company on the list. It has small negative earnings which is not uncommon for a mining company but it has a strong 5 year return (roughly 400%) although it did not hit its price point last week it is a company to watch. And the other company is Pet Value Holdings Ltd. (PET.TO). Although PET.TO has a stale 5 year return it has strong earnings and a healthy PE ratio this company may have found its bottom and if given the proper Z_SCORE should make a good investment and might even yield 10%.
There are currently no viable investments to be made as the Z_Scores of each company with a positive 20 day trading slope are all too high, recall a viable trade value for the Z_Score is less than -1.65. However, due to their strength during the recent market downturn companies to watch are:
ELF.TO |
LUG.TO |
GWO.TO |
These three companies mark a correction from the previous week.