Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Ontario-based Linamar Corp. operates 40 manufacturing facilities around the world, making precision powertrain systems solutions for the light vehicle, commercial truck, off-highway, energy and industrial OEM markets. It also makes aerial work platforms for the construction and access markets. It has a $2.2-billion market cap.
It has grown EPS at a 14-per-cent rate over the long term (based on average of the four- and five-year growth rates), and an even better 44.6 per cent in the most recent quarter.
The stock has $5.20 in free cash flow per share, making for an 18.2-per-cent free cash flow yield. It has good momentum, with an 89 relative strength over past 12 months. The stock has a 15-per-cent return on equity.
The Peter Lynch-based model has strong interest in it thanks to a 12.5 P/E and 1-per-cent dividend, making for a 0.82 yield-adjusted P/E-to-growth ratio.
The Warren Buffett-based model likes that the company has averaged a 17.5-per-cent return on retained earnings over the past decade.
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