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.
The Wajax Corporation provides mobile equipment, power systems and industrial components to companies in the natural resources, construction, transportation, manufacturing, industrial processing and utilities industries. The Mississauga, Ont.-based company has a network of 129 branches across Canada and a $525-million market cap.
Wajax has been hit very hard over past year on some industry concerns, including worries about the impact of its move to stop distributing LeTourneau products in Canada. But Validea's Joel Greenblatt-based model calculates that it's undervalued, thanks to Wajax's 13.2 per cent earnings yield and 29.0 per cent return on capital.
Over the past decade its average return on capital was more than 22 per cent, which the Warren Buffett-based model likes.
The Buffett-based model also likes that it has retained $4.01 in earnings over the past decade while EPS have risen by $3.34: which made for an exceptional 83.2 per cent return on retained earnings.
Validea's Peter Lynch-based model has strong interest in its 0.57 yield-adjusted PE-to-growth ratio.
Lastly, it trades for 10.5 times projected 12-month EPS, and has a 7.6 per cent dividend yield.
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