Category Archives: Analyst Estimate

Analyst Estimates: U.S. Dividend Watch List

Below are the price projections based on analyst earnings estimates for our recent U.S. Dividend Watch List dated May 12, 2017. These estimates project the price change for the respective stocks over the next 12 months and the risk profiles associated with the estimates.

Canadian Dividend Watch List: May 2017

Performance Review

Below is the performance of our Canadian Dividend Watch List dated May 25, 2016:

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It appears that the analyst call on Cameco (CCO.TO) was quite accurate.  All other stocks on the list fell short of analyst expectations.  When compared to the Toronto Stock Exchange gain of +11.84%, the watch list from last year severely underperformed with an equal weighted decline of –5.82%.

One stock that we had particular interest in was Gluskin Sheff (GS.TO).  At the time, we said the following of the stock:

“…we believe that GS.TO is in a general range of undervaluation and should be considered at the current price.  Additional attention should be paid to the worst case target of the stock falling to the $7.25 price.  Our fair value target price from the current level is $20.87 or approximately +27% above the current price.”

On two occasions in the last year Gluskin Sheff approached, but never achieved, our fair value target price.  Once on September 6, 2016 at an intraday high of $19.45 and again at $19.93 on February 14, 2017.

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Merely approaching our fair value target is sufficient to warrant the sale of some/all of the stock in a qualified retirement account.  However, the stock would have failed to trigger a sale of the stock in a non-qualified account. With GS.TO sitting slightly below last year’s price we are publishing an updated Altimeter for a perspective on where the stock might be on a dividend/price basis.

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Canadian Dividend Watch List: April 2017

Performance Review

Below is the performance of our Canadian Watch List from April 2016:

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On the whole, the watch list underperformed with a –0.10% decline, this is contrasted with the Toronto Stock Exchange +17.70% change in the same period of time.

While the analysts got a majority of the calls wrong, estimates for Shaw Communications (SJR-B.TO) and Canadian Real Estate Investment Trust (REI-UN.TO) exceeded estimates on the upside.  Our call on Imperial Oil (IMO.TO)was short of the mark in the final analysis.  However, looking at the intra-year performance below, we can see that Imperial Oil rivaled the performance of the Toronto Stock Exchange (^GSPTSE).

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Canadian Dividend Watch List

Analyst Estimates

Performance Review

The analyst estimates for the U.S. Dividend Watch List published on March 4, 2016 show a relatively consistent pattern.  The level of out-performance was primarily centered on the stocks that were considered to be high risk while stocks most favored by analysts barely exceeded their expected 1-year returns, on a relative basis.  The categories that we’ve created are displayed below:

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While the actual return for the “high expectation, low return” category exceeded the analyst estimates by +15.45%, the margin was far less than the +36.93% and +47.11% for the “average risk” and “high risk” groups, respectively.

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Stocks that stood out in the past year are those that actually had greater percentage change from the March 4, 2016 level than the March 3, 2017 level.  These are stocks that are down from their highs.  It should be noted that none of these standout stocks are found in the “high expectation” category and three of the four stocks are found in the “average risk” group.

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Analyst Estimates: U.S. Dividend Watch List

Performance Review

This is a review of the analyst estimates based on the U.S. Dividend Watch List dated February 12, 2016.  Companies on the far left were expected by analysts to underperform while companies on the far right were expected to outperform.

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This past year was a vindication to analysts and their generally rosy outlook for the stocks that they cover.  Average gain for the entire list was 29.15%.  In the categories that we have indicated (high return, average return and low return) the group that did the best was the “average prospects, average returns”.

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Overall, the various categorizations of the watch list performed in line with our expectations and exceed the most major indexes except the S&P MidCap 400 and the Russell 2000.  When an investor can managed to achieve small cap performance with tried & true mid to large-cap stocks, then we know that we’re on the right track.

In our continuing effort to refine our investment process, we added a high and low confidence ranking of the analyst estimates of stocks on our watch list.  Our thinking was that the low confidence stocks would outperform the high confidence stocks, on the theory that the analysts are usually wrong, most of the time.  The actual performance, in the last year, provided resounding evidence that there may be credence to the level of confidence in the range in earnings estimates of the coming year.

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Analyst Estimates

Below are the price projections based on analyst earnings estimates for on our recent U.S. Dividend Watch List dated February 3, 2017. These estimates project the price change for the respective stocks over the next 12 months.  Additionally, we’ve included the high and low confidence stocks.