BMO Capital Markets initiated the TMX Group(X:TSX) with a Market Perform

STA Research
by: STA Research

BMO Capital Markets initiated the TMX Group with a Market perform rating on the Canadian stock exchange.nd a consensus Hold rating on the stock.

STA Research’s analysis of the stock is Very Bullish with a score of 9.5 out of 10, where 0 is very bearish and 10 very bullish.

 

What to like

:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Superior risk adjusted returns
This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.
Low volatility
The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although
stability is good, also keep in mind it can limit returns.
Superior total returns
The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top
quartile.
High dividend returns
The stock has outperformed its sector peers on average annual dividend returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top
quartile. This can be a good buy, especially if it is outperforming on total return basis , for investors seeking high income yields.
Underpriced compared to earnings
The stock is trading low compared to its peers on a price to earning basis and is in the top quartile. It may be underpriced but do check its financial performance to
make sure there is no specific reason.
Underpriced compared to book value
The stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to
make sure there is no specific reason.
Underpriced on cashflow basis
The stock is trading low compared to its peers on a price to cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to
make sure there is no specific reason.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
Superior capital utilization
The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.
Superior return on assets
The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.
Low debt
The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector.
Sometimes this is low because the company is not growing and has no growth potential.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
Underpriced on free cash flow basis
The stock is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial
performance to make sure there is no specific reason.
Superior Earnings Growth
This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.
Superior Revenue Growth
This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.
Superior Dividend Growth
This stock has shown top quartile dividend growth in the previous 5 years compared to its sector
High Gross Profit to Asset Ratio
This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

What to not like:

Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

 

Disclaimer

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