WHAT WE'RE LOOKING FOR
It's Day Three of our weeklong look at the stocks held by major TSX-listed exchange-traded funds.
We're zeroing in specifically on the wealth-creating power of the stocks in these ETFs. Our tool is EVA, or economic value added, which is a stringent measure of a company's profitability.
Here, we compare EVA scores for the Claymore Canadian Fundamental Index ETF (CRQ) with its constituent stocks.
Montreal-based Stockpointer, a specialist in EVA analysis, has alphabetically listed the stocks that account for the vast majority of the assets in CRQ.
You'll also find data on each stock's intrinsic value, which is what a stock should be trading at according to the economic value it creates for shareholders.
Price over intrinsic value puts a stock's actual trading price in perspective. Higher numbers suggest an over-valued stock, while a score under 1.0 suggests bargain pricing.
Finally, Stockpointer has provided an economic performance index score for each stock. The EPI offers a way of comparing EVA for companies across different sectors. A company needs an index score of at least 1.0 to be considered a wealth creator.
WHAT WE FOUND
CRQ itself rates a 1.0 on the economic performance index, which suggests the solid wealth creators in the underlying FTSE RAFI Canada Index are pretty much in balance with the weaker names. Look for stocks with high EPI scores if you prefer holding individual stocks to owning the ETF.
Then, find the stocks trading below their intrinsic value as calculated by Stockpointer. Research In Motion stands out in this regard, as do Fairfax Financial Holdings, National Bank of Canada, Power Corp. of Canada and Rogers Communications.
|Claymore Canadian Fundamental Index ETF (CRQ)|
|Company||Symbol||Sector||Weight in Portfolio %||Price Jan. 6||Intrinsic Value||Price \ IV||Economic Perf. Index|
|Bank Of Montreal||BMO-T||Financial||5.1||54.59||57||0.96||1.2|
|Bank Of Nova Scotia||BNS-T||Financial||5.3||47.52||45||1.06||2.1|
|Barrick Gold Corp||ABX-T||Materials||1.4||43.18||-26||-1.66||-2.3|
|Bombardier Inc -cl B||BBD.B-T||Industrial||1.2||4.99||14||0.35||1.6|
|Brookfield Asset Management||BAM.A-T||Financial||1.3||23.14||20||1.13||0.8|
|Canadian Imperial Bank||CM-T||Financial||3.1||66.99||40||1.65||1|
|Canadian National Railway Co||CNR-T||Industrial||1.8||57.31||75||0.76||1.5|
|Canadian Natural Resources||CNQ-T||Energy||2.9||76.20||40||1.9||0.8|
|Canadian Pacific Railway Ltd||CP-T||Industrial||1.1||56.14||69||0.82||0.9|
|Celestica Inc||CLS-T||Inf. Tech.||1.3||10.10||-1||-12.05||-0.4|
|Fairfax Financial Holdings||FFH-T||Financial||0.8||403.80||3,728||0.11||3.9|
|Magna International -cl A||MG.A-T||Cons. Discr.||2.3||60.02||18||3.3||-0.8|
|Manulife Financial Corp||MFC-T||Financial||5.2||21.01||12||1.71||-0.4|
|National Bank Canada||NA-T||Financial||1.1||60.00||90||0.66||2.1|
|Potash Corp Sask Inc||POT-T||Materials||0.7||127.23||113||1.12||1.8|
|Power Corp Canada||POW-T||Financial||2.6||29.32||70||0.42||2.3|
|Power Financial Corp||PWF-T||Financial||1.3||31.29||47||0.67||1.8|
|Research In Motion Ltd||RIM-T||Inf. Tech.||0.7||67.70||109||0.62||3.2|
|Rogers Communications -cl B||RCI.B-T||Telecom||0.7||31.10||61||0.51||2.2|
|Royal Bank Of Canada||RY-T||Financial||8.1||55.34||60||0.93||1.8|
|Sun Life Financial Inc||SLF-T||Financial||2.9||32.49||21||1.55||-0.1|
|Suncor Energy Inc||SU-T||Energy||5.9||39.25||5||7.35||0.3|
|Talisman Energy Inc||TLM-T||Energy||1.8||20.23||11||1.87||0.4|
|Teck Resources Ltd||TCK.B-T||Materials||9.0||40.47||39||1.04||0.7|
|Thomson-reuters Corp||TRI-T||Cons. Discr.||2.5||34.51||87||0.4||1.6|
|Toronto Dominion Bank||TD-T||Financial||6.0||64.37||72||0.89||1.1|
|Weighted Average for the ETF:||100.0||55.04||83||1.24||1|
© 2007 The Globe and Mail. All rights reserved.
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