Cash flow analysis is a valuable tool to assess the long term financial health (liquidity and solvency) of a company. Price/cash flow (P/CF) ratio is a measure of the market’s expectations of a firm’s future financial health. The ratio is considered more reliable than the price/earnings (P/E) ratio to evaluate a company, as cash flow is not easily manipulated unlike earnings which could be easily manipulated through depreciation and other non-cash factors.
Ubika Research has shortlisted eight Canadian industrial stocks with low forward price to cash flow ratio of below 13, which is considered an attractive investment from a valuation standpoint. Additionally, these stocks have registered strong trailing twelve months (TTM) EBITDA margins of between 11% and 35%. We note that some of these stocks have recorded gains during the past month with average traded volume in excess of 100,000.
|
Company Name |
Exchange |
Ticker |
Market Cap |
Last Price |
Average Volume |
Price Change (1-Month) |
EBITDA Margin |
1 Yr Forward P/CF |
|
ENTREC Corp |
TSXV |
ENT |
170.1 |
1.5 |
441,855 |
-5.2% |
24.3% |
3.1 |
|
Progressive Waste Solutions Ltd |
TSX |
BIN |
3,222.6 |
28.0 |
266,882 |
0.0% |
25.7% |
6.8 |
|
Newalta Corp |
TSX |
NAL |
1,123.5 |
20.3 |
413,680 |
5.6% |
17.9% |
7.5 |
|
TransForce Inc |
TSX |
TFI |
2,418.0 |
24.3 |
606,935 |
5.5% |
10.6% |
7.8 |
|
Ainsworth Lumber Co Ltd |
TSX |
ANS |
961.2 |
4.0 |
618,194 |
-4.8% |
35.1% |
8.4 |
|
Norbord Inc |
TSX |
NBD |
1,595.9 |
29.9 |
169,271 |
-2.1% |
21.4% |
10.5 |
|
Toromont Industries Ltd |
TSX |
TIH |
1,964.2 |
25.6 |
156,449 |
-2.9% |
14.6% |
11.7 |
|
CAE Inc |
TSX |
CAE |
3,934.6 |
15.0 |
1,051,935 |
-3.2% |
20.5% |
12.6 |
Source: Bloomberg
Company Description:
ENTREC Corp (TSXV: ENT)
ENTREC Corporation rigs and transports overweight and oversized cargo. The company serves the oil and natural gas, construction, petrochemical, mining and power generation industries. ENTREC operates in Alberta, Saskatchewan, northeastern British Columbia, and the Northwest Territories.
Progressive Waste Solutions Ltd (TSX: BIN)
Progressive Waste Solutions Ltd. provides non-hazardous solid waste collection and landfill disposal services for commercial, industrial and residential customers in British Columbia, Alberta, Manitoba, Ontario and Quebec. The company also serves customers in the southern and northeastern regions of the United States.
Newalta Corp (TSX: NAL)
Newalta Corp. recycles and recovers saleable products from industrial wastes through a network of facilities. The company serves national and international corporations in the automotive, forestry, mining, transportation services, and other industries.
TransForce Inc (TSX: TFI)
TransForce, Inc. offers transportation and logistics services. The company offers less-than-truckload and parcel delivery, fleet management and personnel services, and specialized truckload and truckload delivery services.
Ainsworth Lumber Co Ltd (TSX: ANS)
Ainsworth Lumber Co. Ltd. manufactures forest products, including specialty plywood, veneer, and wood chips. The company conducts operations in British Columbia and Alberta, Canada. Ainsworth’s products are distributed in markets throughout North America, Japan, the Pacific Rim, Europe, and South America.
Norbord Inc (TSX: NBD)
Norbord Inc. is an international wood-based panelboard producer. The company’s product line include wall and flooring panels, decking and roofing boards, as well as boards for shelving and furniture. Norbord operates in the United States, Canada, and Europe.
Toromont Industries Ltd (TSX: TIH)
Toromont Industries Ltd sells, rents, and services Caterpillar construction equipment and power systems in the provinces of Ontario, Manitoba, Newfoundland, Labrador and Nunavut, Canada. The company also manufactures and distribute refrigeration and process systems throughout North America.
CAE Inc (TSX: CAE)
CAE, Inc. provides simulation and modeling technologies and integrated training services for civil aviation and defense customers worldwide.
