What are we looking for?
Canadian stocks that have moved higher over the past month and show signs of continuing strength.
Over the past four weeks, Canadian markets have been rallying with the S&P/TSX composite index up 6.4 per cent over its lows of September. The Canadian markets have followed the U.S. lead with the S&P 500 up 8.7 per cent in the same period. Wednesday's U.S. Fed meeting put the possibility of a December rate hike firmly on the agenda – a move that encouraged investors to believe that the U.S. economy was on sure footing.
The screen
We used Recognia Strategy Builder in our search. We began by setting a minimum market capitalization threshold of $1-billion to focus on larger, more established companies in the market. Next we looked for companies that have moved higher in the past four weeks by at least as much as the broader market, that is, at least 6 per cent.
We also sought out stocks that have moved higher on significant volume. We screened for stocks that have had an average daily volume over the past 90 days of at least 500,000 shares. In addition, to look for stocks with growing investor interest, we employed a trading criterion: 10 day versus 90 day average volume. We wanted to find companies whose 10-day average volume is 110 per cent or more of the average volume over the past 90 days.
More about Recognia
Recognia is a global leader in automated quantitative analysis and engagement solutions for retail online brokers and institutions. Recognia's product suite provides actionable trading ideas based on technical and fundamental research covering stocks, ETFs, indexes, forex, options and commodities.
What did we find?
Whitecap Resources, a Canadian energy company with production primarily in Alberta and Saskatchewan, tops our list. It has a high dividend yield at 6.4 per cent and has seen a 10-day versus 90-day volume ratio of 1.18, indicating above average interest in the market. Whitecap's stock price is up 11.5 per cent over the past month.
The largest company on our list is pipeline company Enbridge with a market cap of just slightly more than $47-billion. The company's stock is up almost 15 per cent in the past month and has seen a 10-day versus 90-day volume ratio of 1.22.
Another interesting stock on our list is Rogers Communications. Rogers stock is up 17.3 per cent in the past month, due mainly to positive third-quarter earnings released on Oct. 22 that beat analysts' expectations on both revenue and earnings. Several analysts have since raised their price targets for the stock.
The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Recognia Inc. in respect of the investment in financial instruments.
Investors should conduct further research before investing.
Peter Ashton is vice-president of retail and self-directed investing at Recognia Inc.