Whether fair or not, in the United States Canadians have a reputation for being comparatively clean, polite, law-abiding, and respectful of others. However, one of Canada’s great cultural passions, the sport of hockey, breaks hard from most of these perceived traits. The great Canadian pastime of ice hockey is aggressive, fast, and chaotic in ways that no other sport can claim, placing it seemingly well outside the perception of Canadians as polite, agreeable, and altogether low key.
In the same way that hockey seems to flip classic Canadian stereotypes on their head, so does the landscape of the Canadian stock market. The defining characteristics of Canadian equities seem to befit the broader perception of America. A broad swath of small- and micro-cap resource companies are seeking their fortunes throughout the remote expanses of the Canadian west, and a great many more investors are rolling the dice along with them. Bid-ask spreads are wider and the opportunities for huge gains are all over.
As you might expect, it’s yet another example of overly simplified perceptions leaving one with a lack of any real understanding. Perhaps most importantly, when it comes to investing, this lack of knowledge could cost you serious money. That’s why equities.com is proud to be producing our Canadian Small-Cap Stars.
The Small-Cap Stars system is ideally suited for a market like Canada’s. In the Canadian market, great volatility and variance mean the best investing solution is to identify the companies with the strongest fundamentals, diversify your holdings amongst them, and count on your hits to make up for the inevitable misses.
The equities.com Small-Cap Stars system identifies a profile of a small-cap company on the verge of big gains by examining those companies that recently made big jumps on the basis of dozens of different key metrics. Then, after we have identified what precise blend of those fundamentals appears most common amongst the winners, we apply that profile to current companies to identify those companies that appear to be in the best position to take advantage of their current situation.
The systems we offer appear to be well-suited for the Canadian markets. When back-testing the system over the last five years, the universe of stocks we drew from returned 91.449%, while the stocks selected by our Small-Cap Stars system returned a whopping 165.215% with our portfolio outperforming the universe four years out of five.
Granted, this list is considerably smaller than its American counterpart in many ways, and consists of some easy-to-overlook plays. However, the list also includes plenty of potential for substantial returns that can easily surprise you if you haven’t been paying attention – not unlike Canada herself.
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