Blogs & Comment

Greenblatt's screen

Yesterday I came across a website that has a tool for screening Canadian stocks by the criteria espoused by Joel Greenblatt, author of The Little Book that Beats the Market. The websitecan be found at
Greenblatt looks for companies with high earnings yield (inverse of price-earnings ratio) and return on equity. Basically, its a formula for finding above-average companies (high ROE) at below-average prices (high earnings yield).
I ran the screener for companies with over $500-million market cap on the TSX and got a list of 100 companies, of which the first ten are shown below. Visitors can also run a screen for the Canadian Venture Exchange and U.S. exchanges.

  • FirstService Corp SV
  • Taseko Mines Ltd.
  • High River Gold
  • West Fraser Timber
  • Open Text Corp
  • Research in Motion
  • MacDonald Dettwiler
  • Leon’s Furniture Ltd
  • Paladin Labs Inc.
  • Richelieu Hardware

(Link to table with more info: green)
I wouldn’t buy any of these stocksjust because they passed Greenblatt’s filter. I’d want to research them first. Even at that, I wouldn’t want to spend time and energy researching any unless there was one of those rare events where market sentiment had become quite averse, for example, when the privatization of BCE Inc. fell through. Other than that, I’m content to pick up beta though passively indexing to the market and rebalancing along lines of the One-Minute Portfolio.