Investing in Large Cap Canadian Growth Stocks: Aly Alladina Uncovers Higher Returns

• On 1:57 pm EDT, Sunday October 25, 2009

67 WALL STREET, New York - October 25, 2009 - The Wall Street Transcript has just published its TWST Large Cap Growth Report offering a timely review of the sector to serious investors and industry executives. This 38 page feature contains expert industry commentary through in-depth interviews with top tier Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Recovering Economy -- Domestic and Global Recovery -- Increasing Dividend -- Relative Opportunity & Opportunity Cost -- Downside Protection -- Bullish on Growth -- Valuations -- Effects of Healthcare Reform -- Development of New Products -- Innovation -- Growing Earnings -- Acquisitions -- Technologies -- Quality Control -- Equity Research Capabilities -- Sustainability and Predictability of Earnings Growth -- Source of Earnings -- Canadian Banking -- Dividend Cuts -- Discretionary Stocks -- High Volatility -- Concentrated Portfolios -- Undervalued Stocks -- Demand for Steel -- Increasing Production -- Growth -- Coal Mining Operations -- Surge in Consumer Spending -- Increase in Viewership -- Unit Volume -- Foreign Income -- Tax Rate

Companies include: Abbott (ABT); Amazon (AMZN); Amgen(AMGN); Apple (AAPL); AutoZone (AZO); BHP Billiton (BHP); Bank of Montreal (BMO); Baxter (BAX); Broadcom (BRCM); CVS Caremark (CVS); Cameron International (CAM); Changyou (CYOU); China Telecom (CHA); China Unicom (CHU); Colgate-Palmolive (CL); ConocoPhillips (COP); Dell (DELL); Discovery Communications (DISCA); Emerson Electric (EMR); Express Scripts (ESRX); Genzyme (GENZ); Gilead Sciences (GILD); Goldman Sachs (GS); Google (GOOG); Guess? (GES); INVESCO (IVZ); Intel (INTC); JCPenney (JCP); Kohl's (KSS); Las Vegas Sands (LVS); Lowe's (LOW); Magna (MGA); McDonald's (MCD); Medtronic (MDT); Microsoft (MSFT); Monsanto (MON); Morgan Stanley (MS); Myriad Genetics (MYGN); National Oilwell Varco (NOV); Noble Corp (NBL); Nokia (NOK); Nuance Communications (NUAN); Palm (PALM); Peabody Energy (BTU); Petrobras (PBR); Priceline (PCLN); Procter &Gamble (PG); Qualcomm (QCOM); Ross Stores (ROST); Schlumberger (SLB); Shaw Communications (SJR); Sysco (SYY); Texas Instruments (TXN); The Gap (GPS); Thomson Reuters (TRI); Time Warner (TWX); United States Steel (X); Visa (V); Vmware (VMW); Wal-Mart (WMT).

In the following brief excerpt from just one of the indepth articles in the 38 page report, Canadian expert stock picker Aly Alladina discusess the outlook for the sector and for investors.

Aly Alladina, CFA is a Partner at PCJ Investment Counsel, Ltd. and became a member of the PCJ team in 2000. He is responsible for Canadian fundamental research and trading. Prior to joining PCJ he was a member of the Connor, Clark & Lunn Investment Management Ltd. fixed income team in Vancouver. He holds a BBA degree from Simon Fraser University and the CFA designation.

TWST: What about the selection process itself? What are the investment criteria that you look for in potential holdings?

Mr. Alladina: Let me walk you quickly through our investment decision-making process as it relates to idea generation, our equity research, our portfolio construction, and then our risk management. So what are some of the key criterias that help us pick stocks?As I mentioned earlier, we're trying to identify companies in the Canadian universe that exhibit the strongest earnings growth potential. In terms of the process to narrow the universe, we use two proprietary tools. One being our screening process that helps us quantitatively isolate those companies in the Canadian universe that exhibit the strongest earnings growth potential and are really focused on things like cash flow growth, earnings revisions, earnings momentum, ROE growth, as well as earnings surprise. From a qualitative perspective, we pride ourselves on being able to interview approximately 200 companies a year, both in our offices in Canada as well as traveling internationally or to look at Canadian businesses that have international exposures. By combining our quantitative and our qualitative bottom-up security selection process, we've been able to really create a disciplined and repeatable idea generation process that allows us to narrow the universe but more importantly, that allows us to concentrate our research efforts on a much smaller subset of companies. Our goal there is to identify high quality companies with superior opportunities for growth.

In terms of the equity research capabilities, when we meet with individual companies, we're trying to understand the predictability, the repeatability, and the sustainability of earnings growth for the next six to eight quarters. For PCJ, it's not trying to identify a company that has had one quarter of outperformance or one quarter of good news or negative news, but rather looking for companies with a business model that can grow over longer periods of time. Some of the key considerations we think of are: how strong is management, do they have a demonstrated track record of success?, do they have a clear and defined timetable for meeting growth objectives? We do a thorough assessment of products and services to look at competitive strengths and the catalysts for earnings growth going forward. We do a real assessment of where the earnings are coming from, are those earnings sustainable and repeatable and defensible over longer periods of time; are we seeing increased profitability because of revenue expansion, because of cost cutting; are they firm and repeatable earnings growth catalysts that we're seeing that allow the company to generate profits over longer periods of time. One of the skills that we bring once we determine the extent of the growth sustainability is to determine the extent to which that growth is reflected in the current stock price, it's no good in finding growth companies if the market already knows about it. We're really looking for unrecognized earnings growth. We are trying to find stocks that are trading below what our implied target price is for an individual business.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 38 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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