EVA Portfolios Continue To Outperform Market

Toronto, Ontario - AKR Capital Research today released results of a study into portfolio performance of Canadian EVA companies for fiscal 2001. The results revealed that a portfolio of TSE300 companies with positive EVA at the end of fiscal 2000, outperformed the benchmark TSE300 index during fiscal 2001 for the 5th consecutive year. The portfolio earned a 4.7 percent return compared to the TSE300 index, which lost 16.2 percent in 2001 (excluding dividends). In total, 78 of the 145 companies in the portfolio saw their share price increase in 2001. The table belows presents the performance over the past 5 years.

Economic Value Added or Economic Profit, is an alternative performance measure that measures a firm's residual wealth created when its cost of capital is deducted from its operating profit (adjusted for taxes on a cash basis). EVA has gained more prominence as a measurement of financial performance for its ability to filter out accounting items that can distort Net Income.



Fiscal Year 1996 1997 1998 1999 2000
Number of Companies in Portfolio 116 157 132 134 145
Total Return for EVA Portfolio(%) The Following Year 24.7 0.5 29.1 27.4 4.7
Return for TSE300 Index(%) 13.0 -3.19 29.7 6.2 -16.2

"The results for fiscal 2000 and for the past 5 years reveals that a portfolio of EVA generating companies will have a tendency to preserve capital in a down market, while generating a market rate of return in a bull market," says Aman Raina, chief equity analyst at AKR Capital Research. "Ultimately, this is what investors demand in their portfolios".

Highest Performing EVA Stocks:

  • Geac Computers +207%
  • Premdor Inc. +167%
  • ATI Technologies +135%
  • CGI Group Inc. +104%
  • Cryptologic +97%
  • Worst Performing EVA Stocks:

  • Micrologix Biotech -81.72%
  • Premdor Inc. +167%
  • ATI Technologies +135%
  • CGI Group Inc. +104%
  • Cryptologic +97%