EVA Portfolios Continue To Outperform Market in 2002

Toronto, Ontario - AKR Capital Research today released results of a study into portfolio performance of Canadian EVA companies for fiscal 2002. The results revealed that a portfolio of TSX Composite companies with positive EVA at the end of fiscal 2001, outperformed the benchmark TSX Composite index during fiscal 2001 for the 6th consecutive year. The portfolio lost 4.5 percent compared to the TSE300 index, which lost 13.97 percent in 2002 (excluding dividends). In total, 67 of the 139 companies in the portfolio saw their share price increase in 2002. The table belows presents the performance over the past 6 years.

Conversely, a porfolio of negative EVA companies generated a loss of 18.4 percent, much worse than the TSX Composite return for 2002

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 2001
Number of Companies in Portfolio 116 157 132 134 145 139
Total Return for EVA Portfolio(%) The Following Year 24.7 0.5 29.1 27.4 4.7 -4.5
Return for TSE300 Index(%) 13.0 -3.19 29.7 6.2 -16.2 -13.97

"The results for fiscal 2002 continues to uphold the trend we have been seeing, 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:

  • Niko Resources Ltd +222.5%
  • GoldCorp Inc.. +107.8%
  • Meridian Gold Inc. +68.6%
  • CHC Helicopters Inc. +60.2%
  • Ultra Petroleum +59.7%
  • WinPak Inc. +59.2%
  • Worst Performing EVA Stocks:

  • Mosaic Group --98.8%
  • Microcell Telecommunications Inc. -97.3%
  • Cable Satisfaction International -92.03%
  • Burnsand Inc. -90.6%
  • Pivotal Corp. -88.7%