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Peter Lynch Guru Analysis for Bank of Nova Scotia (The)

BNS 
$67.11
*  
0.55
0.81%
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*Delayed - data as of Jul. 11, 2014  -  Find a broker to begin trading BNS now
Exchange: NYSE
Industry: Finance
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Assessments & Analysis Based on July 10, 2014 close price: $67.66

  for the P/E/Growth Investor based on the criteria of Peter Lynch. Return to BNS Guru Analysis

All Star Guru Scorecard

Source Go Chart %
Peter Lynch 81%
Benjamin Graham 43%
Validea 57%
Motley Fool 59%
David Dreman 57%
Martin Zweig 38%
Kenneth Fisher 40%
James P. O'Shaughnessy 60%



Detailed Analysis

Guru Score: 81%


Determine the Classification:

BNS is considered a "True Stalwart", according to this methodology, as its earnings growth of 12.1% lies within a moderate 10%-19% range and its annual sales of $17,983 million are greater than the multi billion dollar level.This methodology looks for the "Stalwart" securities to gain 30%-50% in value over a two year period if they can be purchased at an attractive price based on the P/E to Growth ratio. BNS is attractive if BNS can hold its own during a recession.


Yield adjusted P/E to Growth (PEG) ratio: [PASS]

The Yield-adjusted P/E/G ratio for BNS (.86), Based on the average of the 3, 4 and 5 year historical EPS growth rates, is O.K.


EARNINGS PER SHARE: [PASS]

The EPS for a stalwart company must be positive. BNS's EPS ($5.05) would satisfy this criterion.


Total Debt/Equity Ratio: [NEUTRAL]

BNS is a financial company so debt to equity rules are not applied to determine the company's financial soundness.


EQUITY/ASSETS RATIO: [PASS]

This methodology uses the Equity/Assets Ratio as a way to determine a financial intermediary's health, as it is a better measure than the Debt/Equity Ratio. BNS's Equity/Assets ratio (6%) is healthy and above the minimum 5% this methodology looks for, thus passing the criterion.


RETURN ON ASSETS: [FAIL]

This methodology uses Return on Assets as a way to measure a financial intermediary's profitability. BNS's ROA (.9%) is below the minimum 1% that this methodology looks for, thus failing the criterion.


FREE CASH FLOW: [NEUTRAL]

The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for BNS (7.66%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.


NET CASH POSITION: [NEUTRAL]

Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for BNS (5.8%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.

 
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