Globe says WestJet, others positioned for growth

2012-05-11 09:17 ET - In the News

See In the News (C-WJA) WestJet Airlines Ltd

The Globe and Mail attempts to identify companies that are gearing up for growth and profitability in its Friday, May 11, edition. The Globe's David Parkinson writes in the Number Cruncher column that he looked for companies that have seen substantial increases in both their capital spending and their profit margins over the past year. Brockhouse Cooper analyst Pierre Lapointe notes that most companies have enjoyed surging profit margins in the post-recession recovery, but many have been unusually conservative in spending the resulting influx of cash. With profit margins having peaked and showing signs of turning downward, he says, companies are going to have to invest that cash in building their business if they expect their profits to grow. That means more capital spending -- investing in property, facilities and equipment. Mr. Lapointe says: "To us, the best strategy is to focus on companies which are working on increasing their market share by expanding. ... The ones with growing margins are even better positioned." Companies that are pumping up their capital spending and positioning themselves ahead of rivals are China Gold International Resources, New Gold, Open Text, Russel Metals and WestJet Airlines.