Jordan Wealth Management Group - ScotiaMcLeod Truro

In the attached report, we take a look at the current valuation and estimates for the S&P/TSX 60 Index. Interestingly, the index is trading at approximately 14.3x earnings in 2010 based on a simple average, bottom-up methodology. This is premised upon analyst forecasts looking for earnings growth of approximately 29% between 2009 and 2010, revenue growth of 12%, and margin expansion of approximately 220 basis points. Depending on your view of the type of economic recovery that eventually lies ahead, these numbers may lean toward the optimistic scenario. For argument sake, if we were to instead assume a more modest rate of growth in 2010 (approximately 5%), current price levels would imply a valuation of 17.0x earnings. Read more