she's prettier than her picture

In my continual search for investment-grade stocks, on 12/10/2012 I searched for ASX-listed stock that met the following criteria:

Income Dividend Yield > 0.05
Company Statistics Market Cap > 50000000.00
Value P/E Ratio < 15.00
Growth EPS 5 yr. avg. growth > 0.10
Risk Debt/equity ratio (industrials) < 0.50,

and I ended up with 26 companies including TGA, which relative to the above criteria was listed as:

5.07% . . $276,648,188 . . 9.55 . . 10.6% . . 10.0%

I was surprised to see TGA's EPS 5 yr avg growth at only 10.6%. The problem is that the base year is YE 30/03/2007, which Morningstar holds is 11.5 cents. The company floated in December 2006, and TGA's 2007 annual report states that for comparison purposes, dividing the total earnings by the total shares as at 30/03/2007 is a more reasonable metric, and this gives 5.1 cents. The CAGR based on 5.1 cents is about 30%, which puts TGA in the top half dozen of the 26-company list. If you ignore 2007, then the CAGR for four years is about 23% – still a great deal better than 10.6%, and good enough to make the top 8 of the 26. There are other factors that allow TGA to be preferred to some, if not all of the top 8.

The point I want to make is that if an investor had a filter that required a CAGR of EPS for the last five years that is greater than 10.6%, TGA would be excluded if Morningstar figures are used. I know enough about TGA to pick up on the problem, but not enough about contending stocks to rectify their possible exclusion as a result of incorrect metrics. I do not want to exaggerate the significance of the 2007 EPS metric – all I want to point out that if a mob like Team Invest were trawling for value, TGA could slip through the net on the basis of a 5-year EPS CAGR criterion.

By the way, the 26 companies were HSN, WLL, BYI, WTF, ABY, FWD, RCG, MGX, ALU, LYL, GRR, DTL, GAP, TGA, ILU, BCI, SDM ORL, MND, MIN, LGD, ASZ, IMF, IMD, ASL and CDA. I have in the past looked at many of these, and for some reason preferred TGA, but I'll look again in coming days.