The Globe and Mail attempts to pick stocks with solid levels of profitability in comparison with their valuations in its Tuesday, May 29, edition. The Globe's Ian McGugan writes in the Number Cruncher column that stocks that often do well have both high returns on equity and low price-to-earnings ratios, as well as improving prospects. In other words, they churn out earnings but still appear cheap. Mr. McGugan employed the services of CPMS consultant Craig McGee to make today's screen. Mr. McGee only considered companies with market capitalization greater than $1-billion. Companies had to have a positive change in consensus earnings estimate over the past 30 days. Mr. McGee restricted any one sector to no more than three companies. Mr. McGugan warns that investors should note that earnings are volatile. Before buying, he says be sure to do your own research. That said, Mr. McGugan says the strategy does hold promise, at least for nimble investors. Mr. McGee ran a back test beginning Dec. 31, 1996, and found investor would have enjoyed an annualized total return of 17 per cent. Recommended stocks are MacDonald, Dettwiler and Assoc., National Bank of Canada, Jean Coutu Group, BCE and Atco.