Sunday, August 23, 2015

Holiday

I am on holiday. Be back on August 31.

Friday, August 21, 2015

BlackBerry Ltd.

Sound bite for Twitter and StockTwits is: Cheap and risky. I would not be currently interested in this tech stocks. Often once a tech stock becomes a has-been, they seldom recover. I wish the company well because I always like it and it is great to see good Canadian tech stocks. See my spreadsheet at bb.htm.

I do not own this stock of BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY), but I used to. I bought this stock for capital gain. I first bought it in 1999 and then some more in 2000. I sold some in 2006 and 2007 to lock in some profit. I sold the rest of my stock in 2010.

Two positive things to say about this stock is that it still has a cash flow and they it has a lot of cash on hand. Cash is equal to 28% of the stock price in CDN$ and US$.

I made money on this stock, but I bought it in 1999 when it was doing good tech. I made some 20% per year total return. I know that I generally buy dividend paying stock, but I do like tech stocks and I bought this stock just for capital gains.

This stock peaked in around 2011. If you look at growth, it is good for the last 10 years, but there has been no growth over the past 5 years. The company is reporting on US$, so I will use this currency. Revenue is down by 25.9% over the past 5 years and up by 9.5% over the past 10 years. Analysts see only a further decline in Revenue. If you compare the 12 months to the end of the financial years of February 2015 to the 12 months to the end of the first quarter of 2016, Revenue is down by 9%.

This is repeated in cash flows where CFPS is down by 24.3% and up by 19.5% per year over the past 5 and 10 years. If you compare the 12 months to the end of the financial years of February 2015 to the 12 months to the end of the first quarter of 2016, Cash Flow is down by 20%.

For EPS, there have been no positive values for the last 3 years. In total EPS is down by 113% and 259% over the past 5 and 10 years. Analysts do not see any positive earnings for this stock over the new few years. If you compare the 12 months to the end of the financial years of February 2015 to the 12 months to the end of the first quarter of 2016, EPS is up by 46%. However, this just points to lower losses, not any positive earnings.

The debt ratios are very good. The Liquidity Ratio is 3.06, the Debt Ratio is 2.10 and the Leverage and Debt/Equity Ratios are 1.91 and 0.91 for the financial year ending in February 2015.

The 10 year P/S Ratio is 1.97 and the current P/S Ratio is 1.15 a values some 41% lower. This current P/S Ratio is based on 2016 Revenue of $3512M US$ and a stock price of $7.66 US$. This stock price testing suggests that the stock price is relatively cheap. However, Revenue is declining.

If you look at what analysts suggest for 2017, Revenue of $1809M and the ratio becomes 2.24. On the other hand analyst's estimates can be very wrong for the current year, let alone for future years. If you use the Revenue for the 12 months to the current quarter, the P/S Ratio is 1.34 and this is 32% lower than the 10 year P/S Ratio.

I get a 10 year Price/Cash Flow per Share Ratio of 8.74. The current P/CF Ratio is 6.78 a values some 22% lower. This current ratio is based on a stock price of $7.66 US$ and cash flow estimate of $598M US$. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 4.29. The current P/B Ratio is 1.16 based on BVPS of $8.68 CDN$ and a stock price of $10.03 CDN$. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy, Hold, Underperform and Sell recommendations. The 12 month stock price consensus is $8.75 US$. This implies a total return of 14.23% all from capital gain.

This article in Business Insider talks about Blackberry developing an android phone. This article inRecombu documents this company's rise and fall. This article in CanTech talks about how Blackberry will work when it does not make phones.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

BlackBerry Ltd. develops hardware and software solutions for mobile communications. It provides platforms and solutions, which support multiple wireless network standards through the development of integrated hardware and software services. Its web site is here Blackberry.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Thursday, August 20, 2015

EnerCare Inc.

Sound bite for Twitter and StockTwits is: Dividend growth stock, expensive. This stock has turn back into a dividend growth stock. However, I would consider it expensive until it can start to growth Revenue, Earnings and Cash Flow. Dividend Payout Ratio for EPS is too high. See my spreadsheet at eci.htm.

I do not own this stock of EnerCare Inc. (TSX-ECI, OTC-CSUWF). I started to follow this stock in 2009 when it was an income trust. This was one of a few income trusts that I followed because it was recommended by MPL communications.

When this company became a corporation, it cut its dividend by almost 50%. That leads to dividends declining by 4.4% and 9.5% per year over the past 5 and 10 years. However, the company has again started to raise dividends and they are up by 1.4% per year over the past 4 years.

In 2015 they raised the dividend an unprecedented 20.7%. Dividends are still paid monthly. Dividends are still almost 35% lower than what they were in 2008, but this is a big commitment on their part to again be a dividend growth company.

Unfortunately they cannot afford these dividends. The Dividend Payout Ratio for 2014 was 201%, a decline from the 5 year median of 456%, but still not a good payout ratio. Although analysts expect this ratio to improve, it will not be below 100% anytime soon.

You can use other dividend payout ratios such as for CFPS where the DPR is 52% for 2014 and has a 5 year median value of 35%. For the next few years this ratio is expected to be around 35%. You can also use the Funds from Operations (FFO). Here the DPR for 2014 is 58.5% and this is expected to go lower in the future.

Shares have increased by 13% and 6.4% per year over the past 5 and 10 years. I will look at per share values because of this. The Revenue growth is low to moderate. FFO growth is non-existent. Earnings growth is non-existent to low. Cash Flow growth is non-existent.

Revenue per share has increased by 0.8% and 3.2% per year over the past 5 and 10 years. Revenue growth is expected to be good in 2015. FFO has declined by 1.9% and 2.89% per year over the past 5 and 10 years. It is expected to well in 2015 at around 47%. If you compare the 12 month periods to the end of 2014 and to the end of the second quarter, FFO has grown at 48%.

EPS has declined by 5% and increased by 0.7% per year over the past 5 and 10 years. ESP is expected to growth 50% this year. If you compare the 12 month periods to the end of 2014 and to the end of the second quarter, EPS has grown at 2.9%. Analysts missed the market in 2014 expecting EPS of $0.47 and EPS came in at $0.34.

CFPS is down by 11.4% and 4.8% per year over the past 5 and 10 years. Analysts expect growth of around 40% in CF this year. If you compare the 12 month periods to the end of 2014 and to the end of the second quarter, CF has declined at 2.5%.

The 5 year low, median and high median Price/Earnings per Share ratios are 53.33, 60.37 and 67.20. These are out of line for this type of stock. The 10 year corresponding values are lower, but still too high at 28.63, 35.71 and 42.78. The current P/E Ratio at 27.98 is high for this type of stock.

The Price/Graham Price Ratio is too high at 1.85. The Price/Book Value per Share Ratio is currently too high at 2.74, and the P/S Ratio is too high at 2.35.

The 5 year high Price/FFO Ratio is 9.34 and the 10 year P/FFO is 8.84. The current P/FFO is 10.57 suggests that the stock price is relatively high. The current P/FFO is based on FFO 2015 estimate of 1.35 and a stock price of $14.27.

The 10 year median Price/Cash Flow per Share Ratio is 4.82 and the current P/CF Ratio at 6.83 is some 33% higher. The current ratio is based on 2015 CFPS estimate of $2.22 and a stock price of $14.27. This stock price testing suggests that the stock price is relatively expensive. I wonder about the CFPS estimate as per above comments.

Looking at the analysts' recommendations, I find Buy and Hold recommendations. The consensus would be a Buy recommendation. The 12 month stock price consensus is $16.70. This implies a 12 month total return of 22.92% with 5.89% from dividends and 17.03% from capital gains.

An article in the HPAC Magazine talks about this company's rebranding. This article in Watch List News talks about this being rated by some analysts. In this Motley Fool article by Joseph Solitro, he says this is a cheap stock to buy and hold forever. He compares his current P/E of 29.4 to his 5 year average P/E Ratio of 450.9 to suggest that the stock is cheap. You have to wonder about this as I consider a P/E Ratio of 450 to be a rather silly one.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

EnerCare Inc. owns a portfolio of waterheaters and other portfolio assets, which they rent to primarily residential customers. They rent out waterheaters in the GTA and southern Ontario. EnerCare also owns EnerCare Connections Inc., a leading sub-metering company, with metering contracts for condominium and apartment suites in Ontario, Alberta and elsewhere in Canada. Its web site is here EnerCare Inc.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Wednesday, August 19, 2015

TECSYS Inc. 2

On my other blog I am today writing about cash flows and working capital continue...

Sound bite for Twitter and StockTwits is: Stock price is expensive, momentum lost. This stock has recently lost its upward momentum. I still like this stock and will be holding on to what I have, but it seems a little pricey at present. Tech stocks have often been pricey and gain can be made on short term momentum, but this stock seems to have lost that lately. See my spreadsheet at tcs.htm.

I own this stock of TECSYS Inc. (TSX-TCS, OTC- TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

There is a lot of insider ownership by the Brereton family and a cursory view I come up with some 40% ownership by this family. The Chairman owns stock worth some $30.3M and about 27% of the outstanding stock. The CFO owns shares worth $4.2M and some 3.8% of the outstanding stock. They are both members of the Brereton family. Insider selling was at $0.04M and some 0.03% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 21.69, 29.91 and 37.13. The corresponding 10 years values are a lot lower at 19.65, 16.41 and 19.65. The current P/E Ratio is 34.62 based on a stock price of $9.00. Based on 5 year P/E Ratios the stock price is relatively reasonable, but above the median.

I get a Graham Price of $3.33. The 10 year low, median and high median Price/Graham Price Ratios are 0.94, 1.19 and 1.46. The current P/GP Ratio is 2.70 based on a stock price of $9.00. This stock price testing suggests that the stock price is expensive. On an absolute basis, a P/GP Ratio of 2.70 is high.

The 10 year Price/Book Value per Share Ratio is 1.47. The current P/B Ratio at 4.74 is some 223% higher. This stock price testing suggests that the stock price is expensive. On an absolute basis, a P/B Ratio of 4.74 is high.

The current dividend yield is 1.11%. The historical low is 1.09% and so the current one is getting close to historical low. However, history on this stocks dividend only goes back 7 years. The 5 year median is 2.43% and the historical median is 2.64%. The current one is some 54% and 58% lower than these values. This stock price testing suggests that the stock price relatively expensive.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations and the consensus would be a Buy recommendation. The 12 month stock price consensus is $11.50. This implies a total return of 28.89% with 27.78% from capital gains and 1.11% from dividends.

This article in OCTA Finance says PI Financial has raised the target price on this stock to $11.00. This March 2015 article in Market Wired talks about this company doing a bought deal offering of common shares. They will be selling 562K shares at $8.90. This press release at Market Watch talks about TECSYS focusing on complex supply chains.

This is the second of two parts. The first part was posted on Tuesday, August 18, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Tuesday, August 18, 2015

TECSYS Inc.

Sound bite for Twitter and StockTwits is: Dividend growth small cap. See my spreadsheet at tcs.htm.

I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

Dividend is currently low, but it used to be higher. The current dividend yield is 1.11%, the 5 year median dividend yield is 2.05% and when I bought this stock in 2011 it was 3.11%. Dividend growth is moderate at 12.5% and 12.3% per year over the past 5 and 7 years. Dividends just started in 2008.

Their last dividend increase was in 2015 and the increase was for 11.1%. The Dividend Payout Ratio is good with the 5 year median for EPS 66.7% and for CFPS at 26.5%. The DPR for 2014 was similar with DPR for EPS at 69.2% and for CFPS at 27.7%. These are expected to be much lower in 2015.

The total return over the past 5 and 10 years is at 41.51% and 20.21% per year. The portion of this total return attributable to dividends is 2.44% and 1.36% per year. The portion of this total return attributable to capital gains is 39.07% and 18.85% per year.

Since I bought this stock in 2011, my total return is 46.39% per year with 43.67% per year from capital gains and 2.72% per year from dividends. For me dividends have covered 16.8% of the cost of my stock and I am earnings 5.2% on my initial investment.

The outstanding shares have not changed much with them being up by 0.2% and down by 1.2% per year over the past 5 and 10 years. Shares in the past have grown due to Stock Options, but the Stock Option plan has been cancelled. Shares have decreased due to Buy Backs. Growth in Revenue, Earnings and Cash Flow are all good.

Revenue is up by 9.3% and 9.2% per year over the past 5 and 10 years. Revenue per Share is up by 9.1% and 10.5% per year over the past 5 and 10 years. Analysts expect Revenue growth of around 13% for 2016. The financial year ends at the end April of each year, so the financial year I am reporting on ended April 30, 2015.

There were mostly earning losses until 2007. The total growth in EPS over the past 10 years is 1400%. I cannot do a compound rate because 10 years ago there was an earning loss. EPS is down by 5.2% over the past 5 years. However, the earnings on this company fluctuate and if you look at 5 year running averages over the past 5 year the increase is 21.4% per year. Analysts expect good growth in EPS for 2016 at 100%.

The Cash Flow has grown at 26.4% and 13.5% per year over the past 5 and 10 years. The CFPS has grown at 26.2% and 14.95 per year over the past 5 and 10 years.

Return on Equity has not been great. The ROE has only been above 10% once in the past 5 years and three times in the past 10 years. The ROE for 2015 (April) is 6.5% and the 5 year median is just 6.8%. The ROE on comprehensive income is a little higher at 6.9% for 2015 with a 5 year median at 6.9% also.

The Debt Ratios are good. The Liquidity Ratio is 1.59. The Debt Ratio is 1.97 and the Leverage and Debt/Equity Ratios are 2.03 and 1.03, respectively.

This is the first of two parts. The second part will be posted on Wednesday, August 19, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Monday, August 17, 2015

Newfoundland Capital Corp.

On my other blog I am today writing about stocks I looked at more closely in my monthly update, part 2 continue...

Sound bite for Twitter and StockTwits is: Stock price is reasonable, but above median. I think that the current stock price looks reasonable. I do not know why the one analyst thinks that the stock price will go down or maybe he just sees the whole marketing going down. We are probably overdue for a bear market. This is not a dividend growth stock, so at the moment I am not interested in it. See my spreadsheet at ncc.htm.

I do not own this stock of Newfoundland Capital Corp. (TSX-NCC, OTC-none). I started to follow this stock as it was suggested as a decent dividend paying stock for investment purposes in the latter part of 2009. It is not on any dividend lists that I follow so I took a look at it.

This is a dividend paying stock, but not a dividend growth stock. Dividends have gone down as well as up and the current dividend is the same as was paid in 2008 before the dividend was cut in 2009 and then restarted in 2010. Over the longer term, dividends have gone but, but not so over the shorter term. The Dividend growth over the past 10 years is at 16% per year.

For me to consider a stock to be a dividend growth one, it would have to be consistent in paying dividends as well as increasing them over time. In 2009 the dividend cut was not the only one in recent history. This stock paid dividends from 1997 to 1999 and then stopped them from 2000 to 2003. They may have had a good reason to do so, but this is hard on shareholders who invest in stock to get a dividend income.

This stock has done well over the past 5 and 10 years to date. The 5 and 10 year total return is at 12.41% and 9.21% per year. The portion of this total return from dividends is at 1.71% and 1.59% per year. The portion of this total return from capital gains is at 10.70% and 7.63% per year.

The outstanding shares have decreased over the past 5 and 10 years at 3.1% and 2.2% per year. The shares have increased due to Stock Options and have decreased due to Buy Backs. This means that I will focus on Revenue, Earnings and Cash Flows not the per share values. Revenue growth is good. Earnings growth is non-existent to low and cash flow growth is good.

Revenue has grown at 8% and 9% per year over the past 5 and 10 years. It is expected to grow about 5.5% in 2015. Net Income or Earnings have declined by 6.1% and grown by 1% per year over the past 5 and 10 years. Earnings have fluctuated a lot, so it is worthwhile look at the 5 year running average growth and this is good at 11.6% and 13.8% per year over the past 5 and 10 years. Strong earnings growth of 19% is expected in 2015.

Cash Flow has grown by 12.2% and 12.3% per year over the past 5 and 10 years. Analysts do not expect much growth from cash flow for 2015 at less than 1%. However, cash flow has grown by 10.7% if you compare the 12 month period to the end of the second quarter to the 12 month period to the end of 2014.

Of the debt ratios, the Liquidity Ratio is the weakest. For 2014 it is just 0.94. This means that current assets cannot cover current liabilities. However, if you add in cash flow after dividends it becomes 1.47. This means that the company will rely on cash flow to cover current liabilities. The Debt Ratio for 2014 was good at 1.65. The Leverage and Debt/Equity Ratios are a little high at 2.47 and 1.45 for 2014.

The 5 year low, median and high median Price/Earnings per Share Ratios are 20.16, 22.58 and 25.00. The 10 years ratios are lower at 13.06, 15.86 and 18.66 and are more reasonable for this sort of stock. The current P/E ratio is 15.09 based on a stock price of $11.47 and 2015 EPS estimate of $0.76. This stock price testing suggests that the stock price is relatively reasonable, even relatively cheap.

I get a Graham Price of $9.40. The 10 year Price/Graham Price Ratios are 1.14, 1.29 and 1.44. The current P/GP Ratio is 1.22 based on a stock price of $11.47. This stock price testing suggests that the stock price is relatively reasonable. Stock price is below the relative median.

I get a 10 year Price/Book Value per Share Ratio of 2.03. The current P/B Ratio is 2.22 based on a stock price of $11.47 and current BVPS of $5.17. The current P/B Ratio is some 9.2% higher than the 10 year P/B Ratio. This stock price testing suggests that the stock price is relatively reasonable. Stock price is above the relative median.

The current dividend yield is 1.31% based on dividends of $0.15 and a stock price of $11.47. The 5 year median dividend yield is 1.75% and the current dividend yield is some 25% lower. This stock price testing suggests that the stock price is expensive. However, this historical median dividend yield at 1.54% is just 15% higher. This stock price testing suggests that the stock price is relatively reasonable. Stock price is above the relative median.

There is just one analyst following this stock and the rating given is a Hold. The 12 month stock price is $10.00. This implies a negative total return of 11.51% with a capital loss of 12.82% and dividends of 1.31%.

In this news article in The Chronicle Heard Newfoundland Capital Corp says their profits dropped in the second quarter due to an income tax increase. This interesting article in Business in Vancouver talks about investors seeing ratio as a better business than TV.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Newfoundland Capital Corporation Limited also owns and operates Newcap Radio. Newcap Radio is one of Canada's leading radio broadcasters with 79 licenses across Canada. The Company reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking. Its web site is here Newfoundland Capital Corp.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Friday, August 14, 2015

Loblaw Companies Ltd. 2

Sound bite for Twitter and StockTwits is: Price is reasonable to expensive. All the test show expensive except for the historical dividend yield test which shows stock price to be reasonable. Compared with the last 5 years, the stock price is expensive, but not historically. The dividend yield is a good test because you use current data (not estimates or last quarters' data) against historical or 5 year values. See my spreadsheet at lob.htm.

I do not own this stock of Loblaw Companies Ltd. (TSX-L, OTC-LBLCF), but I used to. I owned it from 1996 to 2007. It was originally a great stock. I sold it in 2007 because it was having problems with its tech upgrade to its supply system.

George Weston Limited is a large owner of this company. According to the insider trading report they now own some 45.5% of this company worth around $13.5B. They used to own some 62.8% worth around 7.5B. The stock price has gone up and the company issued shares to cover the Shoppers Drug Mart purchase.

In insider trading there was a bit of insider buying and insider selling was at $13.8M with net insider selling at $13.4M. This is some 0.05% of the market cap of this stock. This is a little high relatively speaking. The median net insider selling is at 0.02% for the stock I cover and 70% of the stocks I cover have the net insider selling at 0.09% or lower.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.79, 16.12 and 18.44. This is close to the corresponding 10 years median values of 13.75, 16.06 and 18.36. The current P/E Ratio is 26.97 based on a stock price of $72.00 and 2015 EPS estimate of $2.67. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $43.69 and the 10 year low, median and high median Price/Graham Price Ratios are 1.05, 1.18 and 1.33. The current P/GP Ratio is 1.65 based on a stock price of $72.00. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 1.74. The current P/B Ratio is 2.27 based on BVPS of $31.77 and a stock price of $72.00. The current P/B Ratio is some 30% higher than the 10 years median ratio. This stock price testing suggests that the stock price is relatively expensive.

The 5 year median dividend yield is 2.15% and the current dividend yield at 1.39% is some 35.5% lower. This stock price testing suggests that the stock price is relatively expensive. However, the historical dividend yield is much lower at 1.19%. The current dividend yield is some 16.71 above this. This stock price testing suggests that the stock price is relatively reasonable.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold Recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month consensus stock price is $76.80. This implies a total return of 8.06%, with 6.67% from capital gains and 1.39% from dividends.

The reason I sold Loblaws was that they could not seem to resolve their supply chain problems. According to this article in 2012, Loblaws says that problems are resolved. I shop at Loblaws and I must admit I wonder about this. When things disappear from the shelves it seems like weeks before they reappear. Metro seems to do a better job. A recent article on CBC says that Loblaws will close 52 unprofitable stores in Canada in the next 12 months. A recent article in the Motley Fool says that Loblaws is still a good buy. (Do not forget that sometimes you need to use your browsers arrows to go out and back into a Motley Fool article to see the fully article.)

This is the second of two parts. The first part was posted on Thursday, August 13, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services. Loblaw offers Canada's strongest control (private) label program, including the unique President's Choice, no name and Joe Fresh brands. In addition, the Company makes available to consumers President's Choice financial services and offers the PC point loyalty program. Its web site is here Loblaw.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Thursday, August 13, 2015

Loblaw Companies Ltd.

Sound bite for Twitter and StockTwits is: Dividend Growth Retail Stock. Earnings for this company peaked in 2011. This is not the only retail stock having problems with the recovery from 2008. See my spreadsheet at lob.htm.

I do not own this stock of Loblaw Companies Ltd. (TSX-L, OTC-LBLCF), but I used to. I owned it from 1996 to 2007. It was originally a great stock. I sold it in 2007 because it was having problems with its tech upgrade to its supply system.

This first thing to notice about the dividends of this company is that part of each dividend is designated at ineligible. Both eligible and ineligible have gross up and dividend tax credits. However, the ineligible dividends are taxed at a higher rate than the eligible dividends. For example, the dividend payable on October 1, 2015 some 3.2% of the dividend is ineligible.

The other thing to notice about dividends for this company is that the dividend is low and the dividend growth is low. Current dividend is 1.39%. The 5 year median dividend is 2.15% a bit better for dividends. The 5 and 10 year dividend growth rate is 3% and 2.5% per year. The reason for the low growth is that dividends were flat from 2006 to 2011, inclusive. Since they started to raise the dividend again, growth is at 5% per year.

All the studies I have seen say that shareholders do the best with high yields. Other things that are good are high growth dividend growth and low Dividend payout Ratios. On this company at least the DPR were low until 2014 with the 5 year median DPR for EPS at 38%. The DPR for EPS for 2014 was 696%. The 5 year median DPR for CFPS is at 15% as is the DPR for 2014 at 15%. So the DPR for CFPS is low. The DPR for EPS is expected to be low again in 2015.

The total return is low for the past 10 years, but good for the past 5 years. The 5 and 10 year total return is 14.08% and 3.87% per year. The portion of this return attributable to dividends is 1.82% and 1.40% per year. The portion of this return attributable to capital gain is 12.27% and 2.48% per year.

Outstanding shares have increased by 8.4% and 4.2% per year over the past 5 and 10 years. The shares have increased due to Share Issues, Stock Options and DRIP. The shares have decreased due to Buy Backs. Growth in Revenue goes from non-existent to moderate. Growth in EPS is non-existent. Growth in Cash Flow is non-existent. Because shares have been increasing, it is the per share values that are important.

Revenue is up by 6.8% and 5% per year over the past 5 and 10 years. Revenue per share is down by 1.5% and up by 0.8% per year over the past 5 and 10 years. In 2014 Revenue increased by 32%, but Revenue per Share was down by 9.9%. There is because shares increased by 46% in 2014. Most of this increase was due to the purchase of Shoppers Drug Mart. Revenue is expected to increase by around 6.7% in 2015. Shares at the end of the second quarter were down slightly and Revenue was up by around 7%.

EPS is down by 43% and 27.5% per year over the past 5 and 10 years. Looking at 5 year running averages, EPS growth looks better with EPS up by 5.5% and down by 2.7% per year over the past 5 and 10 years. The company is expected to do better in 2015 for EPS than for 2014. EPS is expected to be around $2.67 in 2015 and for the 12 month period to the end of the second quarter, EPS is $1.03.

Cash Flow per share is down by 10.7% and 7.65 per year over the past 5 and 10 years. Looking at 5 year running averages, growth is low with growth at 2.8% per year over the past 5 and 10 years. Cash Flow is expected to grow in 2015 by some 96%. If you compare the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, Cash Flow is up by 35.8%.

Return on Equity has been over 10% twice in the past 5 years and four times in the past 10 years. The ROE for 2014 was 0.4%, but 5 year median ROE was 9.8% The ROE for comprehensive income was even lower at 0.1%, with a 5 year median ROE of 9.7%. The year of 2014 was not a great earnings year for the company.

The debt ratios are ok. The Liquidity Ratio was 1.47 in 2014. The Debt Ratio was 1.63 in 2014. The Leverage and Debt/Equity Ratios were 2.63 and 1.63 for 2014. Not great, but passable.

This is the first of two parts. The second part will be posted on Friday, August 14, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services. Loblaw offers Canada's strongest control (private) label program, including the unique President's Choice, no name and Joe Fresh brands. In addition, the Company makes available to consumers President's Choice financial services and offers the PC point loyalty program. Its web site is here Loblaw.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Wednesday, August 12, 2015

DirectCash Payments Inc.

On my other blog I am today writing about stocks I looked at more closely in my monthly update continue...

Sound bite for Twitter and StockTwits is: Probably cheap, but risky. I think that the dividend is at risk as the company cannot cover the dividends with earnings, but can with cash flow. The current debt ratios make the company vulnerable. See my spreadsheet at dci.htm.

I do not own this stock of DirectCash Payments Inc. (TSX-DCI, OTC-DCTFF). I wanted to review stocks touted in the 2009 Money Show. There was a lot of talk at this show about some of the Unit Trusts being currently good buys with very good yield. This is one stock that was recommended.

This ex-income trust company is having a hard time. A lot of the ex-income trust companies are having a hard time. This is one of the ex-income trust companies that did not cut their dividend. However, they are currently not earning enough to cover their current dividend.

The dividend is currently quite high. The dividend growth has been quite low. The Dividend Payout Ratios are too high for EPS. The current dividend yield is 10.75% based on dividends at $1.44 and stock price of $13.40. Dividend yield has been growing because the stock price has been dropping. The 5 year median Dividend Yield is lower at 6.57%

The dividend growth over the past 5 and 9 years is at 0.3% and 4.1% per year. The last dividend raise was in 2014 and it was a 4.3% dividend raise. The DPR for EPS for 2014 was 667% and the 5 year median is 300%. Problem is that analysts expect an earnings loss this year and next year. The DPR for CFPS is better with the DPR for CFPS in 2014 at 37% and the 5 year median at 41%. So they still can cover dividend with cash flow.

The outstanding shares have increased by 7.1% and 5.8% per year over the past 5 and 10 years. Shares have increased due to share issues. Revenues growth is good. Earnings growth is non-existent to good. Cash Flow growth is good.

Revenue per share is up by 15.2% and 15.8% per year over the past 5 and 10 years. EPS is down by 29.4% over the past 5 years. EPS peaked in 2011 and has been low ever since. Ten years ago the company has had an earnings loss so EPS has grown at 7766%. Using 5 year running averages EPS has grown at 18.5% and 39.9% per year over the past 5 and 6 years. Cash Flow per Share is up by 11% and 11.2% per year over the past 5 and 10 years.

Debt ratios are not very good. The Liquidity Ratio is 0.75 for 2014. This means that current assets cannot cover current liabilities. If you add in Cash Flow after dividends the ratio is 1.29. The Debt Ratio is 1.33 for 2014. I prefer both these debt ratios to be at least 1.50. The Leverage and Debt/Equity Ratios are high at 4.03 and 3.03. When debt ratios are not good, this makes a company vulnerable, especially in the bad times.

There is some insider ownership with CEO owning shares worth some $51.5M and this would be around 15% of the outstanding shares. Over the past year there was mostly insider buying with net insider buying at $121K. This is 0.05% of the market cap and therefore relatively high amount.

The 5 year low, median and high median Price/Earnings per Share Ratios are 43.07, 48.91 and 54.76. The corresponding 10 year values are 51.62, 63.16 and 75.93. These ratios are way out of line for this stock. Also, the current and next year's P/E Ratios are negative. I cannot not use any of this to test stock's price.

I get a Graham Price of $4.90. The 10 year low, median and high median Price/Graham Price Ratios are 2.18, 2.46 and 2.85. These values are way out of line for such a stock as this. The current P/GP Ratio is 2.73 based on a stock price of $13.40. This is below the top 10 year ratio and suggests that the stock's price is in a reasonable range, but over the median price. This also is not a good test for this stock.

I get a 10 year Price/Book Value per Share value of 2.52. The current P/B Ratio is 2.63 a value only some 4.4% above the 10 year ratio. The P/B Ratio is based on BVPS of $5.09 and a stock price of $13.40. This stock price suggests that the stock's price is in a reasonable range, but over the median price. These P/B Ratios are also quite high. Of the stock that I cover, the median P/B Ratio 1.82 and 70% of the stocks have a ratio of 2.09 or below.

The current Dividend Yield is 10.75% based on dividends of $1.44 and a stock price of $13.40. The 5 year median dividend is 6.57% and some 63% lower than the current dividend. The historical median dividend yield is 7.56% and this is some 42% lower than the current dividend yield. This stock price test suggests that the stock price is reasonable.

This historical high dividend yield is 21% and this is 49% higher than the current dividend yield. So this just makes this high yield give a reasonableness rating. Also, I have a problem with this test because the company cannot afford the dividends it is paying and I think that the dividends are at risk.

The 10 year median P/S Ratio is 2.03 and the current P/S Ratio 0.87. The current P/S Ratio is based on 2015 Revenue Estimate of $272M and a stock price of $13.40. The current P/S Ratio is some 33% lower than the 10 years median ratio. This stock price testing suggests that the stock price is relatively cheap. I see no problem with this test. The 10 year P/S Ratio is high, but the current one is quite low.

The 10 year Price/Cash Flow per Share Ratio s is 7.36 and the current P/CF Ratio at 4.17 is some 43% lower. This ratio is based on cash flow over the past 12 months to the end of the first quarter and a stock price of $13.40. There are no estimates available. This stock price testing suggests that the stock price is relatively cheap. I see no problem with this test.

When I look at analysts' recommendations, I find Buy and Underperform recommendations. The consensus would therefore be a Hold. The 12 month consensus target stock price is $20.60. This implies a total return of 64.48% with 10.75% from dividends and 53.73% from capital gain. This does not really accord with analysts' recommendations.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

DirectCash is the leading provider of ATMs, debit terminals, prepaid phone cards and prepaid cash cards in Canada. They have built a substantial technological, sales and service infrastructure that enables them to offer convenient and secure revenue streams for businesses across the country. DirectCash operates in Canada, the United States and Mexico.. Its web site is here DirectCash.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

Tuesday, August 11, 2015

Savaria Corporation 2

Sound bite for Twitter and StockTwits is: Stock is expensive. However, the stock current has upwards momentum. There is a lot of insider ownership. There is a large cash balance under this company. See my spreadsheet at sis.htm.

I do not own this stock of Savaria Corporation (TSX-SIS, OTC-SISXF). I got this stock off the Dividend Blogger site that no longer exists. I am always interested in dividend growth small cap stock. The first few years of accounting were rather confusing, but I think I figured them out in the end.

The CEO/Chairman owns shares worth some $65.3M and some 46% of the outstanding shares. The CFO owns shares worth around 87.3M and some 45% of the outstanding shares. It would seem that a lot of the shares are owned by insiders so that there would not be a lot of shares trading on the TSX. According a chart I looked at there is mostly less than 100K a day traded, but there was a peak of 400K traded in November of 2014.

In 2014 the outstanding shares were increased by some 394K shares for stock options which is an increase of 1.33%. This is relatively large amount. Of the stocks I follow the median increase in shares for stock options is 0.27% and 70% of the companies had increases of 0.57% or less.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.04, 15.98 and 18.91. The 10 year corresponding ratios are similar at 10.94, 15.40 and 19.40. The current P/E Ratio is 21.93 based on a stock price of $5.92 and 2015 EPS estimate of $0.27. This stock price testing suggests that the stock is relatively expensive.

If you consider the cash on hand of $0.98 per share, that would lower the stock price to$4.94 and give a P/E of 18.31. This would allow the stock to sneak into the reasonableness zone as far a stock price goes. This is just another way at looking a P/E Ratios.

I get a Graham price of $3.20. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.17 and 1.42. The current P/GP Ratio is 1.85 based on a stock price of $5.92. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.85. The current P/B Ratio is 3.51 a value some 90% higher. The current P/B Ratio is based on a BVPS of $1.69 and a stock price of $5.92.

Using the Dividend Yield we do not get any different results. The 5 year median dividend yield is 6.91% a value some 60% higher than the current dividend yield of 2.70%. The current dividend yield is based on dividends of $0.16 and a stock price of $5.92. The historical median dividend yield is 3.62% which is still some 25% higher than the current dividend yield. This stock price testing suggests that the stock is relatively expensive.

When I look at analysts' recommendations I find Strong Buy and Buy recommendations. The 12 month stock price consensus is $6.42. This implies a total return of 11.15% with 8.45% from capital gains and 2.70% from dividends. The stock currently has an upwards momentum.

Stephen Takacsy at BNN likes Savaria. There is a positive news item on this company in the Brampton Guardian.

This is the second of two parts. The first part was posted on Monday, August 10, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Savaria Corporation is North America's leader in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures, installs and distributes primarily elevators for home and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts minivans to be wheelchair accessible. Its web site is here Savaria.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.