Thursday, February 26, 2015

Goodfellow Inc. 2

I own this stock of Goodfellow Inc. (TSX-GDL, OTC- GFELF). I started to look at this stock when I was searching for small cap stocks that paid dividends. It looked like an interesting stock. Goodfellow is a small cap stock that the Investor Reporter has written about a number of times.

In 2014 the outstanding shares were not increased for stock options. When I look at insider trading, I find no insider buying and minimal insider selling. Some 40% of the company is owned by members of the Goodfellow family and Stephen Jarislowsky. Stephen Jarislowsky is a well-known Canadian Financier.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.03, 14.68 and 15.32. The corresponding 10 year P/E Ratios are much lower at 8.09, 11.23 and 13.20. The current P/E Ratio is 12.67 based on a stock price of $10.39 and last 12 months of EPS of $0.82. (There are no estimates for this stock.) This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $16.10. The 10 year low, median and high median Price/Graham Price Ratios are 0.58, 0.65 and 0.75. The current P/GP Ratio is 0.65 based on a stock price of $10.39. This stock price test suggests that the stock price is relatively reasonable. Also, a P/GP Ratio of less than 1.00 suggests that the stock is cheap.

I get a 10 year Price/Book Value per Share Ratio of 0.75. The current P/B Ratio is 0.74 based on a BVPS of $14.05 and a stock price of $10.39. This stock price test suggests that the stock price is relatively reasonable. Also, a P/B Ratio of less than 1.00 suggests that the stock is cheap.

The 5 year median, historical average and historical median dividend yields are 3.85%, 4.66% and 3.85%. The current dividend yield of 4.81% is 25%, 3.4% and 25% above these yields. This stock price test suggests that the stock price is relatively reasonable.

As far as I can see no analysts follow this stock.

This company recently reported their results for the 15 months ending in November 30, 2014. There is an interesting article by Robert Tattersall in the Globe and Mail about a Ben Graham way to detect undervalued stocks. He says that he favors Ben Graham's iconic "net-net working capital" screen as a starting point for identifying undervalued stocks worthy of additional research. This stock is included in his list of undervalued stock. Benjamin Sinclair of Motley Fool has his own take on Robert Tattersall's column. He thinks that this stock is undervalued for good reasons.

Sound bite for Twitter and StockTwits is: Stock price is cheap to reasonable. It may be cheap for a good reason, but I am not ready to give up on this just yet. See my spreadsheet at gdl.htm.

This is the second of two parts. The first part was posted on Wednesday, February 25, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. The company serves customers throughout Canada, the United States and abroad including the UK and China and the Middle East. H.Q is Delson, Quebec, just outside Montreal. It is about 60% owned by insiders. Its web site is here Goodfellow.

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, February 25, 2015

Goodfellow Inc.

On my other blog I am today writing about the effect of changes to outstanding shares for a company continue...

I own this stock of Goodfellow Inc. (TSX-GDL, OTC- GFELF). I started to look at this stock when I was searching for small cap stocks that paid dividends. It looked like an interesting stock. Goodfellow is a small cap stock that the Investor Reporter has written about a number of times.

Dividends are paid twice a year. Dividends are declared ahead of payment and they can go down and well as up. Over the past 10 years dividends are up by just 2.8% per year. Over the past 5 years, dividends have gone up and down, but ended the 5 year period at the same amount as they started. That is there was 0% increase in dividends.

Dividends are quite good, as the current dividend yield is 4.88%. The 5 year median dividend yield is lower at 3.85%. For the stock I bought in 2010, I am earning a dividend yield of 4.15%.

The stock has been struggling lately. It was badly hit in both the recent recessions. I have lost around 3% per year on this stock. The total return for the last 5 and 10 years is 0.55% and 2.79% per year. The capital loss is at 2.95% and 1.59% per year over the past 5 and 10 years. Dividends are at 3.51% and 4.39% per year.

Revenue per Share is up by 2.9% and down by 0.1% per year over the past 5 and 10 years. EPS is down by 8.2% and 7.1% per year over the past 5 and 10 years. Cash Flow per Share is up by 10% and down by 0.7% per year over the past 5 and 10 years.

The Return on Equity has only been higher than 10% once in the past 5 years and that was 5 years ago. The ROE for 2014 was 5.8% and the 5 year median is just 4.5%. For 2014 the ROE on Comprehensive Income was a little lower than that for net income and was at 5.7%. The 5 year median ROE is 4.5%.

The debt ratios are good and they have always been good. The Liquidity Ratio for 2014 is 2.21 and the Debt Ratio for 2014 is 2.56. The Leverage and Debt/Equity Ratios are also quite good at 1.64 and 0.64, respectively. However, the company is in a negative cash position due to a bank overdraft.

Sound bite for Twitter and StockTwits is: Struggling small cap. At the moment I intend to hold on to the shares I have in this company. I bought this stock to try it out and have not investment much. See my spreadsheet at gdl.htm.

This is the first of two parts. The second part will be posted on Thursday, February 26, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. The company serves customers throughout Canada, the United States and abroad including the UK and China and the Middle East. H.Q is Delson, Quebec, just outside Montreal. It is about 60% owned by insiders. Its web site is here Goodfellow.

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, February 24, 2015

Bombardier Inc. 2

I own this stock of Bombardier Inc. (TSX-BBD.B, OTC- BDRAF). The buying of this stock was part of my early foray into industrial stocks in 1987. Up until 2001, I was making some 35% return per annum on this stock. When the stock first dropped in 2002, I had still made some 28% return per annum on this stock. Even by the lowest point in 2005, I had made some 13% per annum on this stock. By that time, it seemed to be turning itself around, so I never sold. Maybe I should have.

There are two classes of shares. Class A shares are multiple voting shares with 10 votes per Share and Class B shares are Subordinate Voting Shares with one vote per share. The Bombardier controls this company through their Class A shares.

As far as I can see, stock options increased the outstanding shares in 2012 and 2013, but not in 2014. When I look at insider trading, I find no insider buying and minimal insider selling.

The 5 year low, median and high median Price/Earnings per Share Ratio are 9.39, 12.34 and 14.94. They are not much different from the corresponding 10 year values of 9.84, 12.37 and 15.12. The current P/E Ratio is 6.27 based on a stock price of $2.34 and a 2015 EPS estimate of $0.37 CDN$. This stock price test suggests that the stock price is relatively cheap.

I cannot get a fix on the Graham Price. The problem is that when you consider preferred shares are generally in front of common shares when it comes to a break up of a company and there for book value, I think that the book value for common shares is really a negative value currently. This is the same reason I cannot use book value to test the current stock price.

Since the company has cancelled the dividends, I cannot use historical and current dividend yield to test the current stock price.

The 10 year median Price/Cash Flow per Share Ratio is 7.19. The current P/CF Ratio is 3.55 based on 2015 CFPS estimate for 2015 of $0.66 CDN$ and a stock price of $2.34. This P/CF Ratio is some 50% lower than the 10 year median P/CF Ratio. This stock price test suggests that the stock price is relatively cheap. You get a similar results using US$ in this test.

The 10 year median P/S Ratio is 0.39. The current P/S Ratio is 0.16 based on 2014 Revenue per Share estimate of $14.60 CDN$ and a stock price of $2.34. This stock price test suggests that the stock price is relatively cheap. You get a similar results using US$ in this test. Another thing to consider is that a P/S Ratio of 0.39 is a very low ratio.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. The 12 month stock price target is $2.40. This would imply a total return of 2.5%, all capital gains.

The Motley Fool sort of says that Bombardier is a turnaround opportunity. This Financial Post article talks about Bombardier suspending their dividend and trying to raise capital. Another Financial Post article talks about the 5 problems facing Bombardier.

Another recent Motley Fool article suggests that shareholders should take a loss and move on. This may be good advice. This is another Motley Fool article and it says that Bombardier is not telling investors that it may take it 5 years to dig itself out of the hole it has dug for itself.

Sound bite for Twitter and StockTwits is: Stock price cheap for a reason. See my spreadsheet at bbd.htm.

This is the second of two parts. The first part was posted on Monday, February 23, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. The Bombardier family controls 64% of the voting rights under this stock. Its web site is here Bombardier.

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, February 23, 2015

Bombardier Inc.

On my other blog I am today writing about changes I am making to my RRSP and RRIF accounts continue...

I own this stock of Bombardier Inc. (TSX-BBD.B, OTC- BDRAF). The buying of this stock was part of my early foray into industrial stocks in 1987. Up until 2001, I was making some 35% return per annum on this stock. When the stock first dropped in 2002, I had still made some 28% return per annum on this stock. Even by the lowest point in 2005, I had made some 13% per annum on this stock. By that time, it seemed to be turning itself around, so I never sold.

There is more than one way to look at my investment in Bombardier. Over the long term I have made a total return of 11.50% per year with 6.30% from capital gains and 5.20% from dividends. I paid some $0.60 per share for my Bombardier shares. I have received $1.91 per share in dividends. My dividends are some 319% of my original cost. On my original investment I am making a dividend yield of 17.2%.

If I ask the question of what has Bombardier done for me lately, the answer would have to be not much. The stock just recently took a dive because there was an earnings loss for 2014. So far this year the stock is down by almost 44%. It is also not a dividend growth stock. Since restarting dividends in 2009, the dividends have remained flat. They have also recently suspended the dividends again.

The 2014 financial year was not good. The company does have it problems and they are still hoping to turn it around. They had an earnings loss in 2014. No much is happening in Cash Flow which is down by 7.2% per year over the past 5 years and up by 5.3% per year over the past 10 years. These figures are in US$

Revenue is up slightly by 0.6% and 2.7% per year over the past 5 and 10 years in US$. Revenues were up by 10.8% in 2014 but analysts expect little to no increase for 2015.

Sound bite for Twitter and StockTwits is: I still have hope in this company. I may have hope in this company because I have held it for so long. I also see no great urgency to sell it at this point. See my spreadsheet at bbd.htm.

This is the first of two parts. The second part will be posted on Tuesday, February 24, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montreal, Canada, Bombardier has a presence in more than 60 countries. The Bombardier family controls 64% of the voting rights under this stock. Its web site is here Bombardier.

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, February 20, 2015

Emera Inc. 2

I own this stock of Emera Inc. (TSX-EMA, OTC- EMRAF). I found this company in Mike Higgs’ site for Dividend Paying Canadian Growth stocks. In 2005, I want to buy something for my Locked in RRSP. I think that this was an appropriate stock and has good value. I was using up excess cash in my account. I bought more in 2011.

When I look at insider trading, I find $0.1M of insider buying and $6.1M of insider selling with net insider selling at $5.9M. This net insider selling is around 0.1% of the market cap and therefore relatively small.

The outstanding shares were increase by around 260,000 shares in 2014 for stock options. This is 0.2% of outstanding shares and therefore a relatively small amount. These shares had a book value of $7M and at the end of 2014 this number of shares was worth $7.9M.

The 5 year low, median and high Price/Earnings Ratios are 14.28, 16.77 and 20.07. They are quite close to the corresponding 10 year ratios of 14.42, 16.70 and 19.00. The current P/E Ratio is 19.79 based on a stock price of $41.76 and 2015 EPS estimate of $2.11. This stock price testing shows that the stock price is within the reasonable range, but at the top end of this range.

I get a Graham price of $29.80. The 10 year Price/Graham Price Ratios are 0.96, 1.17 and 1.32. The current P/GP Ratio is 1.40 based on a stock price of $41.76. This stock price testing shows that the stock price is relatively expensive.

The 10 year Price/Book Value per Share Ratio is 1.77. The current P/B Ratio is 2.23, a value some 26.4% higher. The current P/B Ratio is based on a BVPS of $18.70 and a stock price of $41.76. This stock price testing shows that the stock price is relatively expensive.

I get 5 year median, historical average and historical median dividend yields of 4.22%, 5.16% and 4.75%. These dividend yields are 9.1%, 25.7% and 19.34% higher than the current dividend yield based on dividend of $1.60 and a current stock price of $41.76.

If I had to choose one dividend yield for testing it would be historical median dividend yield. This stock price testing shows that the stock price is within the reasonable range, but at the top end of this range. What this testing shows is that dividend yield has been relatively high recently.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold. The 12 month stock price consensus is $43.50. This implies a total return of 8% with 4.17% from capital gains and 3.83% from dividends.

Matt Smith of Motley Fool says that now might be the time to buy this stock. Brenda Bouw of the Globe and Mail says that some analysts expect the stock to take a breather after it dramatic run up of the recent months. Joann Alberstat of the Chronicle Herald talks about the recent rise in earnings for Emera.

Sound bite for Twitter and StockTwits is: Basically, stock is relatively expensive. I am pleased with my investment in this stock. However, now may not be the time to invest in this stock. At some point in the future it will again be at least relatively reasonable in price. See my spreadsheet at ema.htm.

This is the second of two parts. The first part was posted on Thursday, February 19, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera.

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, February 19, 2015

Emera Inc.

I own this stock of Emera Inc. (TSX-EMA, OTC- EMRAF). I found this company in Mike Higgs' site for Dividend Paying Canadian Growth stocks. In 2005, I want to buy something for my Locked in RRSP. I think that this was an appropriate stock and has good value. I was using up excess cash in my account. I bought more in 2011.

This stock has a moderate dividend yield and moderate dividend increases. The current dividend yield is 3.68% and the 5 year median dividend yield is 4.22%. The dividends have increased by 7.5% and 5.3% per year over the past 5 and 10 years. The last dividend increase was in 2015 and the increase was for 3.2%. However this latest increase was after a 6.9% increase in quarter three of 2014.

For the stock I bought in 2005, which was 10 years ago I am making a dividend yield on my original purchase price of 8.4%. For the stock I bought in 2011, which was 4 years ago, I am making a dividend yield of 5.5% on my original purchase price.

Another way to look at the dividends is that my adjusted cost basis is $25.95 per share. I have received dividends of $6.41 per share. Therefore dividends have paid almost 25% of the cost of my shares.

Outstanding shares have increased by 5% and 2.8% per year over the past 5 and 10 years. Shares have increased due to stock options, DRIP, Employee Purchase Plan and Share Issues. Because of the increase in shares, you want to look at per share values, like Revenue per Share and Earnings per Share.

Revenue is up by 15.2% and 9.3% per year over the past 5 and 10 years. Revenue per Share is up by 9.8% and 6.3% per year over the past 5 and 10 years. If you just look at revenue it growth is good over the past 5 and 10 years. But if you look at Revenue per Share, the growth is moderate to good.

Growth in EPS is good over the past 5 and 10 years at 13.2% and 9.3% per year. CFPS is moderate to good with growth at 11.5% and 6.4% per year over the past 5 and 10 years.

The Liquidity Ratio is generally low and they generally need to use cash flow to cover current liabilities. The current Liquidity Ratio at 1.27 is better than the 5 year median of 1.13. When you add in cash flow after dividends the ratio goes to 1.75. There is a portion of current long term debt in with the current liabilities. If you exclude that the Liquidity Ratio is 1.39. If you add in cash flow after dividends, the ratio is 1.91.

The Debt Ratio has varied over time. Currently it is quite good at 1.97. However, the 5 year median is a bit low at 1.43. The Leverage and Debt/Equity Ratios are high at 5.23 and 2.65. However, these ratios are not abnormal for a Utility stock.

The Return on Equity has been below 10% twice in the past 10 years and no times in the past 5 years. The ROE for 2014 was 21.6% and the 5 year median is 13.3%. The ROE on Comprehensive Income has been higher and lower than the ROE on Net Income. In 2014 the ROE on Comprehensive Income was even higher than that on Net Income and was 25.8%. However, the 5 year median ROE on Comprehensive Income at 13.1% is close to the 5 year median of the ROE on Net Income. So overall, the ROE on Net Income and Comprehensive Income are close so this is good.

Sound bite for Twitter and StockTwits is: Dividend Growth Utility Stock. Initially after my first purchase the stock just went down. However, I have done well to date on this stock with total returns of $14.14% and with 9.81% per year from capital gains and 4.33% per year from dividends. See my spreadsheet at ema.htm.

This is the first of two parts. The second part will be posted on Friday, February 20, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is here Emera.

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, February 18, 2015

Absolute Software Corporation 2

On my other blog I am today writing about dividend increases continue...

I do not own this stock of Absolute Software Corporation (TSX-ABT, OTC-ALSWF). The Motley Fool published an article by Matt DiLallo in December 2014 called The 10 Best Stocks in Canada. It is basically a list of the best-performing Canadian stocks of the past decade. I wrote an article about these stocks .

When I look at insider trading I find no insider buying and insider selling at $1.7M. This is a relatively small amount as it is 0.42% of the stock's market cap. There is some insider ownership with a director owing shares worth $18.4M or 6.1% of the outstanding shares and another director owning shares worth around $3.9M and 1.3% of the outstanding shares.

I get current Price/Earnings per Share Ratio of 58.48 based on a stock price of $9.43 and 2015 EPS estimate of $.16. There is nothing to really measure this against. The earnings just became positive in 2013. The median positive P/E Ratio is 102.76. The median in 2013 was 131.28 and the median in 2014 was 74.24.

There is no Graham Price. The problem is that the book value is negative. This leads to the fact that you cannot do a Price/Book Value per Share Ratio test as the book value is negative.

The 4 year Price/Cash Flow per Share Ratio is 13.63. The current P/CF Ratio is 14.08 a value just 3.3% higher which would suggest a relatively reasonable stock price.

The 10 year median Price/Sales Ratio is 3.63. The current P/S Ratio is 3.53 based on a stock price of $9.43 and sales of $118M CDN$. The current one is slightly lower than the 10 year median so suggests that the stock price is relatively reasonable. However, a P/S Ratio of 3.53 is rather high, but not that high for a fast rising tech stock.

When mentioning price, we should also take into consideration the amount of cash a company has if that cash is a good percentage of the stock price. In this case it is. Currently cash is at $40M. The current stock price is $9.43. The cash is at $1.17 per share. So really, if you buy this stock you are really paying some 12.4% less and only $8.26.

There are a number of analysts following this stock. The analysts' recommendations are Strong Buy or Buy. The consensus recommendation would be a Buy. The 12 month stock price is $8.42 a value lower than the current stock price of $9.43.

PI Financial analyst Pardeep Sangha in an article in CanTech says that he thinks that this stock is a Buy. According to Sleek Money TD Securities recently said this stock is a Buy. There is also a News Wire report from the company talking about the second quarter of 2015.

Sound bite for Twitter and StockTwits is: Reasonable stock price with momentum. See my spreadsheet at abt.htm.

All the ratios are rather high but this is because the stock has momentum. There is a problem with comparing current ratio with past ratio to see how reasonable a stock price is. In the case of a fast rising stock, the ratios can get rather high. The ratios could drop really quickly if we get into a correction or bear market. Also note that the stock price hit a high of $19.92 in 2008 and then dropped to a low of $2.77 in 2009.

This is the second of two parts. The first part was posted on Tuesday, February 17, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Absolute Software Corporation is the industry standard in persistent endpoint security and management for computers, laptops, tablets and smartphones. The Company, a leader in device security and management tracking for 20 years, has over 30,000 commercial customers worldwide. Its web site is here Absolute Software.

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, February 17, 2015

Absolute Software Corporation

On my other blog I am today writing about oil continue...

I do not own this stock of Absolute Software Corporation (TSX-ABT, OTC-ALSWF). The Motley Fool published an article by Matt DiLallo in December 2014 called The 10 Best Stocks in Canada. It is basically a list of the best-performing Canadian stocks of the past decade.

I wrote an article about these stocks . Of the stock I had not heard of before, Absolute Software Corporation was the only one I might be interested in. This is because it just started to pay dividends. So I have done a spreadsheet on this stock to get a better look at it.

This company did make a great return over the 10 years prior to the end of 2014. The total return was 39.92% per year with 39.07% from capital gains and 0.96% per year from dividends. This has slowed down somewhat with the 5 and 10 year total returns to the current date at 24.35% and 19.95% per year with 20.58% and 18.14% from capital gains and 2.03% and 0.96% from dividends.

Mine you the return is still great but instead of 2606% increase in the stock price over 10 years to the end of 2014, the increase is at 430% over the past 10 years to date. So growth has slowed down.

What other growth there has been is growth in revenue. Revenue per Share is up by 11.3% and 22.1% over the past 5 and 10 years in US$ and up by 15.7% and 26.2% per year in CDN$. This company just started to report in US$ in 2012. This change was probably made as they sell their products worldwide.

The first year that the company had any positive earnings was in 2013. Earnings were up by 118% from 2013 to 2014 in CDN$. They have just reported the second quarter of 2015 and earnings are up by 47% in CDN$ for the 12 month ending December 2014 compared to the 12 months ending June 2014. (The annual reporting for this company is at the end of June each year.)

If you look strictly at Cash Flow per Share you get growth of 1.5% and 32.8% per year over the past 5 and 10 years. The usual measure of cash flow is cash flow from operations less non-cash working capital and here the cash flow is only positive since 2011 and is up by 40.08% per year over the past 3 years. I generally look at the last type of cash flow only. All these values are in CDN$.

One of the problems with the company is that the Book Value is negative. This means that the liabilities are higher than the assets. The current Debt Ratio is 0.93. The Liquidity Ratio is not great either with a value of 0.97. This means that the current assets cannot cover the current liabilities. However, if you add in cash flow after dividends, the Liquidity Ratio is better at 1.16. (I would rather see it at 1.50.)

However, another interesting thing about this company is the amount of cash it has. Currently cash is at $40M. The current stock price is $9.43. The cash is at $1.17 per share. So really, if you buy this stock you are really paying some 12.4% less and only $8.26. This is just another way at looking at a stock price.

Sound bite for Twitter and StockTwits is: Interesting div paying small cap tech. See my spreadsheet at abt.htm.

This is the first of two parts. The second part will be posted on Wednesday, February 18, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Absolute Software Corporation is the industry standard in persistent endpoint security and management for computers, laptops, tablets and smartphones. The Company, a leader in device security and management tracking for 20 years, has over 30,000 commercial customers worldwide. Its web site is here Absolute Software.

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, February 13, 2015

Manitoba Telecom Services Inc. 2

I own this stock of Manitoba Telecom Services Inc. (TSX-MBT, OTC-MOBAF). In 2006, I was look for something to buy and I wanted a good dividend paying Canadian Stock. TD recommended this stock as a current Buy. I checked the stock out and it looked good. I ended up with some of this stock in my trading, RRSP and Pension Accounts. I have since sold most of this stock.

When I look at insider trading, I find there are none over the past year, no insider buying and no insider selling. There are a lot of stock options and others sorts of options outstanding but not much in insider ownership. The Chairman is rather typical with stock worth around $135,000.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.19, 12.32 and 13.50. The 10 year corresponding P/E Ratios are higher at 13.26, 15.46 and 17.50. The 10 year P/E Ratios are close to the historical ones, so the P/E Ratios are trending down. The current P/E Ratio is 15.35 based on a stock price of $24.56 and 2015 EPS estimate of $1.60. This is higher than the 5 year median high P/E Ratio. This stock price tests suggests that the stock price is relatively reasonable.

I get a Graham Price of $22.02. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.17 and 1.32. The current P/GP Ratio is 1.12 based a stock price of $24.56. This stock price test suggests that the stock price is relatively reasonable.

I get a 10 year Price/Book Value per Share Ratio of 2.13. The current P/B Ratio is 1.82 based on a BVPS of $13.47 and a stock price of $24.56, a value some 14.6% lower. For a stock to be considered cheap, the current P/B Ratio would have to be some 20% lower than the 10 years median value. This stock price test suggests that the stock price is relatively reasonable.

The 5 year median, historical average and historical median dividend yields are 5.41%, 4.75% and 5.27%. These yields are some 27.9%, 45.7% and 31.3% lower than the current dividend yield of 6.92%. This yield is based on a stock price of $24.56 and dividends of $1.70. Even though the dividend yield is way above the average and median values, it is still not near the historical highs. This stock price test suggests that the stock price is relatively reasonable.

If dividend go to $1.00 as is speculated by many analysts, then the dividend yield would be around 4% and that would make it lower than the above yields I am measuring current dividend yield against.

When I look at analysts' recommendations, I find a Strong Buy, lots of Holds and a few Underperform recommendations. The consensus recommendation is a Hold. The 12 month consensus stock price is $26.40. This implies a total return of some 14.4% with 7.49% from capital gains and 6.92% from dividends. However, if dividends are cut as some analysts suggest the total return becomes 11.50% with 7.49% from capital gains and 4.01% from dividends.

Jonathan Ratner in this article for the financial post suggests that a dividend cut to $1.00 would be in the best interest for long term value creation under this company. The dividend cut is expected after the quarter one financial report for 2015. Some analysts are setting a Hold rating on this stock according to Dakota Financial News. This article by Christine Dobby in the Globe and Mail talks about this company getting a new boss.

Sound bite for Twitter and StockTwits is: Reasonable price not good enough for stock in trouble. This is not the worse investment I have ever made. That does not say much for this stock. I would sell, but I do not have much of it left and I cannot currently see anything I would like to replace it with. See my spreadsheet at mbt.htm.

This is the second of two parts. The first part was posted on Thursday, February 12, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom.

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, February 12, 2015

Manitoba Telecom Services Inc.

I own this stock of Manitoba Telecom Services Inc. (TSX-MBT, OTC-MOBAF). In 2006, I was look for something to buy and I wanted a good dividend paying Canadian Stock. TD recommended this stock as a current Buy. I checked the stock out and it looked good. I ended up with some of this stock in my trading, RRSP and Pension Accounts.

In 2010 I was beginning to worry about this stock. I no longer thought that it was a good stock. In the 2009 report, the company said that they cannot guarantee current level of dividends. I got rid of this stock in my Trading and Pension Accounts in 2010. I had a slight loss in my Trading account and a slight gain in my Pension Account for an overall gain of 0.83% (including dividends).

In 2010 dividend were decreased by almost 35%. Some analysts now expect the dividends to be decreased again by around 40%. It is clear that the company cannot afford the dividend it is now paying. The Dividend Payout Ratio for 2014 was 100%. It is expected to be around 106% in 2015. The company also had a profit loss in 2013.

The payout ratio for cash flow is not as bad. The DPR for CFPS was 31.7% in 2014 and is expected to be around 40% in 2015.

The dividend yield is currently quite high at 6.92%. This is not quite as high as it got in 2009, but it is getting close to that. If the dividend is dropped to $1.00 per share the dividend yield would drop to 4.1%.

The stock price hit a high in 2004 and it has been dropping ever since. The total return over the past 5 and 10 years is at 3.38% and 1.96% per year with capital losses of 2.93% and 4.66% per year and dividends at 6.31% and 6.62% per year.

I my color code growth in Revenue, Earnings and Cash Flow. What my spreadsheet shows is mostly red with a bit of blue. The outstanding shares have increased over the past 5 and 10 years by 3.9% and 2.4% per year. This makes the per share growth most important.

Revenue is down by 2.3% and 0.6% per year over the past 5 and 10 years. However, Revenue per Share is down by 5.9% and 1.8% over these periods. EPS is up by 1.6% per year over the past 5 years, but down by 8.8% per year over the past 10 years. Cash Flow per Share is down by 1.9% and 1.2% over the past 5 and 10 years.

It is interesting that using 5 year running averages the EPS is down by 12.4% over the past 5 years. However, this is due to a big earnings loss in 2013.

The Return on Equity has been less than 10% twice in the past 5 years. The ROE for 2014 was 12.5% with a 5 year median also of 12.5%. A problem is that comprehensive income was only 5.2% in 2014. Its 5 year median is also quite low at 7.7%. This is not a promising situation and suggests that the EPS is not as good as they appear.

The Liquidity Ratio is very low at 0.62 and it has always been low with a 5 year median of just 0. 47. For 2014 if you add in cash flow after dividends the Liquidity Ratio is 1.31. However, the 5 year median of this Liquidity Ratio is marginal at 0.99. They depend on cash flow for current liabilities and the ratio is not quite high enough.

The Debt Ratio is fine at 1.64 and it has always been good. It has a 5 year median value of 1.64. The Leverage and Debt/Equity Ratios are a bit high at 2.55 and 1.55. However, I must say that these are rather common for the industry this company is in.

Sound bite for Twitter and StockTwits is: Doing poorly, likely dividend cut. This is my annual review and it shows that this company is not doing well. It is interesting that TD suggests that once the dividend cut is done, the stock price might perk up a bit. I am considering selling the rest of this stock. Currently my total return is running at around 1.3% per year. See my spreadsheet at mbt.htm.

This is the first of two parts. The second part will be posted on Friday, February 13, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is here Manitoba Telecom.

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.