Thursday, December 18, 2014

Mullen Group Ltd. 2

I do not own this stock of Mullen Group Ltd. (TSX-MTL, OTC- MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and has decreased it dividends. The reduction in dividend brought the Dividend Payout Ratios down to a place that would allow for the company to begin growing dividends again.

When I look at insider trading, I find no insider selling and some $154,000 of insider buying. Insider buying is equal to 0.01% of the stock's market cap. There is some insider ownership with the Chairman and Co-CEO owning share worth around 82.6M and the Co-CEO owning shares worth around $13.6M. Between them they own some 3.8% of the company.

The 5 year low, median and high median Price/Earnings Ratios are 12.27, 13.85 and 15.73. The 10 year corresponding ratios are similar at 11.38, 14.06 and 16.54. The current P/E Ratio is 17.73 based on a stock price $21.27 and 2014 EPS estimate of $1.20. This stock price test suggests that the stock price is high.

I get a Graham Price of $16.42. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.09 and 1.33. The current P/GP Ratio is 1.30 based on a stock price of $21.27. This stock price test suggests that the stock price is reasonable but at the top end of the range.

I get a 10 year Price/Book Value per Share Ratio of 1.89. The current P/B Ratio is 2.13 based on a stock price of $21.27 and BVPS of $9.99. The current P/B Ratio is some 12.7% higher than the 10 year median P/B Ratio. This stock price test suggests that the stock price is reasonable but at the higher end of the range.

The current dividend yield is 5.64% and the 5 year median dividend yield at 4.44% is some 27% lower. This stock price test suggests that the stock price is cheap.

The historical average dividend yield is 5.62% a value just 0.4% lower than the current dividend yield of 5.64%. However, the historical median dividend yield is just 3.61% and this yield is lower than the current dividend yield of 5.64% by 56%. Testing of current dividend yield to historical ones, the stock price comes out cheap to reasonable.

When I look at analysts' recommendations I find only Buy and Hold recommendations. There are 4 Buys and 8 Holds, so the consensus would be a Hold. The 12 month stock price consensus is $24.70. This implies a total return of 21.77% with 5.64% from Dividends and 16.13% from capital gains.

The Mullen Group Ltd published their 2015 Business Plan. Dividends for January 2015 will not change. According to The Legacy Raymond James lowered its target price from $25.00 to $22.75, recently. And finally, the Motley Fool asks why Mullen is a screaming buy.

Sound bit for Twitter and StockTwits is: Dividend yield says price is cheap to reasonable. The reason I like using the dividend yield to judge the stock price is because you are not dealing with estimates. See my spreadsheet at mtl.htm.

This is the second of two parts. The first part was posted on Wednesday, December 17, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in Western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen Group.

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, December 17, 2014

Mullen Group Ltd.

On my other blog I am today writing about Dividend Yields continue...

I do not own this stock of Mullen Group Ltd. (TSX-MTL, OTC- MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and has decreased it dividends. The reduction in dividend brought the Dividend Payout Ratios down to a place that would allow for the company to begin growing dividends again.

When they became a corporation 2009, dividends dropped some 72%. Since 2011 they have been raising again. The dividend increases over the past 5 and 10 years are at a negative 5.6% and positive 26%. However, if you look at dividend increases over the past 4 years, dividends are up by 24.5%.

They have recently changed from paying quarterly dividends to again paying monthly dividends. Because of the timing of the dividends it appears that dividends went up 35% in 2013 and down 11% in 2014. However, the dividend increased by 20% in 2013. So far there has been no dividend increases in 2014.

The reason for the original decrease in dividends was to have proper Dividend Payout Ratios. The 5 year median DPR for EPS is at 61% and for CFPS is at 33%. The ones for 2013 were higher at 86% for EPS and 54% for CFPS. They are expected to be at 100% and 47% respectively in 2014 and then dropping to 83% and 41% in 2015.

Shareholders have done well with the 5 and 10 years total return at 10.65% and 8.90% per year. The portion of this total return attributable to dividends is at 5.25% and 6.40% per year. The portion of this total return attributable to capital gain is at 5.40% and 2.50% per year.

Outstanding Shares have increased by 2.4% and 7.3% per year over the past 5 and 10 years. Shares have increased due to Share Issues and Stock Options and have decreased due to Buy Backs. Because of the increase in outstanding shares, if I were a shareholder I would be interested in per shares.

Revenues over the past 5 years have had no to little growth, but there has been moderate to good growth over the past 10 years. The 5 year running averages show moderate growth. There can problems with looking at exact 5 and 10 years growth figures as they may not tell the whole story.

Earnings per Share show the same sort of pattern with little growth over the past 5 years and moderate growth over the past 10 years. However, if you look at 5 year running averages, the 5 and 10 years growth is good.

The growth in cash flow is a bit different. The has been moderate to good growth in cash flow, but for the cash flow per share there is no growth over the past 5 years for 5 years exact figures and 5 year running averages. There is moderate to good growth looking at cash flow and cash flow per share and also at 5 year running averages for cash flow per share for the past 10 years.

Revenue has grown at 1.8% and 13% per year over the past 5 and 10 years. The Revenue per Share is down by 0.6% per year over the past 5 years, but up by 5.3% per year over the past 10 years. If you look at 5 year running averages, Revenue per Share is up by 7.4% and 6.8% per year over the past 5 and 10 years.

The EPS is up by 2.3% and 7.8% per year over the past 5 and 10 years. If you look at 5 year running averages EPS is up by 8.7% and 8.4% per year over these periods.

Cash flow is down by 1.9% and up by 15.7% per year over the past 5 and 10 years. CFPS is down by 4.1% and up by 7.8% over the past 5 and 10 years. If you look at CFPS and 5 year running averages, the cash flow is up by 0.7% and 10.1% per year over the past 5 and 10 years.

The Return on Equity was been below 10% 4 times in the past 10 years and 2 times in the past 5 years. The ROE for 2013 is quite good at 15.9% and it has a 5 year median value of 15.8%. There is no difference between the net income and the comprehensive income and this suggests that the net income is of good quality.

On good thing to remark on for this stock are the very good debt ratios. This company is a service company to the oil and gas industry and good debt ratios help companies survive the bad times. The Liquidity Ratio is 2.79 and the 5 year median is 2.65. The Debt Ratio is 2.31 and the 5 year median is also at 2.31. The Leverage and Debt/Equity Ratios are 1.76 and 0.76 and the 5 year median values are 1.65 and 0.65, respectively.

Sound bit for Twitter and StockTwits is: Oil and Gas Service, Dividend Growth Company. If you do not want to invest in the oil and gas companies, a service company might be worth your while. It gives you some exposure and these sorts of company might be safer bets. See my spreadsheet at mtl.htm.

This is the first of two parts. The second part will be posted on Thursday, December 18, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in Western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen Group.

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, December 16, 2014

FirstService Corp

I do not own this stock of FirstService Corp (TSX-FSV, NASDAQ-FSRV), but I used to. I bought FirstService Corp in 2002. By 2010 the company was underperforming so I sold the stock and kept the preferred shares until the end of the year before selling them too. Preferred shares are not by favorite why of getting dividends.

Interestingly this company started to pay dividends in 2013. Dividends are payable in US$ so dividends will vary with the currency exchange rate. The dividend yield is quite low with the current yield at 0.77% US$. Also there is no sign that the company will increase the dividends. Analysts also do not expect any increase in dividends over the next few years.

The shareholders have done quite well with this stock. The 5 and 10 year total return to date is 24.63% and 9.74% per year. The portion of this total return from capital gains is 23.92% and 9.47% per year. The portion of this total return from dividends is 0.70% and 0.27% per year.

Outstanding shares have grown at 4.1% and 2% per year over the past 5 and 10 years. Revenue is up moderately to good over the past 5 and 10 years. However, Revenue per Share growth is marginal to moderate over these periods. The company puts out an adjusted EPS figure as well as EPS. The Adjusted EPS shows good growth, but since 2013 was a negative EPS year, there is no growth in EPS.

Cash Flow is negative over the past 5 years and good over the past 10 years. Of course, the Cash Flow per share growth figures is worse because of the growth in outstanding Shares.

Revenue is up by 6.6% and 14.4% per year over the past 5 and 10 years. Revenue per Share is up by 2.4% and 12.2% per year over these periods. Adjusted EPS is up by 9.4% and 15.7% per year over the past 5 and 10 years. Cash Flow is down by 1% and up by 10.5% per year over the past 5 and 10 years. CFPS is down by 4.9% and up by 8.4% per year over these periods. All the above is in US$.

There is no Return on Equity for this stock for 2013 as earnings are negative. However, the comprehensive income is lower than the net income.

As far as debt ratios go, the Liquidity Ratio is low as is the Debt Ratios. They are 1.08 and 1.21. I would rather see then at 1.50 or higher. Leverage and Debt/Equity Ratios are rather high at 5.08 and 4.08. When debt ratios are not good, a company can be vulnerable in bad times.

Because of negative EPS, I cannot get 5 year median Price/Earnings per Share values. However, the historical low, median and high median P/E Ratios look viable and these are 11.14, 15.72 and 20.82. The current P/E Ratio is 64.80 based on a stock price of $60.57 and 2014 EPS estimates of $0.81. This stock price test suggests that the stock price is high or expensive.

The 10 year median Price/Book Value per Share Ratio is 5.38. The current P/B Ratio at 8.07 is some 50% higher. This is based on a BVPS of $7.51 and a stock price of $60.57. This stock price test suggests that the stock price is high or expensive.

The 10 year median Price/Cash Flow per Share Ratio is 9.95 and the current P/CF Ratio is 12.62 based on a CFPS estimate for 2014 of $4.80 and a stock price of $60.57. The current P/CF Ratio is some 27% higher than the 10 year median P/CF Ratio. This stock price test suggests that the stock price is high or expensive.

Sound bit for Twitter and StockTwits is: Stock price is currently expensive. See my spreadsheet at fsv.htm.

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.

This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management, and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Its web site is here FirstService 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.

Monday, December 15, 2014

H & R Real Estate Trust 2

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

I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC- HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed.

When I look at insider trading, I find $4.3M of insider selling and $0.7M of insider buying with net insider selling at $3.6M. Net insider selling is at 0.06% of market cap and so is relatively low. There is some insider ownership with the CEO owing shares worth around $72M and a director owning shares worth around $26.5M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.18, 15.21 and 17.50. The current P/E Ratio is 14.38 based on 2014 EPS estimate of $1.46 and a stock price of $21.00. The stock price test suggests that the stock price is reasonable.

The 5 year low median and high median Price/AFFO Ratios are 13.30, 15.21 and 17.03. The current P/AFFO Ratio is 12.73 based on a stock price of $21.00 and 2014 AFFO estimate of $1.65. The stock price test suggests that the stock price is cheap.

I get a Graham Price of $27.76. The 10 year low, median and high median Price/Graham Price Ratios are 0.91, 1.06 and 1.30. The current P/GP Ratio is 0.76. The stock price test suggests that the stock price is cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.55. The current P/B Ratio is 0.90 based on a BVPS value $23.46 and a stock price of $21.00. The current P/B Ratio is some 42% lower than the 10 year P/B Ratio. The stock price test suggests that the stock price is cheap.

I get a 5 year median dividend yield of 5.97% and the current dividend yield of 6.43% is some 7.7% higher. The stock price test suggests that the stock price is reasonable.

On an historical basis the dividend yield has been much higher. The historical high dividend yield is 11.35%, the historical average dividend yield is 7.94% and the historical median dividend yield is 6.68%. These dividend yields are higher than the current dividend yield of 6.43%, although the historical median dividend yield is not far at a value of 4% higher. If you use the historical median dividend yield, stock price test suggests that the stock price is reasonable.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month stock price consensus is $25.40. This implies a total return of 27.38% with 20.95% from capital gains and 6.43% from dividends.

Forbes thinks that this company is in oversold territory according to a recent article. According to Sleek Money Scotiabank has just raised their target price from $24.00 to $24.25. The Digital Journal says that HR had solid results for the third quarter of 2014. An article in the Winnipeg Free Press talks about H & R selling off part of their portfolio to Public Sector Pension Investment Board.

Sound bit for Twitter and StockTwits is: Price is cheap to reasonable. I believe that portfolios should have some Real Estate stock in them. This is a good diversification for any portfolio. What you should expect for real estate stocks, especially REITs is a good dividend yield and increases that are slightly higher than the inflation rate. See my spreadsheet at hr.htm.

This is the second of two parts. The first part was posted on Friday, December 12, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here HR REIT.

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, December 12, 2014

H & R Real Estate Trust

I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC- HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed.

This stock has been a dividend growth stock. However, in 2009 they reduced the dividends in half. The cash flow retained from the reduced distribution was used to finance construction of The Bow, an H&R's development project in Calgary. Since then the dividends have grown at 17% per year, but they are still some 6% lower than the dividend high that occurred in 2008.

This company also did not raise the dividends for 2014. Analysts expect dividends to go up at a minimal amount in both 2015 and 2016. This is basically at the rate of inflation. The dividends are down by 1.3% per year and up by 1% per year over the past 5 and 10 years.

Shareholders have done fine to date, but the 5 year total return is much better than the 10 years total return. The 5 and 10 year total returns are at 12.64% and 7.02% per year, with the distribution portion of this total return at 6.31% and 6.01% per year and the capital gains portion of this total return at 6.33% and 1.01% per year.

The outstanding shares have grown a lot over the years. The 5 and 10 year growth in shares is at 14% and 12% per year. Shares have increased due to Debenture Conversion, DRIP, Share Issues and Stock Options. While there has been good growth in Revenues but there is mediocre to no growth in per share values. For cash flow, there has been moderate to good growth in per share values as well as good growth in Cash Flow. If I was a shareholder of this company, it is the per share values I would be most interested in.

Revenues have grown at 13% per year over the past 5 and 10 years. However, Revenue per Share is down by 0.5% and up by 0.8% per year over these periods. Cash Flow has grown at 25% and 21% per year over the past 5 and 10 years. The Cash Flow per Share has grown at 9.8% and 7.8% per year over the past 5 and 10 years. The stock price hit a low in 2008 with the announcement of the dividend cut. The stock has since recovered.

Since EPS seems to be greatly affected by the change in account to IFRS, it is hard to know what growth in EPS is telling us. However, there are problems in the growth in FFO and AFFO per share values. The FFO per share has grown at 2.7% and 2.3% per year over the past 5 and 10 years. Analysts seem to be transitioning over the AFFO values. The AFFO per share values have declined by 1.5% over the past 5. I can only find AFFO values on this stock going back to 2008

We have several Returns on Equity Ratios that we can do. The ROE on net income is just 5.2% and this has a 5 year median of 5.7%. If you want to base it on FFO or AFFO the ROE becomes 7.5% and 6.1%. None of these are very good. However, based on FFO or AFFO, the ROE is above 10% in 3 of the last 5 years.

The debt ratios are fine. The Liquidity Ratio is quite low at 0.49. When this ratio is below 1.00, it means that the current assets cannot cover the current liabilities. If you add in cash flow after distributions, this ratio is 2.00. The Debt Ratio is good at 1.86 and the Leverage and Debt/Equity Ratios are a little high, but ok at 2.17 and 1.17.

Sound bit for Twitter and StockTwits is: Dividend Growth REIT. I know shareholders have done well with this stock. However, I would like to see better growth in Revenue per Share and AFFO per Share. I know that analysts expect good growth in both these values in 2014. The last quarter did see growth in both of these values, but they do not seem to be growing quite at the rate expected.

A portfolio should have some REITs or Real Estate stock for diversification purposes. REITs do provide good yields for a portfolio. See my spreadsheet at hr.htm.

This is the first of two parts. The second part will be posted on Monday, December 12, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here HR REIT.

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, December 11, 2014

First Capital Realty

I do not own this stock of First Capital Realty (TSX-FCR, OTC- FCRGF). In 2011 a reader asked me to review this real estate stock. Also, the site Canadian Dividend Stock site mentions this company as a top Canadian REIT.

The stock has grown its dividends over the years, but they are inconsistent in their increases and they do not increase the dividend every year. The growth in dividends is at .98% and 1.55% per year over the past 5 and 10 years. The reason that the growth over the past 5 years is low is that there were no increases in dividends between 2009 and 2012.

The last dividend increase is for 2.4% in 2014. If you look at dividend growth over the past 3 years to 2014, the growth in dividends is at 1.84%. For Real Estate stocks you want to dividend growth equal to the rate of inflation. The growth in inflation to 2013 is at 1.61% and 1.75% per year over the past 5 and 10 years. The growth in inflation for the last 3 years to 2014 is 1.56%.

So in the last 3 years the growth in dividends is at the rate of inflation or better. However, the rate of inflation is higher than dividend growth in the past 5 and 10 years. The thing is that a lot of companies have had a hard time with the most recent recession. So for this company to stop increasing dividends is not surprising.

Shareholders have done well over the past 5 and 10 years. The total returns over these periods are at 11.25% and 10.21% per year. The portion of this total return attributable to dividends is at 5.43% and 5.91% per year over these periods. The portion of this total return attributable to capital gains is at 5.82% and 4.31% per year over these periods.

Outstanding shares have increase by 7.7% and 14% per year over the past 5 and 10 years. Shares have increased due to Convertible Debentures, Stock Options and Share Issues. If I were a shareholder per share values would be most important to me because of high rate of increase in shares.

Revenues and Cash Flows have increased very well over the past 5 and 10 years. However, Revenue per Share and Cash Flows per Share growth has been non-existent to mediocre at best. There is a problem in looking at EPS and Net Income because the change in accounting rules in 2011 has had a big effect on these measures.

Revenues have grown at 8.5% and 14.9% per year over the past 5 and 10 years. Revenue per Share is up by 0.8% and 0.8% per year over the past 5 and 10 years. Cash Flow is up by 7.5% and 14.2% per year over the past 5 and 10 years. Cash Flow per Share is down by 0.8% and 3.4% per year over the past 5 and 10 years.

Unfortunately, the growth in Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) has also been non-existent or mediocre. FFO is down by 0.1% and up by 1.8% per year over the past 5 and 10 years. AFFO is up by 1.2% and 1.95 per year over the past 5 and 7 years. AFFO is the newest measure for judging how well REITs are doing, but it has not been used for a long a period at present.

The Liquidity Ratios is really low and even if you add in cash flow after dividends, it is still very low. Liquidity Ratio for 2013 is 0.55 and adding in cash flow after dividends it is 0.65. If this ratio is below 1.00, it means that the current assets cannot cover the current liabilities. It makes a company vulnerable. The other debt ratios are fine.

The 5 year low, median and high median Price/AFFO Ratios are 16.45, 17.77 and 19.09. The current P/AFFO Ratio is 18.52 based on AFFO estimate for 2014 of $0.97 and a stock price of $17.96. This stock price test says that the stock price is relatively reasonable.

I get a 10 year median Price/Book Value per Share Ratio of 1.63. This is based on a BVPS of $16.64 and a stock price of $17.96. The current P/B Ratio 1.08 a value some 34% lower. This stock price test says that the stock price is relatively cheap.

The 5 year median dividend yield is 4.95% a value some 3% higher than the current dividend yield of 4.79% based on a dividend of $0.86 and a stock price of $17.96. This stock price test says that the stock price is relatively reasonable.

The historical dividend yields tell a different story. The historical average dividend yield is 7.03% and the historical median dividend yield is 6.02%. These yields are 51% and 20% higher than the current dividend yields. So on a historical basis, the stock price is relatively expensive.

The analysts' recommendations are Buy and Hold. There are more Hold recommendations than Buy recommendations and the consensus recommendations would be a Hold. The 12 month stock price consensus is $20.40. This implies a total return of 18.37% with 4.79% from dividends and 13.59% from capital gains.

According to Forbes this stock is in oversold territory. This is another way of saying a stock is cheap. The site Markets Wired talks about this company closing a branch in Indiana. There is also a News Wire item talking about a new CEO for 2015.

Sound bit for Twitter and StockTwits is: Dividend growth Real Estate stock, cheap to reasonable price. See my spreadsheet at fcr.htm.

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.

First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centers, located predominantly in growing metropolitan areas. Its web site is here First Capital Realty.

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, December 10, 2014

Finning International Inc. 2

On my other blog I am today writing about Buy Backs continue...

I do not own this stock of Finning International Inc. (TSX-FTT, OTC-FINGF). When I was in the market to buy an industrial stock in this area in 2007, I look at this stock was well as Toromont Industries (TSX-TIH). At the time I liked Toromont better, so that is what I bought.

When I look at insider trading, I find 1.5M of insider buying and 3.8M of insider selling with a net insider selling of $2.3M. On a relative basis this is low as it is only 0.05% of the stock's market cap. There is some insider ownership with Chairman having shares worth around $4.6M, the CEO having shares worth around $0.3M and the CFO having shares worth around $0.4M.

In 2013 outstanding shares worth increased for stock options by 354,000 with a book value of $10.3M. These numbers of shares were worth $9.6M at the end of 2013. The increase in share is reasonable being some 0.21% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.13, 13.17 and 15.20. The 10 year corresponding ratios are higher at 14.14, 18.53 and 21.52. The current P/E Ratio is 12.70 based on a current price of $24.01 and 2014 EPS estimate of 1.89. Also, the P/E Ratio for 2014 is lower at 11.33 based on a current stock price of $24.01 and 2015 EPS estimate of $2.12. All this suggests that the stock price is relatively reasonable.

I get a Graham Price of 22.35. The 10 year low, median and high Price/Graham Price Ratios are 1.18, 1.45 and 1.62. The current P/GP Ratio is 1.07 based on a stock price of $24.01. The stock price test suggests that the stock is relatively cheap.

The 10 year Price/Book Value per Share Ratio is 2.53. The current P/B Ratio is 2.04 a value some 19% lower. This is based on a PBPS of $11.75 and a stock price $24.01. The stock price test suggests that the stock is relatively reasonable. The current P/B Ratio would have to be 20% lower than the 10 year P/B Ratio to be cheap, but the price is certainly getting there.

The 5 year median dividend yield is 2.13% and the current dividend yield at 2.96% is some 39% lower. The current dividend yield is lower than the highest dividend yield in the last 5 years, but it is lower than the median high dividend yield. The stock price test suggests that the stock is at a relatively good price.

The historical average dividend yield is 2.15% and the historical median dividend yield is 1.55%. The current dividend at 2.96% is some 38% and 91% lower than these values. All this suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. The 12 month stock price consensus is $30.60. This implies a total return of 30.40% with 2.96% from dividends and 27.45% from capital gains.

This stock currently has an average recommendation of a Hold from Analysts according to The Legacy. On the other hand, Forbes says that this stock is very oversold. The whole point is to be good stocks when they are cheap. The Rental Equipment Register talks about a new expanded store in Lloydminster, Alberta.

Sound bit for Twitter and StockTwits is: stock price is cheap to reasonable. The best way to invest is to buy good stocks when they are cheap. The second best is when stocks are reasonably prices. I wonder if this stock will recover to meet the 12 month consensus stock price, but if you are in a stock for the longer term what a stock does in just one year does not matter that much. See my spreadsheet at ftt.htm.

This is the second of two parts. The first part was posted on Tuesday, December 09, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

This company sells, rents and provides customer support services for Caterpillar equipment and engines. They cover Canada, UK, Argentina, Bolivia, Chile and Uruguay. Its web site is here Finning.

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, December 9, 2014

Finning International Inc.

On my other blog I am today writing the Globe and Mail investors Site continue...

I do not own this stock of Finning International Inc. (TSX-FTT, OTC-FINGF). When I was in the market to buy an industrial stock in this area in 2007, I look at this stock was well as Toromont Industries (TSX-TIH). At the time I liked Toromont better, so that is what I bought.

This company has raised their dividend every year since 2002. The 5 and 10 year dividend growth is at 6.8% and 12.75% per year. The last dividend increase occurred in 2014 and was for 16.4%. The current dividend is 2.96% based on a dividend of $0.71 and a stock price of $24.01. The 5 year median dividend yield is 2.13%.

Shareholders have only done well over the past 5 years and not so well over the past 10 years. The total return on this stock is at 10.45% and 5.38% per year over the past 5 and 10 years. The dividend portion of this total return is at 2.89% and 2.17% per year over these periods. The capital gains portion of this total return is at 7.56% and 3.21% per year over these periods.

The stock has been dropping lately ever since August when it reached a high of $33.90. So it has fallen some 29% in the last few months and this is why the total return is current down. The total return to the end of 2013 was at 16.54% and 8.08% per year.

Over the past 5 and 10 years outstanding shares have increased 0% and 1% per year. Shares have increased due to Stock Options and Share Issues and have decreased due to Buy Backs. There has been moderate growth in Revenue, good growth in Earnings and moderate to good growth in cash flow over the past 5 and 10 years.

Revenue is up by 2.4% and 6.5% per year over the past 5 and 10 years. Revenue per Share is up by 2.2% and 5.5% per year over the past 5 and 10 years.

The EPS is up by 28.7% and 8.7% per year over the past 5 and 10 years. EPS hit a peak in 2007. They then dropped but have been rising ever since. The growth in EPS using the 5 year running averages come out a lot lower at 3.4% and 6.1% per year mainly because they had a loss year in 2010. The 2010 loss was because of a loss due to discontinued operations.

The cash flow is up by 7.8% and 8.2% per year over the past 5 and 10 years. The cash flow per share has grown at 7.6% and 7.2% per year over the past 5 and 10 years.

The Return on Equity has been below 10% 4 times in the last 10 years and 2 times in the last 5 years. The 2013 ROE is at 18% and the 5 year median ROE is also 18%. The 2013 ROE on comprehensive income is 20.9%. When the ROE on comprehensive income is at or above the ROE on net income, it suggests that the income is of good quality.

The debt ratios tend to be good, especially in the last 5 years. The Liquidity Ratio for 2013 is 2.10 and its 5 year median value is 1.82. The 2013 Debt Ratio is 1.58 and it has a t year median of 1.58. The Leverage Debt/Equity Ratios are a little high but ok at 2.72 and 1.72 for 2013. Their 10 year median values are 2.68 and 1.68.

Sound bit for Twitter and StockTwits is: Dividend Growth Industrial stock. See my spreadsheet at ftt.htm.

This is the first of two parts. The second part will be posted on Wednesday, December 10, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

This company sells, rents and provides customer support services for Caterpillar equipment and engines. They cover Canada, UK, Argentina, Bolivia, Chile and Uruguay. Its web site is here Finning.

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, December 8, 2014

If You Want a Good Computer Repair Shop In Toronto

My computer was making funny noises. All it needed was to be cleaned. I keep my windows open all summer and I live downtown, so I do tend to get a lot of dust in my apartment. I took it to 3P Computer At Danforth at 770 Danforth just east of Pape Subway station.

The guy was very thorough and did a diagnostic test. Everything check out fine. I do not know what I would do if my computer stopped. All my contacts, my calendar, my financial data etc is on the computer. So I am pleased with the results. I took it in this morning and it was ready by 5. Great Service.

My computer is in a repair shop

My computer is in a repair shop today, so I do not think I will be doing any post today.