Is it a good company at a reasonable price? I guess the question is, will this company continue to grow and that is hard to answer. If I was looking to buy this stock, I would find it disconcerting that there is a lot of insiders selling. It would seem it is a good buy if it continues to grow and not a good buy if its growth is finished. Are insiders signaling that growth is stopping? You have to wonder about this. My stock price testing is pointing to a relatively reasonable price.
I do not own this stock of Cargojet Inc (TSX-CJT, OTC-CGJTF). I started to following this stock after reading an article on it. The article said that this airline is not only resilient in the face of this unprecedented socio-economic crisis, but it is also in a spot to thrive, as demand for its overnight shipping services is likely to remain stable amid this pandemic. See article.
Cargojet Inc (CJT) operates a domestic overnight air cargo co-load network between fourteen Canadian cities. The company also provides dedicated aircraft to customers on an Aircraft, Crew, Maintenance, and Insurance (ACMI) basis, operating between points in Canada and the USA. As well, the company operates scheduled international routes for multiple cargo customers between the USA and Bermuda. Small cap with dividends in 1% range.
When I was updating my spreadsheet, I noticed there is a lot of insiders selling. All the officers and directors I follow have either reduced their shares or keep what they had. None that I follow have bought any shares.
If you had invested in this company in December 2013, for $1,011.50 you would have bought 70 shares at $14.45 per share. In December 2023, after 10 years you would have received $593.50 in dividends. The stock would be worth $8,341.90. Your total return would have been $8,935.40. This would be a total return of 25.90% per year with 23.49% from capital gain and 2.42% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $14.45 | $1,011.50 | 70 | 10 | $593.50 | $8,341.90 | $8,935.40 |
The current dividend yield is low with dividend growth low. The current dividend yield is low (below 2%) at 1.12%. The 5 and 10 year median dividend yields are also low at 0.85% and 1.11%. The historical median dividend yield is moderate (2% to 4% range) at 2.88%. The dividend growth is low (below 8% per year) at 6.7% per year over the past 5 years. The last dividend increase was in 2024 and it was for 11.25%.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is fine at 53% with 5 year coverage is good at 30%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is fine at 56% with 5 year coverage is good at 39%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 7% with 5 year coverage at 6%. The DPR for 2023 for Free Cash Flow (FCF) is good at 10% with 5 year coverage is negative.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 52.72% | 29.91% |
| AEPS | 55.53% | 39.10% |
| CFPS | 6.93% | 6.36% |
| FCF | 9.97% | -24.54% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.34 and currently at 0.23. The Liquidity Ratio for 2023 is fine at 1.49 and too low at 0.59 currently. If you added in Cash Flow after dividends, the ratios are fine at 2.42 and currently at 1.88. The Debt Ratio for 2023 is good at 1.63 and 1.61 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.60 and 1.60 and currently at 2.63 and 1.63.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.34 | 0.23 |
| Intang/GW | 0.03 | 0.02 |
| Liquidity | 1.49 | 0.59 |
| Liq. + CF | 2.42 | 1.88 |
| Debt Ratio | 1.63 | 1.61 |
| Leverage | 2.60 | 2.63 |
| D/E Ratio | 1.60 | 1.63 |
The Total Return per year is shown below for years of 5 to 18 to the end of 2023. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 6.67% | 12.15% | 10.98% | 1.17% |
| 2013 | 10 | 6.73% | 25.90% | 23.49% | 2.42% |
| 2008 | 15 | 0.82% | 38.20% | 29.85% | 8.35% |
| 2005 | 18 | 2.30% | 18.73% | 15.02% | 3.71% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.02, 14.87 and 23.28. The corresponding 10 year ratios are 16.64, 20.60 and 26.83. The corresponding historical ratios are 12.18, 14.87 and 18.92. The current P/E Ratio is 33.81 based on a stock price of $124.99 and EPS estimate for 2024 of $3.70. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 16.09, 21.72 and 36.53. The corresponding 10 year ratios are 129.18, 24.02 and 33.46. The current P/AEPS Ratio is 27.78 based on a stock price of $124.99 and AEPS estimate of $4.50. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $66.54. The 10-year low, median, and high median Price/Graham Price Ratios are 2.33, 2.96 and 3.71. The current P/GP Ratio is 1.88 based on a stock price of $124.99. The current ratio is below the low ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 4.31. The current P/B Ratio is 2.86 based on a Book Value of $706M, Book Value per Share of 43.73 and a stock price of 124.99. The current ratio is 34% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2024 of $43.30. This implies a Book Value of $699M and a ratio of 2.89 based on a stock price of $124.99. This ratio is 33% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.60. The current P/CF Ratio is 6.06 based on a stock price of $124.99, Cash Flow per Share estimate for 2024 of $20.63 and Cash Flow of $333M. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 2.88%. The current dividend yield is 1.12% based on dividends of $1.294 and a stock price of $124.99. The current dividend yield is 61% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 1.11%. The current dividend yield is 1.12% based on dividends of $1.294 and a stock price of $124.99. The current dividend yield is 1% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 2.09. The current P/S Ratio is 2.07 based on Revenue estimate for 2024 of $977M, Revenue per Share of $60.47 and a stock price of $124.99. The current ratio s is 1.3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable. The 10 year median dividend yield is pointing to a reasonable price. This is confirmed by the P/S Ratio test. Other tests vary from cheap to expensive, but more say cheap than expensive.
When I look at analysts’ recommendations, I find Strong Buy (6), Buy (3) and Hold (2). The consensus would be a Strong Buy. The 12 months stock price consensus is $162.27 with a high of $189.00 and low of $120.00. The consensus stock price of $162.27 implies a total return of 30.95% with 29.83% from capital gains and 1.12% from dividends based on a current price of $124.99.
On Stock Chase there are various opinions about this stock. Some say Buy and some Do Not Buy. Some thought the company was very volatile and that growth has stopped. Others though it was currently a good Buy. Stock Chase gives this stock 4 stars out of 5. Amy Legate-Wolfe on Motley Fool thinks this stock is a long term growth gem. Daniel Da Costa on Motley Fool says this is a growth stock being sold ultra-cheaply. The company put out a press release via Newswire about their fourth quarter of 2023. The company put out a press release on Newswire about their second quarter results for 2024.
Simply Wall Street via Yahoo Finance put out a report on this stock saying that the stock’s fair value is $121.10 CDN$. Simply Wall Street gives this stock 2 and one half stars out of 5. Simply Wall Street has two warnings out on this stock of interest payments are not well covered by earnings; and significant insider selling over the past 3 months.
Cargojet Inc operates a domestic air cargo co-load network between major Canadian cities. The company provides dedicated aircraft to customers on an Aircraft, Crew, Maintenance, and Insurance basis, operating between points in Canada, USA, Mexico, and Europe. The company also operates scheduled international routes for multiple cargo customers between the USA and Bermuda, between Canada, UK, and Germany, and between Canada and Mexico. Its web site is here Cargojet Inc.
The last stock I wrote about was about was SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) ... learn more. The next stock I will write about will be Accord Financial Corp (TSX-ACD, OTC-ACCFF) ... learn more on Monday, September 9, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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 site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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