I do not own this stock of IBI Group Inc (TSX-IBG, OTC-IBIBF). I have had this stock on my list to investigate for some time before I finally did in 2011. What finally prompted me set up a spreadsheet on this stock was an investment report I read in March of 2011.
When I was updating my spreadsheet, I noticed that the debt ratio is still quite low at just 1.13, but they have been making progress. The Debt Ratio was below 1.00 between 2013 and 2014. When this ratio is below 1.00 it means that assets cannot cover liabilities. A good ratio is 1.50 and above. Insiders are still buying.
They started to pay dividends after listing on the stock market in 2004. However, dividends were cancelled in 2013 after earning losses in 2012. They had been paying dividends monthly and but increases were irregular. They have had positive earnings from 2015, but have not talked about resuming dividends. It would be a big positive when and if they do.
The Long Term Debt/Market Cap Ratio for 2017 is 0.25 but it rises to 0.53 in the third quarter. This mostly has to do with the drop in stock price. In any event a ratio is 0.53 is a good one because any ratio under 1.00 is good. The Liquidity Ratio for 2017 is 2.24 with a current one at 2.26 and 5 year median at 2.00. This is an important ratio and this company has a good ratio here as a good ratio is 1.50 and above.
The Debt Ratio is weak at just 1.13, rising to 1.16 current. The 5 year median is 0.94 because of past problems with seem to have been fixed. A good ratio is 1.50 and above. The Leverage and Debt/Equity Ratios for 2017 are very high and this is a problem. However, they have been coming lower and better over the past few years as the company recovers. The ones for 2017 are 8.84 and 7.84 with the current ones at 7.10 and 6.10. They probably need to be less than 2.50 and 1.50 respectively to be reasonable.
The Total Return per year is show below for years of 5 to 13. 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 charts below.
Without dividends, people having this stock since inception, 13 years ago, would not have made any money. The stock fell on hard times between 2012 and 2014 inclusive and had earnings losses. This is the reason for low to nil returns until recently.
|Years||Div. Gth||Tot Ret||Cap Gain||Div.|
The 5 year low, median, and high median Price/Earnings per Share Ratios are 3.24, 4.84 and 6.44. The corresponding 10 year ratios are 8.57, 11.86 and 15.14. The corresponding historical ratios are 6.73, 10.04 and 13.88. The current P/E Ratio is 9.20 based on current stock price of $4.51 and 2018 EPS $0.49. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $2.99. The 10 year low, median, and high median Price/Graham Price Ratios are 0.75, 1.03 and 1.34. The current P/GP Ratio is 1.51 based on a stock price of $4.51. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share Ratio of 1.35. The current P/B Ratio is 5.57 based on Book Value of $25.27, Book Value per Share of $0.81 and a stock price of $4.51. This stock price testing suggests that the stock price is relatively expensive.
I cannot do a dividend yield test as this stock has cancelled its dividends.
The 10 year median Price/Sales (Revenue) Ratio is 0.53. The current P/S Ratio is 0.39 based on 2018 Revenue estimate of $362, Revenue per Share of $11.59 and a stock price of $4.51. The current ratio is some 26% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
The P/S Ratios may be the best one. This ratio test is mostly always a good one. You need sales in order to make a profit and you need growing sales to have growing profits. The third quarterly results support increasing sales and earnings. They had recent trouble with earning losses so the Book Value is low. However, it has improved over the past two years. This is a good sign. The Graham Price considers both Book Value and Earnings and because book value is so low is why the Graham Price is low.
I do not always like the P/E Ratio test, but a P/E Ratio of 9.20 is a low one. These ratios show a lot a volatility and it is because of both earnings and price volatility over the past 5, 10 and historical periods. The most recent ones can be disregarded as they are extremely low due to earning losses.
When I look at analysts’ recommendations, I find Buy (4) recommendations. The 12 month stock price is $7.63. This implies a total return of 69.18% all of capital gains.
Wade Goff of Simply Wall Street thinks this stock is fairly value and therefore it is not the time to buy. Yahoo Finance reposts an Simply Wall Street article about high Beta of this company. Alexis Guardo on Simply Wall Street say the company’s high ROE is not so impressive when you consider it also high debt to equity ratio. See what analysts are saying on Stock Chase. They mostly like this company.
IBI Group Inc is a Canada based engineering services provider. The company plans, designs, implements, as well as offer other consulting services and software development for its intelligence, buildings, and infrastructure business streams. Its web site is here IBI Group Inc.
The last stock I wrote about was about was HLS Therapeutics Inc. (TSX-HLS, OTC-HLTRF) ... learn more. The next stock I will write about will be PFB Corp. (TSX-PFB, OTC-PFBOF) ... learn more on Wednesday, November 21, 2018 around 5 pm. Tomorrow on my other blog I will write about Money Show 2018 - Panel.... learn more on Tuesday, November 20, 2018 around 5 pm.
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