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 bought this stock (TSX-SNC) in December 1998 and first talked about it on May 24, 2008. It has been a great stock for me, but since it is over 5% of my portfolio and I have concerns about it, today I decided to sell a third of the stock I own. I know that a lot of people still have a buy rating on this stock, but I still find the ratio of book value to price a concern. At the end of 2007, the stock price/book value ratio was almost 8. That is the stock was trading at 8 times book value. This has not changed.
By selling of part of my stock, I lock in the value I have earned on it and lower my exposure.
When I bought this stock, it was more a value type stock than today. At that time, the yield was just over 2%, and now the yield is under 1%. In 1998, the stock was trading at 1.4 times book value, a long distance from the over 8 times book value of today. When I bought this stock, the P/E was at 10, which is also a long way from the 35 it is today. This stock used to have the characteristics of both a value stock and a growth stock, but it seems to have only growth stock characteristics today.
So, even though I have done well by this stock, I think this it is wise to sell some of it.
See my spreadsheet at http://www.spbrunner.com/stocks/snc.htm. See my website at http://www.spbrunner.com/stocks.html.
This company is involved with engineering and construction work around the world, this includes infrastructure and buildings; infrastructure and construction; power (nuclear, thermal, hydro etc); chemicals and petroleum; environmental projects; and mining and metallurgy projects. They have offices and Canada and around the world, from Algeria to Vietnam, including Australia, Europe, Russia, Africa, Middle East, Asia, South America, USA. Its web site is www.snc-lavalin.com.
Monday, June 30, 2008
Friday, June 27, 2008
Canadian Pacific Railway Ltd
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.
This is a stock (TSX-CP) that has made me some money this year. Even with today’s prices, the stock increase and dividend since the beginning of the year has produced at return of almost 6%. Not great, but when you consider what other stocks have done, not bad.
All my figures are based on the 5 years ending 2007. What I like about this stock is that, to the end of 2007, the Earnings per Share (EPS) grow nicely at 14% a year. Dividends are increasing well at 12% a year. The closing price has increased at the rate of 16.6% per year. The liquidity of current assets/current liability is low at only .87, but the liquidity of assets/liability is at a not bad 1.57. I like to see both figures at, at least 1.50. The book value (or shareholder’s value) is increasing at a not bad rate of 10.7% a year.
The negatives for this stock are that the revenues are only increasing at 5% a year, but the operation profit margin (OPM) is increasing. The OPM is cash flow/ revenue and when it increases, it means that the company is more efficient. Another negative is that that Accrual Ratio is at 16% and this is quite high. If you look around the internet, you will find that most people have a Hold rating on this stock. This is because everyone expects the EPS to be down in 2008 from 2007. The dividend has already increased this year from $.90 a share to $.99 a share, a 10% increase and the yield is a higher than normal 1.5% (it has in the past varied from 1.2% to 1.4% so this is higher than normal).
I have very little of this stock. I currently will be buying no more. It is hitting a rough patch and it is hard to say how long this will last, as it is partly dependent on the US economy and no one knows when that will recover.
See my spreadsheet at http://www.spbrunner.com/stocks/cp.htm. See my website at http://www.spbrunner.com/stocks.html.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. northeast and midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is www.cpr.ca.
This is a stock (TSX-CP) that has made me some money this year. Even with today’s prices, the stock increase and dividend since the beginning of the year has produced at return of almost 6%. Not great, but when you consider what other stocks have done, not bad.
All my figures are based on the 5 years ending 2007. What I like about this stock is that, to the end of 2007, the Earnings per Share (EPS) grow nicely at 14% a year. Dividends are increasing well at 12% a year. The closing price has increased at the rate of 16.6% per year. The liquidity of current assets/current liability is low at only .87, but the liquidity of assets/liability is at a not bad 1.57. I like to see both figures at, at least 1.50. The book value (or shareholder’s value) is increasing at a not bad rate of 10.7% a year.
The negatives for this stock are that the revenues are only increasing at 5% a year, but the operation profit margin (OPM) is increasing. The OPM is cash flow/ revenue and when it increases, it means that the company is more efficient. Another negative is that that Accrual Ratio is at 16% and this is quite high. If you look around the internet, you will find that most people have a Hold rating on this stock. This is because everyone expects the EPS to be down in 2008 from 2007. The dividend has already increased this year from $.90 a share to $.99 a share, a 10% increase and the yield is a higher than normal 1.5% (it has in the past varied from 1.2% to 1.4% so this is higher than normal).
I have very little of this stock. I currently will be buying no more. It is hitting a rough patch and it is hard to say how long this will last, as it is partly dependent on the US economy and no one knows when that will recover.
See my spreadsheet at http://www.spbrunner.com/stocks/cp.htm. See my website at http://www.spbrunner.com/stocks.html.
This company is a transcontinental railway operating in Canada and the U.S. Its rail network serves the principal centers of Canada, from Montreal to Vancouver and the U.S. northeast and midwest regions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Solutions provides logistics and supply chain expertise. Its web site is www.cpr.ca.
Thursday, June 26, 2008
Metro Inc Spreadsheet
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.
As I mentioned yesterday, this stock has done badly in June. However, I am not going to sell this just over the latest dive. The whole market has been doing badly this summer. I cannot see much happening until the fall.
Since I am not willing to invest in mining or oil on the TSX, to diversify, I have bought into stocks in the Consumer Staples Index. Other than stocks in this index, I have financials, Real Estate, and Utilities. I also have the odd technical stock. This stock is under the Consumer Staples Index. This index has done much worse than the TSX over the last year and also over the last 5 years. At present, this index is back to where it was 5 years ago and this is because of the recent dive in this index.
Now on to what I like about this stock. It is growing its revenue nicely at some 15.6% annually over the last 5 years. The Earnings Per Share (EPS) growth is almost 11% annually over the last 5 years. It is not as good as the revenue growth, but not bad. I very much like the dividend growth of 16% per year over the last 5 years. This stock price grew, to the end of 2007, at the rate of 15% annually over the last 5 years. However, the stock price has come down since then about 30%. We are at present in a bear market and I expect this will improve when the market improves. Note that the Graham price, at the end of 2007 was $30 and this is higher than the current price.
The liquidity re Assets/Liability is fine at 1.8, while the liquidity re current Assets/current liability is low at .99. However, this is not unusual for a merchandising stock. The Accrual ratio at 1.9% is ok. The Return On Equity (ROE) is not bad at 15%, but has been coming down recently. There is good growth in the book value at some 21% annually over the last 5 years.
The problem with this stock is that is growth has slowed. The revenue did not grow for 2007 and it is expected that the EPS will not grow in 2008. However, the dividend has already been increased by 11% for 2008. I think that this stock will be fine for the long term. In the short term, it will probably not do to well. Since I am in for the long term, I intend to keep this stock for now.
See my spreadsheet at http://www.spbrunner.com/stocks/mru.htm. See my website at http://www.spbrunner.com/stocks.html.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is www.metro.ca.
As I mentioned yesterday, this stock has done badly in June. However, I am not going to sell this just over the latest dive. The whole market has been doing badly this summer. I cannot see much happening until the fall.
Since I am not willing to invest in mining or oil on the TSX, to diversify, I have bought into stocks in the Consumer Staples Index. Other than stocks in this index, I have financials, Real Estate, and Utilities. I also have the odd technical stock. This stock is under the Consumer Staples Index. This index has done much worse than the TSX over the last year and also over the last 5 years. At present, this index is back to where it was 5 years ago and this is because of the recent dive in this index.
Now on to what I like about this stock. It is growing its revenue nicely at some 15.6% annually over the last 5 years. The Earnings Per Share (EPS) growth is almost 11% annually over the last 5 years. It is not as good as the revenue growth, but not bad. I very much like the dividend growth of 16% per year over the last 5 years. This stock price grew, to the end of 2007, at the rate of 15% annually over the last 5 years. However, the stock price has come down since then about 30%. We are at present in a bear market and I expect this will improve when the market improves. Note that the Graham price, at the end of 2007 was $30 and this is higher than the current price.
The liquidity re Assets/Liability is fine at 1.8, while the liquidity re current Assets/current liability is low at .99. However, this is not unusual for a merchandising stock. The Accrual ratio at 1.9% is ok. The Return On Equity (ROE) is not bad at 15%, but has been coming down recently. There is good growth in the book value at some 21% annually over the last 5 years.
The problem with this stock is that is growth has slowed. The revenue did not grow for 2007 and it is expected that the EPS will not grow in 2008. However, the dividend has already been increased by 11% for 2008. I think that this stock will be fine for the long term. In the short term, it will probably not do to well. Since I am in for the long term, I intend to keep this stock for now.
See my spreadsheet at http://www.spbrunner.com/stocks/mru.htm. See my website at http://www.spbrunner.com/stocks.html.
Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is www.metro.ca.
Wednesday, June 25, 2008
Metro Inc
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
It is taking longer than I thought to get spreadsheets ready for posting. I first have to decide what stock to review. Next, I have to get the spreadsheet into shape to post. Lastly, I have to write a blog entry on the stock. This all takes time, and longer than I had originally thought it would.
This stock is on both the S&P/TSX Canadian Dividend Aristocrats list (see http://www.dividendsmatter.com/constituents-of-sptsx-canadian-dividend-aristocrats/2007/11/26/ ) and the Dividend Achievers by Mergent’s at http://www.dividendachievers.com/. It is considered a dividend paying growth stock. Over the last 5 years, the dividends have increased at the rate of over 16% per year. In my RRSP account, my first dividend in 2002 was $44 per quarter. My dividends are now $200 per quarter.
I first purchased this stock in December 2001. It is almost 5% of my portfolio (over more than one account), so I will not be purchasing any more. It has had its ups and downs. Until the end of 2007, I was making a 10% annual return on this stock. Until the end of May 2008, I was making money on this stock this year. To today, because the recent drop, my return has dropped to a 7.5% annual return. But, we are only half way through the year, and at this point, it is hard to judge where the market is going.
This stock has fallen badly in June. Over the last year, it has not done as well as the TSX Composite or the TSX Consumer Staples indexes. Everyone seems to have a Hold rating on this stock. It has had some problems over the last year in competing with other stores, and it may well have problems competing with Wal-Mart. It is not expected to earn more EPS (earnings per share) this year than last. I will put up my spreadsheet tomorrow.
It is taking longer than I thought to get spreadsheets ready for posting. I first have to decide what stock to review. Next, I have to get the spreadsheet into shape to post. Lastly, I have to write a blog entry on the stock. This all takes time, and longer than I had originally thought it would.
This stock is on both the S&P/TSX Canadian Dividend Aristocrats list (see http://www.dividendsmatter.com/constituents-of-sptsx-canadian-dividend-aristocrats/2007/11/26/ ) and the Dividend Achievers by Mergent’s at http://www.dividendachievers.com/. It is considered a dividend paying growth stock. Over the last 5 years, the dividends have increased at the rate of over 16% per year. In my RRSP account, my first dividend in 2002 was $44 per quarter. My dividends are now $200 per quarter.
I first purchased this stock in December 2001. It is almost 5% of my portfolio (over more than one account), so I will not be purchasing any more. It has had its ups and downs. Until the end of 2007, I was making a 10% annual return on this stock. Until the end of May 2008, I was making money on this stock this year. To today, because the recent drop, my return has dropped to a 7.5% annual return. But, we are only half way through the year, and at this point, it is hard to judge where the market is going.
This stock has fallen badly in June. Over the last year, it has not done as well as the TSX Composite or the TSX Consumer Staples indexes. Everyone seems to have a Hold rating on this stock. It has had some problems over the last year in competing with other stores, and it may well have problems competing with Wal-Mart. It is not expected to earn more EPS (earnings per share) this year than last. I will put up my spreadsheet tomorrow.
Tuesday, June 24, 2008
MI Development Spreadsheet
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
This stock has great value as the book value is high and the Graham price is greater than the actual price. The Graham price is from Benjamin Graham and is the price you should be paying for a value-type stock investment. The cash flow is also good and it is supporting a not bad increase in the dividend payment.
However, it seems to have no growth-type qualities. It is not only the revenue growth, which is low, but also the Return on Equity (ROE) value. In 2007, the ROE was 2.3%. The last 4 year average is .8%. For Canadians, the average annual rate of return is low. It is much better in US$. This has to do with the relative value of Canadian and US currency over the last few years.
This company was only separated from Magna International in 2003, so it is hard to get a fix on how well it will do. Also, there is a reorganization proposal that is supposed to release some of the value stored in this stock to the current policyholders. This might be a good idea.
For the moment, I am going to continue to hold this stock and review my position on it after the meeting to be held near the end July.
See my spreadsheet at http://www.spbrunner.com/stocks/mim.htm. See my website at http://www.spbrunner.com/stocks.html.
This is a real estate company that currently leases, manages and develops a predominantly industrial rental portfolio. Almost all of its income-producing properties are leased to Magna and its subsidiaries. It also holds 53% equity and 95% voting interest in Magna Entertainment Corp (MEC.A). Its site is at www.midevelopments.com.
This stock has great value as the book value is high and the Graham price is greater than the actual price. The Graham price is from Benjamin Graham and is the price you should be paying for a value-type stock investment. The cash flow is also good and it is supporting a not bad increase in the dividend payment.
However, it seems to have no growth-type qualities. It is not only the revenue growth, which is low, but also the Return on Equity (ROE) value. In 2007, the ROE was 2.3%. The last 4 year average is .8%. For Canadians, the average annual rate of return is low. It is much better in US$. This has to do with the relative value of Canadian and US currency over the last few years.
This company was only separated from Magna International in 2003, so it is hard to get a fix on how well it will do. Also, there is a reorganization proposal that is supposed to release some of the value stored in this stock to the current policyholders. This might be a good idea.
For the moment, I am going to continue to hold this stock and review my position on it after the meeting to be held near the end July.
See my spreadsheet at http://www.spbrunner.com/stocks/mim.htm. See my website at http://www.spbrunner.com/stocks.html.
This is a real estate company that currently leases, manages and develops a predominantly industrial rental portfolio. Almost all of its income-producing properties are leased to Magna and its subsidiaries. It also holds 53% equity and 95% voting interest in Magna Entertainment Corp (MEC.A). Its site is at www.midevelopments.com.
Monday, June 23, 2008
MI Development
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 am starting to take a look at the stock I have in my RRSP account. I will look at both stocks that have lost money this year and ones that have made money. This first one is MI Development and it has lost money for me this year.
I bought a small stake in this company. I do this to track a company and to decide if I want to buy more of its stock. It is a Real Estate stock and TD had an Action Buy Call on it when I bought. The stock was doing well until about the end of 2007. According to Quicken, this stock has lost some 14% of its value since then. If charted against TSX capped Real Estate index and the TSX, it has done worse than both these indexes.
First, what I find good about this stock. The Cash Flow is good. Also, the book value is quite high. Because of this, the Graham price is above the stock price. At the end of 2007, the Graham price was $32.20 and the stock price was $27.87. This company is making money and the dividend has increased, on average 10.5% per year over the last 5 years. However, this is not a smooth increase, as dividend is not increased every year, but the dividend increases are large when they are made.
Tomorrow I will put up the spreadsheet.
I am starting to take a look at the stock I have in my RRSP account. I will look at both stocks that have lost money this year and ones that have made money. This first one is MI Development and it has lost money for me this year.
I bought a small stake in this company. I do this to track a company and to decide if I want to buy more of its stock. It is a Real Estate stock and TD had an Action Buy Call on it when I bought. The stock was doing well until about the end of 2007. According to Quicken, this stock has lost some 14% of its value since then. If charted against TSX capped Real Estate index and the TSX, it has done worse than both these indexes.
First, what I find good about this stock. The Cash Flow is good. Also, the book value is quite high. Because of this, the Graham price is above the stock price. At the end of 2007, the Graham price was $32.20 and the stock price was $27.87. This company is making money and the dividend has increased, on average 10.5% per year over the last 5 years. However, this is not a smooth increase, as dividend is not increased every year, but the dividend increases are large when they are made.
Tomorrow I will put up the spreadsheet.
Friday, June 20, 2008
TMX 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.
This stock has a recent name change from TSX Group to TMX Group. This was done when it took over the Montreal Exchange. I had looked at this stock after I found it on a list of Strongest Dividend Growth stocks. I am interested in such stocks.
This stock has strong revenue and earnings (EPS) growth. Dividend Growth has been great, as it has increased by 44% per year over the last 4 years. This stock has great growth as the stock price has increased some 41% per year over the last 5 years. It also has great cash flow growth. The Accrual Ratio is not bad at a little under -5%.
There are a number of reasons why I do not like this stock. The dividend growth has been at twice the rate of the earnings growth. In 2007, the payout rate was 70%. This is a little high. The Graham price was, for 2007, $11.25 and the closing price for this stock was $52.80. This is quite a spread. The problem is that the Book Value is declining, not increasing. The Book Value has come down a lot since the IPO. The debt level against the assets is not bad at an Asset/Debt ratio of 1.44, but the leverage ratio (Assets/Book Value) is rather high at 8.8.
I know that a number of places have a buy rating on this stock, but I think I will give it a pass.
See my spreadsheet at http://www.spbrunner.com/stocks/x.htm. See my website at http://www.spbrunner.com/stocks.html.
This company operates three national stock exchanges, the Toronto Stock Exchange (TSX), the TSX Venture Exchange, and the Montreal Exchange (MXX). Toronto Stock Exchange serves the senior equity market. The Montreal Exchange is for Derivative Contracts and Options. The TSX Venture Exchange serves the public venture equity market, Natural Gas Exchange (NGX), a North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, a fixed income inter-dealer broker. Its site is at www.tsx.com
This stock has a recent name change from TSX Group to TMX Group. This was done when it took over the Montreal Exchange. I had looked at this stock after I found it on a list of Strongest Dividend Growth stocks. I am interested in such stocks.
This stock has strong revenue and earnings (EPS) growth. Dividend Growth has been great, as it has increased by 44% per year over the last 4 years. This stock has great growth as the stock price has increased some 41% per year over the last 5 years. It also has great cash flow growth. The Accrual Ratio is not bad at a little under -5%.
There are a number of reasons why I do not like this stock. The dividend growth has been at twice the rate of the earnings growth. In 2007, the payout rate was 70%. This is a little high. The Graham price was, for 2007, $11.25 and the closing price for this stock was $52.80. This is quite a spread. The problem is that the Book Value is declining, not increasing. The Book Value has come down a lot since the IPO. The debt level against the assets is not bad at an Asset/Debt ratio of 1.44, but the leverage ratio (Assets/Book Value) is rather high at 8.8.
I know that a number of places have a buy rating on this stock, but I think I will give it a pass.
See my spreadsheet at http://www.spbrunner.com/stocks/x.htm. See my website at http://www.spbrunner.com/stocks.html.
This company operates three national stock exchanges, the Toronto Stock Exchange (TSX), the TSX Venture Exchange, and the Montreal Exchange (MXX). Toronto Stock Exchange serves the senior equity market. The Montreal Exchange is for Derivative Contracts and Options. The TSX Venture Exchange serves the public venture equity market, Natural Gas Exchange (NGX), a North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, a fixed income inter-dealer broker. Its site is at www.tsx.com
Thursday, June 19, 2008
Research In Motion
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 bought some Research In Motion (TSX-RIM) at end of 1999 and in the first part of 2000. I paid some $12,800 for this stock. I have since sold off about $30,000 (when it has split) and the stock I have left is worth some $74,960. According to Quicken, I have made an average annual return of some 31% on this stock.
This stock owes me nothing! I will hold it for a while longer. If it goes much higher, I will sell off some more. Each time I have sold some, I have brought good dividend paying type stock. I will do so again. This stock is certainly making up for the losses I have suffered in bank stock.
What is not to like about this stock? I have just updated my spreadsheet on it and there is little to question. This stock not only trade in Canada, but also in the US (NASDAQ-RIMM). The stock reports in US$. As in other Canadian stock that reports in US$, this stock has done better in US$ than in CDN$ because of the differences in exchange rates over the last few years.
The P/E on this stock is quite high, but this is to be expected from such a growth stock. It is expected the Earnings per Share (EPS) will go up strongly, so part of the high P/E is the expectation on higher earnings to lower the P/E. The Accrual Ratio is also high, but this stock will continue to go up while it is so liked by the market. This stock went down in the last bear market, but it has only gone up since. It is a stock that is helping the TSX make some of the gains it has this year.
Debt is very much under control. The Return on Equity (ROE) is very good. There is strong cash flow, revenue and earnings. However, this is a Tech stock, and technology can change very rapidly.
See my spreadsheet at http://www.spbrunner.com/stocks/rim.htm. See my website at http://www.spbrunner.com/stocks.html.
RIM designs, Manufactures and markets wireless solutions for the mobile communications market. The company is famous for the Blackberry. It is an international company with offices in North America, Europe and Asia-Pacific. Its site is at www.rim.net.
I have been lately looking at TSX Group (TSX-X) and will post the spreadsheet when I have finished it.
I bought some Research In Motion (TSX-RIM) at end of 1999 and in the first part of 2000. I paid some $12,800 for this stock. I have since sold off about $30,000 (when it has split) and the stock I have left is worth some $74,960. According to Quicken, I have made an average annual return of some 31% on this stock.
This stock owes me nothing! I will hold it for a while longer. If it goes much higher, I will sell off some more. Each time I have sold some, I have brought good dividend paying type stock. I will do so again. This stock is certainly making up for the losses I have suffered in bank stock.
What is not to like about this stock? I have just updated my spreadsheet on it and there is little to question. This stock not only trade in Canada, but also in the US (NASDAQ-RIMM). The stock reports in US$. As in other Canadian stock that reports in US$, this stock has done better in US$ than in CDN$ because of the differences in exchange rates over the last few years.
The P/E on this stock is quite high, but this is to be expected from such a growth stock. It is expected the Earnings per Share (EPS) will go up strongly, so part of the high P/E is the expectation on higher earnings to lower the P/E. The Accrual Ratio is also high, but this stock will continue to go up while it is so liked by the market. This stock went down in the last bear market, but it has only gone up since. It is a stock that is helping the TSX make some of the gains it has this year.
Debt is very much under control. The Return on Equity (ROE) is very good. There is strong cash flow, revenue and earnings. However, this is a Tech stock, and technology can change very rapidly.
See my spreadsheet at http://www.spbrunner.com/stocks/rim.htm. See my website at http://www.spbrunner.com/stocks.html.
RIM designs, Manufactures and markets wireless solutions for the mobile communications market. The company is famous for the Blackberry. It is an international company with offices in North America, Europe and Asia-Pacific. Its site is at www.rim.net.
I have been lately looking at TSX Group (TSX-X) and will post the spreadsheet when I have finished it.
Wednesday, June 18, 2008
FirstService Corp Spreadsheet
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.
Looking over the spreadsheet I have, I can see that the revenue is growing nicely. The Earnings per Share (EPS) can fluctuate on this stock and there does not seem to be any consensus on what it will do for earnings in 2009. I usually concentrate on the actual earnings, but others are looking at earnings on continuing operations or excluding usual items etc. 2008 has not been a good year for this company for earnings.
You will also note that this company has done much better in US currency than in CDN currency. It is an international company, doing business in North and South America, Europe, Asia, Australia and New Zealand, so it is reporting in US$. However, it still has not done badly in CDN currency.
Past growth has been good in revenue, earnings and price appreciation. The debt load has been a little higher than what I would like. There has been good growth in book value and cash flow. The Accrual Ratio is high, but it has in the past, not been a good predictor of what the share price will do. In 2008, the Operational Cash Flow is a lot higher than the Net Income and this is good.
At the present time, I am holding on to my shares, as I think that the market has overreacted. I will look at this again once we have some quarterly earnings in. The only change in this stock is that it had an earning loss for the quarter ending March 31, 2008; this is why EPS was down for the year ending in March 31, 2008. However, they are in Real Estate in US, an industry that is in some trouble. It is not unexpected that the market will punish all company in a troubled sector, no matter what their long term prospects are.
See my spreadsheet at http://www.spbrunner.com/stocks/fsv.htm. See my website at http://www.spbrunner.com/stocks.html.
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. It is an international company as noted above.
Looking over the spreadsheet I have, I can see that the revenue is growing nicely. The Earnings per Share (EPS) can fluctuate on this stock and there does not seem to be any consensus on what it will do for earnings in 2009. I usually concentrate on the actual earnings, but others are looking at earnings on continuing operations or excluding usual items etc. 2008 has not been a good year for this company for earnings.
You will also note that this company has done much better in US currency than in CDN currency. It is an international company, doing business in North and South America, Europe, Asia, Australia and New Zealand, so it is reporting in US$. However, it still has not done badly in CDN currency.
Past growth has been good in revenue, earnings and price appreciation. The debt load has been a little higher than what I would like. There has been good growth in book value and cash flow. The Accrual Ratio is high, but it has in the past, not been a good predictor of what the share price will do. In 2008, the Operational Cash Flow is a lot higher than the Net Income and this is good.
At the present time, I am holding on to my shares, as I think that the market has overreacted. I will look at this again once we have some quarterly earnings in. The only change in this stock is that it had an earning loss for the quarter ending March 31, 2008; this is why EPS was down for the year ending in March 31, 2008. However, they are in Real Estate in US, an industry that is in some trouble. It is not unexpected that the market will punish all company in a troubled sector, no matter what their long term prospects are.
See my spreadsheet at http://www.spbrunner.com/stocks/fsv.htm. See my website at http://www.spbrunner.com/stocks.html.
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. It is an international company as noted above.
Tuesday, June 17, 2008
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 was looking at this as it has come down a lot over the last few months and I own shares. I paid a reasonable price for my shares, an average of $23.00. It is interesting that the company, instead of starting a dividend chose to issue dividend paying preferred shares to its shareholders in August 2007
I notice that there is lots of insider buying. Also, the company has started to buy back shares, even though at the annual meeting in May 2008 it said it would not. I notice that they are not only buying back shares, but also the preferred shares they issued in 2007. This could be because of the steep drop in the price of the shares since the meeting. Has the market overreacted? This is very possible. Usually heavy buying by a company and its executives is a good sign.
The loss in EPS does not seem to call for such a large drop in price from $40 a share in July 2007 to $15 today. Or, is something else happening? Does the market know something I cannot see? Are they just having a bad year because they are into Real Estate in the US? Tomorrow, I will go over the spreadsheet I have.
I was looking at this as it has come down a lot over the last few months and I own shares. I paid a reasonable price for my shares, an average of $23.00. It is interesting that the company, instead of starting a dividend chose to issue dividend paying preferred shares to its shareholders in August 2007
I notice that there is lots of insider buying. Also, the company has started to buy back shares, even though at the annual meeting in May 2008 it said it would not. I notice that they are not only buying back shares, but also the preferred shares they issued in 2007. This could be because of the steep drop in the price of the shares since the meeting. Has the market overreacted? This is very possible. Usually heavy buying by a company and its executives is a good sign.
The loss in EPS does not seem to call for such a large drop in price from $40 a share in July 2007 to $15 today. Or, is something else happening? Does the market know something I cannot see? Are they just having a bad year because they are into Real Estate in the US? Tomorrow, I will go over the spreadsheet I have.
Monday, June 16, 2008
How I Got What I Wanted, Sort Of
I had a dream of retiring to read, so I decided to build my own pension plan by investing in stocks. I developed a 30 year plan to retire at 60. This was the earliest I could see it happening. Life did not exactly work out the way I expected. Life never does. This is not a bad thing. Life just turns out differently then you expect. However, since the time I come up with my plan, I have just kept plugging away at building a suitable portfolio to finance retirement.
Just after I started my plan, the company I worked for was bought out, so I had to move on. This turn out not to be as difficult as I first thought. I got a bonus for staying around until the buyout finished and then got a job. I actually got a better job than I had had. I revised my plan to retire at 58.
Along the way to retirement, I got married and had a child. I got my new husband interested in investing and everything seemed to be fine. I was plugging away at my investments and found I was ahead of schedule.
Unfortunately, my husband died and I became a single mom. I could not afford to invest new money, but by that time, I calculated that with no new investments, it would only take one more year to get to retirement. I needed to keep my current investment money properly invested and try not to dip into them. It was tough; every penny I made went to my current living expenses. I revised my plan to retire at 58.
In 1994, I was working at Confederation Life when it went into receivership. I was lucky. I got a bonus for staying on to the end of the wind up process and then got a contract job with Maritime Life. Unfortunately, I had to go all the way from downtown (Bloor Street) to Yonge and Eglinton. Working for Confederation Life I had gotten used to walking to work. So, I changed jobs and started to work for Manulife on Bloor Street.
In 1999, I got laid off. I thought about another job, but decided against it. I had gotten the amount I had originally considered I needed for retirement. I had not taken into account inflation on expected income as much as I should have. However, if I had no job, my net income would not change, as my income tax would come down a lot. My dividend income from my investments would be tax much more lightly than any salary I would earn. I also was getting a small CPP widows pension. So things actually happen much quicker than I expected, as I was only 54.
Now that I am retired, I do do a lot of reading. However, I also get to go to Starbucks every day and I have done a lot of work on genealogy. I also now write this blog. I never thought I would get interested in genealogy. When I starting making my plans, there was no internet and there certainly was no blogs. History has always been my favorite subject to read and I have certainly enjoyed many a history book in the last few years.
Just after I started my plan, the company I worked for was bought out, so I had to move on. This turn out not to be as difficult as I first thought. I got a bonus for staying around until the buyout finished and then got a job. I actually got a better job than I had had. I revised my plan to retire at 58.
Along the way to retirement, I got married and had a child. I got my new husband interested in investing and everything seemed to be fine. I was plugging away at my investments and found I was ahead of schedule.
Unfortunately, my husband died and I became a single mom. I could not afford to invest new money, but by that time, I calculated that with no new investments, it would only take one more year to get to retirement. I needed to keep my current investment money properly invested and try not to dip into them. It was tough; every penny I made went to my current living expenses. I revised my plan to retire at 58.
In 1994, I was working at Confederation Life when it went into receivership. I was lucky. I got a bonus for staying on to the end of the wind up process and then got a contract job with Maritime Life. Unfortunately, I had to go all the way from downtown (Bloor Street) to Yonge and Eglinton. Working for Confederation Life I had gotten used to walking to work. So, I changed jobs and started to work for Manulife on Bloor Street.
In 1999, I got laid off. I thought about another job, but decided against it. I had gotten the amount I had originally considered I needed for retirement. I had not taken into account inflation on expected income as much as I should have. However, if I had no job, my net income would not change, as my income tax would come down a lot. My dividend income from my investments would be tax much more lightly than any salary I would earn. I also was getting a small CPP widows pension. So things actually happen much quicker than I expected, as I was only 54.
Now that I am retired, I do do a lot of reading. However, I also get to go to Starbucks every day and I have done a lot of work on genealogy. I also now write this blog. I never thought I would get interested in genealogy. When I starting making my plans, there was no internet and there certainly was no blogs. History has always been my favorite subject to read and I have certainly enjoyed many a history book in the last few years.
Thursday, June 12, 2008
Toromont Industries Ltd
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.
The stock I ended up buying to replace AGF Management was Toromont Industries Ltd (TSX-TIH). There are a few negatives on this stock, such as the price to book ratio at 2.8 is a little high. This ratio depends more on what other stocks in the same category are doing and on what you might want. Also, the Accrual Ratio, when the Financial Cash Flow is included is a bit high at 5.7%. Without the Financial Cash Flow, this ratio is a more neutral figure of 1.5%.
Now on to what I like. The Earnings Per Share (EPS) has an average increase of 24% each year over the last 5 years. The dividends have been increasing at an annual average of 25% over the last 5 years. The Graham Price and the closing price is not that far apart. This is a growth stock, so you expect a divergence of these prices. The closing price on this stock has been increasing at an annual average rate of 24% over the last 5 years. The Liquidity Ratio (assets/debt) is 1.93. The current Liquidity Ratio is 1.99. This means that they have debt under control.
Over the past year, this stock has done mostly better than the TSX index. It is considered an industrial, and it has done better than the capped Industrial Index. The P/E is at a reasonable 15.5%
I first bought this stock for my RRSP account in December 2007. According to Quicken, I have made an annual return of 13.2% so far on this stock. This stock is also on the S&P/TSX Dividend Aristocrat List and on Mergent’s Dividend Achievers List.
See my spreadsheet at http://www.spbrunner.com/stocks/tih.htm. See my website at http://www.spbrunner.com/stocks.html.
This company has two sections. The Equipment Group is for their Caterpillar dealerships. The Compression Group, designs, engineers, fabricates, installs and services natural gas compression units; and hydrocarbon and petrochemical process compression systems; and industrial and recreational refrigeration compression systems. They do business in Canada only.
The stock I ended up buying to replace AGF Management was Toromont Industries Ltd (TSX-TIH). There are a few negatives on this stock, such as the price to book ratio at 2.8 is a little high. This ratio depends more on what other stocks in the same category are doing and on what you might want. Also, the Accrual Ratio, when the Financial Cash Flow is included is a bit high at 5.7%. Without the Financial Cash Flow, this ratio is a more neutral figure of 1.5%.
Now on to what I like. The Earnings Per Share (EPS) has an average increase of 24% each year over the last 5 years. The dividends have been increasing at an annual average of 25% over the last 5 years. The Graham Price and the closing price is not that far apart. This is a growth stock, so you expect a divergence of these prices. The closing price on this stock has been increasing at an annual average rate of 24% over the last 5 years. The Liquidity Ratio (assets/debt) is 1.93. The current Liquidity Ratio is 1.99. This means that they have debt under control.
Over the past year, this stock has done mostly better than the TSX index. It is considered an industrial, and it has done better than the capped Industrial Index. The P/E is at a reasonable 15.5%
I first bought this stock for my RRSP account in December 2007. According to Quicken, I have made an annual return of 13.2% so far on this stock. This stock is also on the S&P/TSX Dividend Aristocrat List and on Mergent’s Dividend Achievers List.
See my spreadsheet at http://www.spbrunner.com/stocks/tih.htm. See my website at http://www.spbrunner.com/stocks.html.
This company has two sections. The Equipment Group is for their Caterpillar dealerships. The Compression Group, designs, engineers, fabricates, installs and services natural gas compression units; and hydrocarbon and petrochemical process compression systems; and industrial and recreational refrigeration compression systems. They do business in Canada only.
Wednesday, June 11, 2008
Enbridge Inc
This blog is meant for educational purposes only, and not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
The first company I looked at to replace AGF was Enbridge. It is a utility company that is on both the Mergent’s Dividend Achiever and the S&P/TSX Dividend Aristocrat lists. I had taken a small position in this company in July 2005. It seemed to me to be decent stock then. There is nothing like owning a stock to make you take notice of it. I have not done badly in it. According to Quicken I have made just over 10% per year on average since I purchased it.
First, I will mention what I like about this stock. It has good growth in revenue for last 5 years of some 21%. If a firm cannot grow revenue, it cannot grow. It has good growth in dividends, as they have grown by some 10% per year over the last 5 years. There also has been a good growth in the closing price on this stock over the last 5 years of some 16% per year.
And now for the reasons I did not pick to buy more of this stock. Earnings Per Share (EPS) has not been growing much over the last 5 years, as the rate is less than 2% per year. The divergence between the Graham price and the closing price is getting very wide. If I was looking for a value stock, I would want a price near the Graham price. This is probably a dividend paying growth stock, but the divergence in price is a little much for me. The problem, as I see it, is that the stock price is growing a lot quicker than the book value. The book value is shareholder’s value, being the difference between the Assets and Liabilities of the company. Next the accrual ratio is getting high at almost 8%. This could be signaling that the stock price is high or that this company is bulking up its earnings with non-cash items. In any event, it is not good and could indicate that the stock price will fall in the future.
The last item is that the company’s liquidity ratio (assets/debt) is 1.36. I like this ratio to be 1.50 or higher. 1.36 is about normal for this company, but given the other negative factors it concerns me more.
See my spreadsheet at http://www.spbrunner.com/stocks/enb.htm. See my website at http://www.spbrunner.com/stocks.html.
Enbridge is focused on three core businesses of crude oil and liquids pipelines, natural gas pipelines, and natural gas distribution. They operate in Canada and US.
The first company I looked at to replace AGF was Enbridge. It is a utility company that is on both the Mergent’s Dividend Achiever and the S&P/TSX Dividend Aristocrat lists. I had taken a small position in this company in July 2005. It seemed to me to be decent stock then. There is nothing like owning a stock to make you take notice of it. I have not done badly in it. According to Quicken I have made just over 10% per year on average since I purchased it.
First, I will mention what I like about this stock. It has good growth in revenue for last 5 years of some 21%. If a firm cannot grow revenue, it cannot grow. It has good growth in dividends, as they have grown by some 10% per year over the last 5 years. There also has been a good growth in the closing price on this stock over the last 5 years of some 16% per year.
And now for the reasons I did not pick to buy more of this stock. Earnings Per Share (EPS) has not been growing much over the last 5 years, as the rate is less than 2% per year. The divergence between the Graham price and the closing price is getting very wide. If I was looking for a value stock, I would want a price near the Graham price. This is probably a dividend paying growth stock, but the divergence in price is a little much for me. The problem, as I see it, is that the stock price is growing a lot quicker than the book value. The book value is shareholder’s value, being the difference between the Assets and Liabilities of the company. Next the accrual ratio is getting high at almost 8%. This could be signaling that the stock price is high or that this company is bulking up its earnings with non-cash items. In any event, it is not good and could indicate that the stock price will fall in the future.
The last item is that the company’s liquidity ratio (assets/debt) is 1.36. I like this ratio to be 1.50 or higher. 1.36 is about normal for this company, but given the other negative factors it concerns me more.
See my spreadsheet at http://www.spbrunner.com/stocks/enb.htm. See my website at http://www.spbrunner.com/stocks.html.
Enbridge is focused on three core businesses of crude oil and liquids pipelines, natural gas pipelines, and natural gas distribution. They operate in Canada and US.
Tuesday, June 10, 2008
AGF Management
This blog is meant for educational purposes only, and not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
For me, I feel there are far more negatives than positives with this stock. Revenue growth for last 5 years is under 4% per annum. If a stock is not growing its revenue, the stock itself cannot grow. The stock has too much debt. The liquidity ratio (assets divided by debt) has been coming down for a few years. In 2004 it was 1.73, 2005 it was 1.51, 2006 it was 1.33 and in 2007 it was 1.22. What I want is a ratio of 1.50 or higher. (High debt is a huge negative.) The accrual ratio is 23%. If it is over 5%, you have to wonder if they are trying to hide something. Maybe the cash flow is not exactly as it would appear on the cash flow statement?
What are internet sites saying about this stock? They say it is a hold. They worry that AGF is facing major headwinds. I do not mind keeping a stock that people rate as a hold, or sometimes even as a sell, if the reason for the rating is because the stock price has gotten too high. However, you have to be cautious with stocks rated as a hold if they are having problem. AGF Management is certainly having problems.
There is not much I like about this stock except that the dividend has been increasing nicely. The Earnings Per Share (EPS) seem to be ok too, but the cash flow does not seem to be increasing. I think it is time for me to replace it.
See my spreadsheet at http://www.spbrunner.com/stocks/agf.htm. See my website at http://www.spbrunner.com/stocks.html.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including mutual funds, GIC’s, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada.
For me, I feel there are far more negatives than positives with this stock. Revenue growth for last 5 years is under 4% per annum. If a stock is not growing its revenue, the stock itself cannot grow. The stock has too much debt. The liquidity ratio (assets divided by debt) has been coming down for a few years. In 2004 it was 1.73, 2005 it was 1.51, 2006 it was 1.33 and in 2007 it was 1.22. What I want is a ratio of 1.50 or higher. (High debt is a huge negative.) The accrual ratio is 23%. If it is over 5%, you have to wonder if they are trying to hide something. Maybe the cash flow is not exactly as it would appear on the cash flow statement?
What are internet sites saying about this stock? They say it is a hold. They worry that AGF is facing major headwinds. I do not mind keeping a stock that people rate as a hold, or sometimes even as a sell, if the reason for the rating is because the stock price has gotten too high. However, you have to be cautious with stocks rated as a hold if they are having problem. AGF Management is certainly having problems.
There is not much I like about this stock except that the dividend has been increasing nicely. The Earnings Per Share (EPS) seem to be ok too, but the cash flow does not seem to be increasing. I think it is time for me to replace it.
See my spreadsheet at http://www.spbrunner.com/stocks/agf.htm. See my website at http://www.spbrunner.com/stocks.html.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including mutual funds, GIC’s, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada.
Monday, June 9, 2008
Selling? Attitude Maybe Everything
What if you got a stock that is not doing well, but you hate to sell and incur a loss. Maybe the first thing you need to do is change your attitude, or how you view this stock and your portfolio. When considering changes to your portfolio, especially selling, the question you need to ask is “What is best for my portfolio from here?”
I usually sell a stock and buy another one when I think that from now into the future I will be better off with this trade. That is I want to replace a stock in my portfolio with something I like better. This is a positive change.
I keep an eye on my investments. One stock that I have not been pleased with lately is AGF Management (TSX-AGF.B). The price of this stock is back to where it was in 2001. This stock has multiple voting shares. This means that because a family owns some of the company via multiple voting shares, they have effective control of the company. I do not mind multiple voting shares as I have done well by some companies with this structure for their shares. However, this stock has not done well. I have had this stock since 2001 and according to Quicken; I have made less than 2% average per year since then. This is probably due to the dividend. I know that it is on good dividend paying stock lists, such as S&P/TSX Canadian Dividend Aristocrats and Mergent’s dividend achiever list, and it is a good dividend paying stock, but you need something more. Also, just being on of the lists does not make it a great stock.
Tomorrow, I post my spreadsheet on this stock and talk about what will replace it. If I am going to sell this stock, what would I like better?
I usually sell a stock and buy another one when I think that from now into the future I will be better off with this trade. That is I want to replace a stock in my portfolio with something I like better. This is a positive change.
I keep an eye on my investments. One stock that I have not been pleased with lately is AGF Management (TSX-AGF.B). The price of this stock is back to where it was in 2001. This stock has multiple voting shares. This means that because a family owns some of the company via multiple voting shares, they have effective control of the company. I do not mind multiple voting shares as I have done well by some companies with this structure for their shares. However, this stock has not done well. I have had this stock since 2001 and according to Quicken; I have made less than 2% average per year since then. This is probably due to the dividend. I know that it is on good dividend paying stock lists, such as S&P/TSX Canadian Dividend Aristocrats and Mergent’s dividend achiever list, and it is a good dividend paying stock, but you need something more. Also, just being on of the lists does not make it a great stock.
Tomorrow, I post my spreadsheet on this stock and talk about what will replace it. If I am going to sell this stock, what would I like better?
Friday, June 6, 2008
Stock Market is Not a Zero-Sum Game
When I say the stock market is not a zero-sum game, I that mean the winners do not equal the losers. Basically everyone wins when the total value of the market goes up and everyone loses when the total value does down. When the markets go up, no one asks where the money was coming from to power the rise. However, when they come down, everyone wants to know where THEIR money went to. There are also relative winners and losers because people buy and sell stocks all the time. Some stocks will be winners when the market goes down and some will be losers when the market rises.
When the markets go down, you really only lose when you sell or the company goes bankrupt. Whether you should sell or not can be tricky. If your stock goes down just because the market has gone down, there is usually no need to sell. If this is not the cause, look to see if it is just a temporary set back. The stock market has a tendency to over react. If a stock has something negative happening, like the Earnings per Share (EPS) is not what was expected, the market can react harshly. This might only be temporary. If revenue and EPS are down and the debt ratio is high, you might want to reconsider if you want to hold on to a stock. Some stocks never recover and some take a very long time.
I also like to look at the Accrual Ratio. If this ratio is positive and high, it might mean that the company is hiding some problem. It also might mean that the Cash Flow is not as good as it appears. The Accrual Ratio is something I show on my spreadsheets.
When the markets go down, you really only lose when you sell or the company goes bankrupt. Whether you should sell or not can be tricky. If your stock goes down just because the market has gone down, there is usually no need to sell. If this is not the cause, look to see if it is just a temporary set back. The stock market has a tendency to over react. If a stock has something negative happening, like the Earnings per Share (EPS) is not what was expected, the market can react harshly. This might only be temporary. If revenue and EPS are down and the debt ratio is high, you might want to reconsider if you want to hold on to a stock. Some stocks never recover and some take a very long time.
I also like to look at the Accrual Ratio. If this ratio is positive and high, it might mean that the company is hiding some problem. It also might mean that the Cash Flow is not as good as it appears. The Accrual Ratio is something I show on my spreadsheets.
Thursday, June 5, 2008
Bank of Nova Scotia
This discussion is meant for educational purposes only, and not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
I follow this stock (TSX-BNS), but I do not have any for the simple reason I already have Bank of Montreal, Royal Bank and TD Bank. This is the only one that currently anyone has a buy rating on. It is a very good bank.
The dividend yield on this bank is slightly above average at 3.8% today, when the 5 year average is 3.22%. The market obviously likes this stock better than the other banks. The average annual dividend increases over last 5 years average 19%. This is excellent. However, I expect all Canadian Banks will slow down in dividend increases at least for this year and maybe next.
Both revenue and earnings per share are increasing nicely on this stock. The Price/Earnings Ratio (P/E), both current and trailing is slightly lower than the 5 year average. The trailing P/E is using current price, but last year’s earnings. In getting a current P/E there is some guess work, so it is handy to also look at the trailing P/E compared to the last 5 year average for the trailing P/E.
When comparing this bank’s chart to the S&P/TSX Composite, it has done a lot better than the other banks, and it is not so far off the TSX composite index. It has done much better than the S&P/TSX Capped Financials index. When deciding to buy a stock or not, it is handy to compare it to the general index and the index for its stock category. If it has done much worse, especially matching it to its category index, you are best to find out way before investing.
See my spreadsheet at http://www.spbrunner.com/stocks/bns.htm. See my website at http://www.spbrunner.com/stocks.html.
BNS is a bank. They offer personal and corporate banking and wealth management, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia.
I follow this stock (TSX-BNS), but I do not have any for the simple reason I already have Bank of Montreal, Royal Bank and TD Bank. This is the only one that currently anyone has a buy rating on. It is a very good bank.
The dividend yield on this bank is slightly above average at 3.8% today, when the 5 year average is 3.22%. The market obviously likes this stock better than the other banks. The average annual dividend increases over last 5 years average 19%. This is excellent. However, I expect all Canadian Banks will slow down in dividend increases at least for this year and maybe next.
Both revenue and earnings per share are increasing nicely on this stock. The Price/Earnings Ratio (P/E), both current and trailing is slightly lower than the 5 year average. The trailing P/E is using current price, but last year’s earnings. In getting a current P/E there is some guess work, so it is handy to also look at the trailing P/E compared to the last 5 year average for the trailing P/E.
When comparing this bank’s chart to the S&P/TSX Composite, it has done a lot better than the other banks, and it is not so far off the TSX composite index. It has done much better than the S&P/TSX Capped Financials index. When deciding to buy a stock or not, it is handy to compare it to the general index and the index for its stock category. If it has done much worse, especially matching it to its category index, you are best to find out way before investing.
See my spreadsheet at http://www.spbrunner.com/stocks/bns.htm. See my website at http://www.spbrunner.com/stocks.html.
BNS is a bank. They offer personal and corporate banking and wealth management, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia.
Wednesday, June 4, 2008
MPL Communications
This company has a website at http://www.adviceforinvestors.com/. You can sign up for free weekly investment emails from their site. This might tell you if you think their advice is valuable to you. Why I have brought up this company is because they sell investment advice. I have purchased their publications, from time to time, but I must admit that I have always done so at discounted prices. If you sign up for their free weekly email they will usually offer their publications to you at very good discounts.
If you want advice on to what good Canadian Companies to investment in, you cannot do better than subscribe to their Investment Reporter. This is a weekly publication. The site says that their regular price is $327 yearly, but they will give you a special offer of $230. One of their weekly emails offered this for $57 for 26 issues. In all events, this is an excellent investment letter and it would probably be a lot cheaper than paying the MERs on Mutual Funds over the long term.
You may want to start off with their The Money Reporter. It is cheaper to begin with and may be suitable if you do not have much money. The site says that the annual rate for this is $227, but you can have a no risk trial for $37. This publication comes out every two weeks.
Another publication they have, which I personally like, is the Investor’s Digest of Canada. I get a subscription to this publication every once in a while. The problem with this is that it is full of columnists who write articles for this investment letter. Because of this, their views on a stock can be very different. If you are a novice investor, you might find it confusing and want straight forward advice. But I like it, as I like to hear different views on stocks or investing in general.
Then I can make up by own mind. It all depends on what you want. The site says that the annual rate for this is $137, but you can have a no risk trial for $37. This publication comes out twice a month.
If you want advice on to what good Canadian Companies to investment in, you cannot do better than subscribe to their Investment Reporter. This is a weekly publication. The site says that their regular price is $327 yearly, but they will give you a special offer of $230. One of their weekly emails offered this for $57 for 26 issues. In all events, this is an excellent investment letter and it would probably be a lot cheaper than paying the MERs on Mutual Funds over the long term.
You may want to start off with their The Money Reporter. It is cheaper to begin with and may be suitable if you do not have much money. The site says that the annual rate for this is $227, but you can have a no risk trial for $37. This publication comes out every two weeks.
Another publication they have, which I personally like, is the Investor’s Digest of Canada. I get a subscription to this publication every once in a while. The problem with this is that it is full of columnists who write articles for this investment letter. Because of this, their views on a stock can be very different. If you are a novice investor, you might find it confusing and want straight forward advice. But I like it, as I like to hear different views on stocks or investing in general.
Then I can make up by own mind. It all depends on what you want. The site says that the annual rate for this is $137, but you can have a no risk trial for $37. This publication comes out twice a month.
Tuesday, June 3, 2008
Dividend Paying Stocks Are Not Always Safe
Do not automatically believe that dividend paying stocks are safe. They can get into trouble. They can decrease dividends, even if in the past they always raised them. They can stop dividends. Generally speaking dividend paying stocks, especially ones that continue to raise dividends are safe, but not always.
For example, TransCanada Corp (TSX-TRP) got into trouble in 2000 and cut their annual dividend from $1.12 to $.80. I know that people who held this stock were upset.
Even if you use such lists as the S&P/TSX Dividend Achievers, their stocks are not always the best to buy. It is fine to use such lists, but even at that you have to investigate any stock on their list to see if it a good one to buy. Look at their handling of Loblaw’s. This stock got into problems in 2005, but it was only deleted from this Dividend Achievers list in December 2007.
And, even good stocks do not always stick around. Of the first 3 stocks I bought, Bell (BCE), Labatt’s and Bank of Montreal, it looks like I will soon only have Bank of Montreal. I had to sell Labatt in 1995 as it was being taken over by Interbrew. It had been a good company and paid a nice dividend. Bell will soon be gone. Bell was actually the first stock I bought. I only have figures on Quicken from 1987, but it says that from 31 Dec 1987 to the end of last month, I have made a return of almost 9 ½% per year on this stock.
For example, TransCanada Corp (TSX-TRP) got into trouble in 2000 and cut their annual dividend from $1.12 to $.80. I know that people who held this stock were upset.
Even if you use such lists as the S&P/TSX Dividend Achievers, their stocks are not always the best to buy. It is fine to use such lists, but even at that you have to investigate any stock on their list to see if it a good one to buy. Look at their handling of Loblaw’s. This stock got into problems in 2005, but it was only deleted from this Dividend Achievers list in December 2007.
And, even good stocks do not always stick around. Of the first 3 stocks I bought, Bell (BCE), Labatt’s and Bank of Montreal, it looks like I will soon only have Bank of Montreal. I had to sell Labatt in 1995 as it was being taken over by Interbrew. It had been a good company and paid a nice dividend. Bell will soon be gone. Bell was actually the first stock I bought. I only have figures on Quicken from 1987, but it says that from 31 Dec 1987 to the end of last month, I have made a return of almost 9 ½% per year on this stock.
Monday, June 2, 2008
Bank of Montreal
This blog is meant for educational purposes only, and not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
I bought this stock (TSX code BMO) in 1983 for my Canadian Trading Account. According to Quicken, I have made return of some 16% annually (IRR - Internal Rate of Return) since 31 Dec 1987. This stock has a return of 14.3% over the last 5 years and dividends have added approximately 4% points to this annual return. Do not forget that all bank stocks have suffered of late, so this stock is currently depressed.
This stock has been growing their dividend by 17.7% yearly for the last 5 years. In 1987 my dividend income from this stock was $156 quarterly. Five years ago in 2003, my quarterly dividend was $411.84. My last quarterly dividend in February 2008 was $873.60.
The price of this stock has come down recently, but it will recover. It is a solid stock and bank stocks have fallen before because of financial crisis and Canadian banks have always recovered. Over the long term they do very well. The dividend is increasing at a much greater rate than background inflation (which runs, on a long term basis at 3% a year.) I do not expect it to do much until the end of the year, but the dividend yield is very good as it is 5.9%. Yield on this stock has been in the 3% range, so this is very good.
The spreadsheet I have placed below will show mostly the past. The earnings and cash flow are uneven. All banks are like this. However, over the long term, banks, especially in Canada, make money. You get the benefits of this as they pay good dividends, and the stock price goes up over the long term. Comparing Bank of Montreal with the S&P/TSX composite index, you will see that it is not doing as well. This is to be expected as no banks are doing well currently. It is also not doing as well as the S&P/TSX capped financial index. The banks and especially the Bank of Montreal, are out if favor at the moment, so I would not expect anything else.
There is one school of thought that you should buy good dividend paying stocks when the yield is high. This stock certainly fits that bill. It is a good stock and the yield is above normal for this stock. This is, of course, a good strategy if you are buying for the long term. In the short term, I expect the Bank of Montreal’s stock price to go no where, but you will be collecting a good dividend. The yield will eventually go back to its normal 3%, which implies that the stock will increase in value in the future. I do not know when this will happen, but in the meantime take the dividend until the stock price improves. The dividend is safe. In times like this, bank dividends tend to increase slower than usual. That is all.
However, that is not to say that all is well with this stock. The concern I have is that the bank’s revenue is not increasing much and that the stock price is increasing faster than the book value, or shareowner’s equity.
See my spreadsheet at http://www.spbrunner.com/stocks/bmo.htm. See my website at http://www.spbrunner.com/stocks.html.
If you email me with questions on this blog, start the subject line off with the word “blog” so that your email does not end up in my junk mail folder. To get my email address, click on “Profile”.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank with banking in Canada and US. They also have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America.
I bought this stock (TSX code BMO) in 1983 for my Canadian Trading Account. According to Quicken, I have made return of some 16% annually (IRR - Internal Rate of Return) since 31 Dec 1987. This stock has a return of 14.3% over the last 5 years and dividends have added approximately 4% points to this annual return. Do not forget that all bank stocks have suffered of late, so this stock is currently depressed.
This stock has been growing their dividend by 17.7% yearly for the last 5 years. In 1987 my dividend income from this stock was $156 quarterly. Five years ago in 2003, my quarterly dividend was $411.84. My last quarterly dividend in February 2008 was $873.60.
The price of this stock has come down recently, but it will recover. It is a solid stock and bank stocks have fallen before because of financial crisis and Canadian banks have always recovered. Over the long term they do very well. The dividend is increasing at a much greater rate than background inflation (which runs, on a long term basis at 3% a year.) I do not expect it to do much until the end of the year, but the dividend yield is very good as it is 5.9%. Yield on this stock has been in the 3% range, so this is very good.
The spreadsheet I have placed below will show mostly the past. The earnings and cash flow are uneven. All banks are like this. However, over the long term, banks, especially in Canada, make money. You get the benefits of this as they pay good dividends, and the stock price goes up over the long term. Comparing Bank of Montreal with the S&P/TSX composite index, you will see that it is not doing as well. This is to be expected as no banks are doing well currently. It is also not doing as well as the S&P/TSX capped financial index. The banks and especially the Bank of Montreal, are out if favor at the moment, so I would not expect anything else.
There is one school of thought that you should buy good dividend paying stocks when the yield is high. This stock certainly fits that bill. It is a good stock and the yield is above normal for this stock. This is, of course, a good strategy if you are buying for the long term. In the short term, I expect the Bank of Montreal’s stock price to go no where, but you will be collecting a good dividend. The yield will eventually go back to its normal 3%, which implies that the stock will increase in value in the future. I do not know when this will happen, but in the meantime take the dividend until the stock price improves. The dividend is safe. In times like this, bank dividends tend to increase slower than usual. That is all.
However, that is not to say that all is well with this stock. The concern I have is that the bank’s revenue is not increasing much and that the stock price is increasing faster than the book value, or shareowner’s equity.
See my spreadsheet at http://www.spbrunner.com/stocks/bmo.htm. See my website at http://www.spbrunner.com/stocks.html.
If you email me with questions on this blog, start the subject line off with the word “blog” so that your email does not end up in my junk mail folder. To get my email address, click on “Profile”.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank with banking in Canada and US. They also have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America.
Subscribe to:
Posts (Atom)