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.

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