Tuesday, November 11, 2008

Stantec Inc

I will like to do something different. I am here reviewing a stock that pays no dividends. I am reviewing this stock (TSX-STN) today, as it is one that has recently been recommended as a good buy. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building. I have looked at this stock recently as there are lots that think it is a great stock. I bought a small amount in April of this year. It, of course, has lost money for me this year, but I think that I will benefit from it in the long term.

I will look today at how it has done, mainly to the last annual report of December 31, 2007. Tomorrow, I will look at the latest quarterly report and update my spreadsheet for that report. This is a growth company. The 5 years to the last annual statement has seen the Revenue grow by 17% per year, the Earnings per Share (EPS) grow by 22% per year, the closing price grow by 37% per year and the Cash Flow grow by 14% per year.

The other positive things are that Asset/Liability Ratio is very good at 2.19; the Asset/Book Value ratio is low at 1.8; and the Return on Equity (ROE) is good at 15.6%. The problems I see is that the Current Asset/Current Liability Ratio is low at 1.39 (but I noticed it was much better at the first quarterly report); the Accrual Ratio is very high at 14%; and the Graham Price at $18.08 was way off the Closing Price of $38.89. However, I must say that for growth companies, it is next to impossible to buy at or below the Graham Price, although, for the current bear market, this is probably not true.

Stantec Inc is a profitable Construction & Engineering company that trades on the TSX. It provides professional services in planning, engineering, architecture, interior design, landscape architecture, surveying and geomatics, environmental sciences project management and project economics for clients, from initial concept and financial feasibility, to project completion and beyond. It works internationally. Its web site is www.stantec.com. See my spreadsheet at www.spbrunner.com/stocks/stn.htm.

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. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

No comments:

Post a Comment