Waterfurnaces Renewable Energy

I am reviewing this stock today (TSX-WFI) as it has just been reviewed Investment Reporter. They think that the price is relative high, and it is a risky investment, but it is a buy for capital gains and dividend income.

All my following figures are for the year ending at the last annual statement of December 2007 as the December 2008 figures are not out year. The latest report is the third quarterly report, dated September 2008. First, what I find good about this stock. The Earnings per Share (EPS) growth for the last 5 and 10 years was 17.5% and 21%. Dividends just started 5 years ago, but the 5 year dividend growth is a healthy 11%. The Closing price growth for the last 5 and 10 years was 54% and 34%. The Return on Equity last year was 47% and the 5 year running average is 36%. The Liquidity is 2.94 where any figure over 1.50 is a good figure. The Asset/Liability Ratio is 2.38 a little lower than the 5 year average of 2.50. Here, again, any figure over 1.50 is good.

Now for what I do not care much for category. The 5 and 10 year growth in Revenue is just 5% and 7%. I must admit that part of the reason for this is the change in US/CDN currency. This stock reports in US$, probably because it does 80% of its business in the US. The 5 and 10 year growth in Book Value is -4% and 1%. Also, the 5 and 10 year growth in Cash Flow was 1% and 30%. The 10 year figures are good, but not the 5 year figures. This last thing to mention is that the Graham Price is just $5.44 and the current price is $28.25.

On Monday, I will review the latest quarterly report, and look at what other analysts are saying about this stock.

They are a manufacturer and distributor of residential and commercial geothermal and other water source heating and cooling systems. This is an international company with 80% of its revenue from the US. It has revenue from Canada of just over 16% and the rest of the world under 3%. Its web site is www.waterfurnace.com. See my spreadsheet at www.spbrunner.com/stocks/wfi.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.