Monday, March 16, 2009

Cinram Intl Inc 2

Cinram Intl Inc 2
I looked at this stock (TSX-CRW.UN) on Friday and said I will continue the review today. The one thing you can say about this stock is that there is lots of insider buying. There was some insider selling in June 2008 when the stock was still over $6. However, there has been only insider buying since November 2008 and continuing to the present. This was when the stock was below $4 and especially when it has been below $2. I have updated my spreadsheet with some estimate figures.

This company started paying dividends (or distributions) in 2002 and stopped at the end of 2007. The reason they were stopped is because of debt covenants. There have been no indications that the dividends will be reinstated anytime soon.

In looking at the usual ratios on the spreadsheet, there is not much to tell. You cannot look at P/E or Yield as there are no earnings and the distributions has been suspended. The ones we can look at are not bad, whereby the Price/Sales ratio is now .04 and this is lower than the 5 year average of .39. This company is not expected to make much in cash flow for 2009, but if it does as expected, the Price/Cash Flow ratio is 2.28 and this is lower than the 5 year average of 4.05. The last ratio to look at is Price/Book Value and the current one is 2.80 compared to the 5 year average of 3.15. In all these ratios, lower is better.

Other ratios we can look at are the ones concerning debt and accruals. The Liquidity Ratio is at 1.40 and this is higher than the 5 year average of 1.18, but it would be preferable to be at 1.50. The Asset/Debt Ratio is at 1.01 and this is lower than the 5 year average of 1.24. Here again, this ratio would be better if it was at least at 1.50. However, the accrual ratio is very good at -8.04. Any accrual ratio of -5 or better is great.

There are lots of Hold ratings on this stock, and a few Underperform. The consensus rating would be a Hold. (See my site for information on analyst ratings.) The analysts with the Hold ratings seem to feel that this stock will have positive earnings for 2009. Others feel that this company will not have any positive earnings and are looking to the stock underperforming. It is interesting that there seems to be no Sell ratings.

If this stock is going to do well again, there is probably plenty of time to see this as the stock is worth just over $1.00 currently. On the other hand, if you invest in it now, it would not cost much and therefore you could not lose much. This stock no longer fits into what I want to buy, which is dividend paying stock, so I will probably pass it currently, but I will continue to track it.

Cinram is the world's largest provider of pre-recorded optical discs and related logistics services for leading motion picture studios, music labels, publishers and computer software companies. Cinram also provides distribution and logistics services to the telecommunications industry in North America and Europe through its wireless subsidiaries. Its web site is See my spreadsheet on this company at

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 for a list of the stocks for which I have put up spreadsheets on my web site.

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