Friday, March 13, 2009

Cinram Intl Inc

I am reviewing this stock (TSX-CRW.UN) because I follow it and I used to own it. I know it has done quite badly lately, but it can be just as instructive too look at a failing stock as a successful stock. I bought this stock in 2000. At that time, it was coming out of a slump and was transitioning from making VHSs to DVDs. I sold this stock in June of 2007 as it seems to be having a hard time and I liked the stock Saputo better. I make an annual return of 19% on this stock during the time I held it. This figure, of course, includes dividends.

When looking at the price chart on this stock, it looks like I sold it at just the right time. The stock took a dive at the end of June 2007 and it has not recovered yet. After I bought this stock, I did keep an eye on it, as I knew its past history. This stock had a big run up in price from 1994 to 1998 and then crashed between 1998 and 2000. I have just updated my spreadsheet as the December 2008 report has come out.

The only real bright spot with this stock is that it is still earning a good revenue stream. However, there are other positive things as well. It also still has a positive cash flow, it has been coming done recently, but it is still positive. If you look at the balance sheet, it is relatively strong, with liquidity being at 1.40. I prefer to see this figure at 1.50, but at least they have current assets to cover their current liability. The Asset/Liability ratio is not as good at 1.01, but it is not that bad.

If course, there are very strong negative things about this stock. To begin with, it just does not seem to be able to make any profit. If you look at figures for earnings, cash flow, book value and stock price, they have all crashed over the last 2 years. They lost a lot less in 2008 than in 2007, but I do not think this is pointing to the end of their problems. I will look at what the analysts are saying on Monday.

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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