Tuesday, March 17, 2009

First Service Corp

I am reviewing this stock (TSX-FSV) because I follow it and I own it and I want to buy some more stock. I just do not know if this is the stock, I want to buy. This stock has come down a lot lately. It has declined from $31.80 to $9.82, a decline of almost 70%.

I bought this stock in 2002 and I have so far have lost some 10% per year on it. I have just updated my spreadsheet as the December 2008 3rd quarterly report has come out. This is not a stock on anyone’s list as it is not a dividend paying stock. However, in 2007, they issued preferred shares to their common stock shareholders and the preferred shares are paying a dividend. Up until 1999, they used CDN$ in their financial reports. Since that time, they have used US$. My spreadsheet is in CDN$ as this is what is important to me as I live in Canada.

If you look at Earnings per Share (EPS), you will see the 5 year growth is -2.49%. This is because the year ending in March 2008, was a bad earnings year for them. The earnings expected for this year and 2010 are expected to improve. They have done better than expect until the 3rd quarter ending December 2008 and here they had an EPS loss. However, for the first 3 quarters they have made $1.81 US, which is higher than for the year ending March 2007. So this is an improvement.

Another positive thing is that the stock price at $9.82 is below the Graham Price of March 2008 of $14.32 and below the Graham Price for December 2008 of $17.84. Also, their net income has improved, along with the Accrual Ratio. The Accrual Ratio for March 2008 was 19.02%. It is now -8.68%, which is a very good improvement. The other positive thing is that the Asset/Debt ratio is now 1.51, up from 1.37 at March 2008. However, the Liquidity Ratio is lower at 1.22 when it was 1.29 at March 2008. Tomorrow, I will look to see what the analysts are saying about this stock.

This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Its web site is www.firstservice.com. See my spreadsheet on this company at www.spbrunner.com/stocks/fsv.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.

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