Tuesday, May 5, 2009

MI Development 2

I am continuing my reviewing this stock (TSX-MIM.A) today. This stock is also on the NY stock Exchange (NYSE-MIM). First, I looked into Insider Buying and Selling. What I found was no activity over the past year at all. So this tells us nothing.

Next, I looked at the spreadsheet ratios to see if this is a good current buy or not. I calculated a P/E of just over 9% if this company earns what the estimates are for it. This is a relatively low P/E ratio. However, there is really no P/E ratio on this company to compare this with as this company has had a number of years of earnings losses. When looking at dividend yield, I see that it is just over 7% and this is better than the 5 year average of just under 3%.

When looking at the Graham price, this stock’s price is way below this price. MI Development has a high book value and this stock is being sold way under the book value. One of the problems with this book value is that it has not changed much over the last 9 years. In fact, the current book value is lower than what it was 9 years ago. This is a real estate company, so at the moment it is hard to know for sure how actuate this book value is. If you look at the book value in US$, you get a slight increase over 9 years, but not much of an increase.

When I look at the analysts recommendations, I find that few follow this stock. What I find is a one strong buy, a buy, and a hold. The consensus recommendation is a buy. (See my site for information on analyst ratings.) I also find that Globe Investor gives this company 2 stars rating, out of a possible 5 star rating. This company has been able to make some cash flow so that the dividend is increasing, but I do wonder about its long term growth prospects and if this is a good place to put my money.

This is a real estate company that currently owns, leases, manages and develops a predominantly industrial rental portfolio. Almost all of their income producing properties is leased to Magna and its subsidiaries. It also holds 53% equity and 95% voting interest in Magna Entertainment Corp (MEC.A). Frank Stronach has multiple voting shares in MIM.B (and controls some 76% of votes). Its web site is www.midevelopments.com. See my spreadsheet at www.spbrunner.com/stocks/mim.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.

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