Monday, May 4, 2009

MI Development

I am reviewing this stock (TSX-MIM.A) today as I have just received its annual report. I bought this stock in 2003, and so far, I have only lost money on it. This is not surprising as this is a real estate stock, and all real estate stocks have been hit hard my this market.

This stock is not on anyone list. I bought it as I was diversifying into some real estate stocks and I read a favorable report on this stock. I only bought 100 shares as I am just trying it out. I also admire Frank Stronach, but at the moment, I will not buy Magna, as I do not think that automobile companies are going anywhere in the near future. So, because Frank Stronach owns this company, I thought I would give it a try.

Usually, at this point, I talk about the figures that have grown. The only measure on this stock that has grown is the Funds from Operations (FFO) and this is sort of like the cash flow available to the company for such things as dividends. Therefore, the dividends paid by this company have also grown very nicely. There has been no growth, and in some cases a decline, in Revenue, Book Value and Earnings.

The Liquidity ratio for 2008 is low at .62. This means that current assets cannot cover current liability. However, the Asset/Liability Ratio at 2.68 is very good. There is no Return on Equity (ROE) to speak of as there is no net income (or profit). Since there are no earnings, we cannot calculate the Accrual Ratio.

At the moment, I am going to continue to hold my shares, but I might decide to sell them in the future, if I see that this company cannot earn any money. Tomorrow, I will look to see what the analysts are saying.

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 See my spreadsheet 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.

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