Friday, June 19, 2009

Computer Modelling Group 2

I am continuing my review this company (TSX-CMG) today as I just received its annual statement for March 2009. This is also dividend paying small cap and it is one that I owned. It is a small cap and one tied to the oil and gas industry. The Globe Investor gives it a 5 star rating, but it is also in a class of its own in the type of software it provides. This would be a risky stock. That said, there is not a lot of analyst following it, but the ones that are rate this stock highly.

When I looked at the Insider Buying and Selling report, I find there is more selling than buying, especially, by the CEO. However, this recent selling does not substantially change the amount insiders have of this stock. People sell for lots of reasons, so this does not tell us anything.

When I look at spreadsheet ratios, I find that the P/E is around 15.7 and this is higher than the 5 year average on close of 14.7. However, the yield at 5% is higher than the 5 year average of 2.9%. When you look at the Price to Book Value, the current P/BV is 8.9 compared to a 5 year average of 5.2. When we look at the Price to Cash Flow, we find that the P/CF at March 2009 was 8.8 to a 5 year average of 13. However, the Dividend and Cash Flow and Stock Price are growing much quicker than the Book Value.

The other think to look at is the Graham Price. Here the Stock Price is much higher than the Graham Price. In fact, the difference is higher than it has ever been. There could be a problem with the current Graham Price as it is partly based on estimates of what the earnings are going to be. This stock tends to have better earnings than expected. So, we are getting mixed messages from these.

If you look at the charts, this stock has done, at any time period, much better than the TSX Index or the TSX Industrials Index. This is because this is a fast growing small cap. The company seems to certainly have faith that this stock will do well in earnings this year as they raised their dividends, plus threw in a special dividend.

When I look at ratings on this stock, I could only find two. One was a Buy and one was a Strong Buy. (See my site for information on analyst ratings.) I also found some favorable analysis of this stock. I did not find any negative comments. However, I would like again to point out that there are few reports on this stock and few analysts following it.

It is a computer software technology and consulting firm engaged in the development and sale software. They have 250 Clients in 45 countries. Their reservoir simulation software assists petroleum companies to extract an increased amount of oil and gas from their reservoirs. 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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