Monday, June 29, 2009

Manitoba Telecom Service 2

I am continuing my review of this stock (TSX-MBT) today. I bought this stock in 2006 and I have made some 2.6% return on it since that time. What has happened since I bought this stock is that it has stalled. No dividend increases and no price increase. In actual fact, I would not buy this stock today. In 2006, this stock looked a lot better. It was not obvious in 2006 that this stock would stall as it has done. Also, this stock is not on any dividend stock list that I follow. Globe Investor gives this stock a 3 star rating.

I first looked at Insider Buying and Selling, like I usually do. There is a bit of selling of this stock in the $43 range at the end of last year. Since then, there has been no activity. In any event, insiders do not own much of this stock.

When looking at ratios, the yield on this stock is quite high at 7.7%. The 5 year average is 5.6%. However, the yield on this stock was more in the 2% to 3% range until the dividend increases stopped. The P/E is in the 11.5 range. This is better than the 13.7, 5 year average on the closing price and even better than the 12.4, 5 year average on the low stock price. When looking at the Price/Book Value ratio, I find that the P/BV of 2008 and at the current time is less than 80% of the 5 year average. This shows a good current price also.

When looking at analysts recommendations, I find that the consensus recommendation is a Hold. However, if you look at the recommendations, they go from a Strong Buy to a Sell and to everything in between. It is obvious that there is a very wide opinion on the value of owning this stock. (See my site for information on analyst ratings.)

Although analysts seem to feel that the earnings for 2009 and 2010 will be higher than those for 2007 and 2008, no one expects that the there will be much difference in the earnings of these years. So it appears that no one expect much to happen over the next two years. I also note that the estimate earnings for 2009 and 2010 have come down slightly from those I obtained in April 2009, when I last looked at this stock.

In looking at the charts, this stock has done better than the TSX and the Utilities Sub-Index only in the long term of 10 years. In the 3 years and 5 years range, it has done worse than both these indexes. In shorter terms like 6 months, it has done about as well as the utilities index, but worse than the TSX. If you look at this stock for the past year, it has again done better than both these indexes. This stock has not done well in the short term, but it did not drop sharply in this recession as other stocks have.

This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. 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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