Monday, July 6, 2009

McCoy Corp 2

This stock is one of the small cap stocks I looked at in the early part of this year. I was looking for one to soak up the remaining cash in my TFSA after buying Shoppers Drug Mart for this account. This stock (TSX-MCB) is one of the ones for which I had done a spreadsheet. I am looking at how the 3 small caps I found had fared since that time. I did not purchase this stock.

When I look at Insider Buying and Selling, I see only buying. However, it is only the CFO that seems to be increasing his substantially, but this was at the end of 2008. There have recently been some Directors buying share. There is no person with a big ownership position, so this buying show that persons connected with this company have faith in it.

The next thing to look at is ratios. The P/E ratio for current earnings estimate is quite high at 22. This ratio, however, falls quite low to about 7 when considering the earnings estimate for 2010. The other thing though is that the P/E ratios have often been very low. The yield at 3.3% is not particularly high, but it is higher than the 5 year average of 2.9%. However, the yield on this stock started very low at less than a 1% yield. Neither of these ratios tell us very much about the current price of the stock.

I looked next at the Graham Price. With the earnings estimate for 2009, the current price is some 30% below the Graham Price. With the earnings estimate for 2010, the difference between the current price and the Graham Price rises to over 60% discount of the stock price. This would seem to point to a current good price. The other thing that points to a possible good price is the negative Accrual Ratio.

As I have said before, this is a small cap stock and so there is not many analysts following it. I can find only a couple and both give a Hold rating on this stock. (See my site for information on analyst ratings.)

When looking at the charts, this stock has underperformed all the indexes with which I compared it. I compared this stock to the TSX, Industrials and Small Cap indexes. The reason is that this stock hit a high in 2006 and has only declined since that time. The company says that it is suffering from the problems in Western Canada in connection with the Oil and Gas Industry. If you are interested in this company, please realize that it is a high risk as it is a small cap and is dependant on our Western Oil and Gas Industry. Also, the Globe Investor site only gives this company a 2 star rating out of a possible 5 stars.

McCoy is the leading worldwide manufacturer of tubular make-up power tongs, for both land and offshore rig applications, is the second largest global supplier of make/break machines used for assembling downhole tool strings and testing pipe connections, and also manufactures consumable replacement parts (dies and inserts) used in rig equipment. McCoy builds mobile products including vacuum tanks, hydrovac systems, pick up and lay-down machines, and custom heavy duty trailers, crane dollies and oilfield chassis. The service portion of McCoy's business includes application of wear and corrosion resistant coatings for drilling tools; hydraulic cylinder services and refurbishment for rigs and heavy equipment; and maintenance, repairs and parts for heavy duty trucks and trailers. 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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