McCoy Corp

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.

This first thing to look at is the growth figures. In a world where people ask for what have you done lately for me, this stock fairs better than Pulse Seismic does. For things like Revenue, Earnings, Stock Price, Book Value and Cash Flow, the 5 year figures for this stock are much better than the 10 year figures. For example, look at the 5 and 10 year growth figures for the Stock price. The 5 year growth figure is 40% per year whereas the 10 year growth figure is -2% growth per year. This is quite a difference.

The next thing to look at is the Asset/Liability Ratios. For the Liquidity Ratio we have 2.52. This is above the 5 and 10 year averages for this Ratio and a very good ratio. The Asset/Liability Ratio is 3.10, and this is also above the 5 and 10 year averages for this Ratio. With the Liquidity Ratio, we are saying that the current Assets cover very well the current Liabilities.

The next good think to remark on is that the Total Accruals are negative and we have a really low Accrual ratio of -12% for the year ending in 2008. The one I calculated for the March 2009 quarterly report is still negative, but it is only at -2%.

Now, to look at what is not so great about this stock. The first thing to notice is the Return on Equity (ROE). The 5 year average is good at 10% per year, but the one for the year ending in 2008 is -8% and the one I calculated for the March 2009 quarterly report is not very good at 2%. The other thing to mention on this stock is that the dividends have been reduced for 2009. The dividends have gone from $.03 a quarter to $.01 a quarter. The Dividends were reduced because of the current recession and McCoy Corp does not see a turn around in business for them before the end of 2009.

On Monday, I will look at what the analysts are saying about this stock. As it is a small cap, there will not be many analysts following this stock.

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 www.mccoycorporation.ca. See my spreadsheet at www.spbrunner.com/stocks/mcb.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.