Astral Media Inc 2

I am continuing my review of this stock (TSX-ACM.A) today as I just read a review on this stock suggesting it is a good long term buy for raising dividends and increasing value. Ironically, this stock has not raised their dividends this year and they are holding it at last years rate.

I first checked the Insider Buying and Insider Selling stuff. For this stock, there is net Insider Selling to the tune of over $5M. However, some 63% of this company is owned, in voting shares, by the Greenberg family. Also, Paul Bronfman owns a lot of shares, and these people are not selling. A lot of the selling is in options as a number of insiders have lots more options than shares. I do not thing the insider selling is a problem.

The current P/E ratio is coming in low at just under 11. The P/E ratio for August 2008 was also low at just under 11. The 5 year average P/E low is about 14 and the 5 year average high is 18. So the current P/E ratio is good. The dividend yield at 1.7% is higher than the 5 year average of .8%. As I said yesterday, the dividend yield is usually quite low on this stock.

When I look at the Price/Book Value ratio, the ratio for August 2008 is about 72% of the 10 year average, and the current ratio is about 62% of the 10 year average. Also, even the current Price/Revenue Ratio at 1.84 is lower than both the 5 year average of 3.03 and the 10 year average of 2.82. The last thing to look at is the Graham Price and this price is some 25% above the current stock price.

If you look at all these ratios and at the Graham Price, the only conclusion is that the current price is very good indeed for this stock. This is also a dividend paying growth stock as Shoppers Drug Mart is. However, on this stock the current stock price is showing as a relatively great deal.

There are a few Strong Buys, Buys and Holds on this stock. The mean rating would be a Buy. (See my site for information on analyst ratings.) Some analysts feel that this stock is a good long term buy for growth and raising dividends.

At the moment, I have no intentions of buying this stock. However, the review was good and I thought I would do a spreadsheet on it. It is the sort of stock I like, a growing stock with dividends. One thing I do not like is that the yield is very low, and it is generally below 1%. The good thing is that the stock price has held up in this recession. If you had the stock for 5 years, you would have made about 6.8% average annual return. A lot of stocks have not held up as well as this one has.

Astral Media is a leading Canadian media company, reaching people through a combination of highly targeted media properties in television, radio, outdoor advertising, and interactive media. Its web site is www.astralmedia.com. See my spreadsheet at www.spbrunner.com/stocks/acm.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.