Pareto Corp

I am reviewing this stock (TSX-PTO) today I got an offer from the company to buy my shares for a price from $.70 to $1.00. The company wants to purchase up to 1/3 of the outstanding shares for up to $10M cash. Since they announced this, the stock has been around $.80 per share.

I only bought this stock in June 2009. I was trying out small caps with dividends. This announcement is not bad for me, as the share price has gone up as it had been trading in the $.60 range. The company made this offer to provide liquidity for the shareholders and because they do not think that, the current price properly reflects the value of the shares.

Nothing much has changed since I reviewed this stock in June 2009. I have updated my spreadsheet for the 2nd quarterly report of June 2009. Most of the ratios are good, as they were in the last review. The accrual ratio has come down a bit and is now under 5% and this is good. The liquidity ratio has come up a bit and it is now 1.10. The stock is still trading at over 30% lower than the Graham Price. The P/E ratio is quite low at around 8 or 9, when anything at 10 or below is a strong buy signal. The dividend yield is still quite high at 7.5%.

I have no intentions of selling my shares. I do not have much and I usually buy for the long term. Since this is a small cap, I will keep an eye on it. Tomorrow I will finish Thomson Reuters Corp.

Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising, In-Retail Messaging, Direct Marketing, and Incentives. Its web site is www.pareto.ca. See my spreadsheet at www.spbrunner.com/stocks/pto.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.