Wednesday, September 30, 2009

Bombardier Inc.

I am reviewing this stock (TSX- BBD.B) today as I received the January 2009 annual report and I have not reviewed it since I received this report. I bought my shares in this company in 1987. I have only tracked this stock in Quicken since 1988 and since that time, I have made a return of some 14% per year. However, this company has had a lot of ups and downs since I bought it. Since I bought this company way before the huge run up in its price in 2000/2001, I have done quite well. However, if anyone has bought this stock around 1996 or later, they probably have made no money on it.

This company ran into serious problems in 2004 and first cut their dividend and then stop paying dividends altogether. In was just in late 2008 that the company started to pay dividends again. I bought this stock quite early and I have hung on to it. It is hard to say whether that was wise or not. When you look at the growth of certain figures like revenue and earnings for the last 5 years, they are practically none existent. However, a lot of figures have started to pick up in 2005 and 2006. Revenues have been rising since 2005 and earnings have been rising since 2006.

When I look at the Liquidity Ratio and the Asset/Liability ratios, I find them both quite low at 1.19. I like to see both these figures at 1.50 and above. However, they are at least over 1.00. This means that the current assets can cover the current liabilities and also the assets can cover the liabilities. This stock has never had high scores in liquidity at any time that I can see.

In looking at the Return on Equity, these figures of late have not been bad. Bombardier had a particularly good year end in January 2009. It looks also from the recent 2nd quarterly report, that Bombardier will have another good year. The net earnings are good. However, what I do not like is that the Operating Cash Flow was negative for the first quarter and this has also affected to Operation Cash Flow to date. This has resulted in a very high Accrual Ratio. Hopefully this will be corrected before the end of their next fiscal year.

Currently, I am going to hold on to my shares. I have no intentions of buying any more. I will look at see why stock analysts are saying about this stock tomorrow.

Bombardier is a world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services. Headquartered in Montréal, Canada, Bombardier has a presence in more than 60 countries. Its web site is www.bombardier.com. See my spreadsheet at www.spbrunner.com/stocks/bbd.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.

Tuesday, September 29, 2009

Consumers Waterheater Fund 2

I am continuing my review on this stock (TSX- CWI.UN) today as I have updated my spreadsheet with the December 2008 annual report and I have never blogged on this stock. It is a stock I follow, but I do not own it. I started following it when I started to look at income trust stock. However, I have never owned much in income trust stocks.

The interesting thing about Insider Buying and Insider Selling on this stock is that there is only Insider Buying. Buying occurred up until the end of August 2009. There is not an awful lot of Insider Buying, but the CFO, Directors and other officers were all buying. This is a widely held company, so insiders do not have a lot of stock.

The P/E I get is around 21 based on expected earnings. The P/E from other sites based on earnings over the past 12 months is around 9. Both these figures are lower than the 5 year low average of 27. The P/E ratio on this stock has often been quite high. When looking at yield, the current dividend will give one of just over 14%. This is after the dividend cut. This is also higher than the 5 year average of 8.5%. These make the current price look good.

However, went you get to the Graham Price, you see something different. The Graham Price is some 10% lower than the current price. When looking at the Price/Book Value ratio, the one for the end of 2008 was higher than the 10 year average. However, the current P/BV is only about 60% of this 10 year average. When the P/BV is less than 80% of the 10 year average, the price is considered to be a good one. Of course, the problem I see with the Book Value is that is has been decreasing since this company was formed.

Another ratio that is good is the accrual ratio, and this ratio is negative, which is good. However, for this ratio to be really good, it would have to be below -5%. This ratio at the end of June 2009 was only -4%. This is not bad, but not great either.

For all periods, this stock has done worse than the TSX Index. However, the dividends have added some 10% per year to the stock price return over the past 10 years. Even with this, the total return is rather modest at just over 3% per year for the last 5 years. This stock has totally missed the stock market rally that started in March 2009.

When I look at recommendations on this stock, I find that there are few people following this stock. There are appears to be only a Hold rating and an Underperform rating. This will probably be a consensus of Hold. (See my site for information on analyst ratings.)

The company seems to be acknowledging the fact that this company will not earn much in the short term because it has lowered it dividend. The company insiders seem to be saying that they expect the company to do fine in the long term. However, I can see why analysts are not recommending this stock; it seems to be going nowhere. The ratios that I looked at give a rather mixed picture, but give no comfort about the stock being a good buy.

Consumers' Waterheater Income Fund owns a portfolio of water-heaters and other portfolio assets, which they rent to primarily residential customers. They rent out water-heaters in the GTA and southern Ontario and it is considered a Business Trust. Its web site is www.consumerswaterheaters.com. See my spreadsheet at www.spbrunner.com/stocks/cwi.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.

Monday, September 28, 2009

Consumers Waterheater Fund

I am reviewing this stock (TSX- CWI.UN) today as I have updated my spreadsheet with the December 2008 annual report and I have never blogged on this stock. It is a stock I follow, but I do not own it. In the past, I have followed a number of Income Trust Fund stocks, but I have not invested much in them. It probably matters little in today’s market as they are on their way out.

I try to get at least 11 data on a company. However, this income trust was only set up in 2002. So, for the growth figures, I am only looking at the last 5 years. Most of these growth figures I find mediocre at best and awful at worst. The only decent growth figures had been the increase in dividends. This had a 5 year growth of over 4% per year. However, the company has just announced that the dividends, effective in October 2009, will be cut in half. So there goes that good figure. The one point to make on this is that even with the decrease, this company has a high yield of almost 14%.

The bad growth figures are like the stock price. Except for the initial run up, the stock price has been on the decline since 2003. The other declining figure has been the book value, and this value has declined at the over 13% per year. The mediocre figures are such things as earnings. This has been increasing at just over 5% per year. Here again is another problem. Although people expect this stock to make rather decent earnings this year, most do not expect that there will be positive earnings for 2010.

When I look at liquidity, I find that although it used to be fine, it is currently very low. It is sitting at 0.24 now. This is a bit better than the 0.14 at the end of 2008, but no where can you see the current assets covering the current liabilities. The Asset/Liabilities ratio is also low. It used to be better, but with it currently at 1.21, the only good thing is that it is over 1.00.

The Return on Equity (ROE) is the one very decent figure. It was 10.4% at the end of 2008 and so far this year it is at 13.5%. If others looking at this stock are right, this will also tank in 2010 as the company is not expected to make positive earnings in that year.

I am not saying much good about this stock, so I suppose you will not be surprised that I have no interest in buying this stock. You wonder if it still worthwhile following income trust companies. The only interesting thing is what will have to these companies after 2011.

Consumers' Waterheater Income Fund owns a portfolio of water-heaters and other portfolio assets, which they rent to primarily residential customers. They rent out water-heaters in the GTA and southern Ontario and it is considered a Business Trust. Its web site is www.consumerswaterheaters.com. See my spreadsheet at www.spbrunner.com/stocks/cwi.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.

Friday, September 25, 2009

Waterfurnaces Renewable Energy 2

I am reviewing this stock (TSX-WFI, WFI.U) as it is a stock I follow. I have updated my spreadsheet with the 2008 annual report and the 2nd quarterly report for June 2009. The stock reports in US Dollars, but the stock trades mostly in Canadian funds. However, it can also be traded in US funds under the WFI.U symbol. It probably reports in US Dollars as most of its business is in the US.

When I look at Insider Buying and Insider Selling under this stock, what I see is that this stock has not done much over the last year. There has been slightly more insider selling than insider buying, but nothing much is going on. By the way, the TSX has not done much over the past year.

The current P/E ratio that I get is just over 21. The 5 year average low is 16.7 and the 5 year average high is 28. Others get a current P/E of closer to 18 or 19. When you are looking at current P/E, it greatly depends on what you are using for earnings. Some use the last 12 months earnings and some use, as I do the estimate earnings for the current year. In any case, the P/E is not low, but it is not extraordinarily high either.

The current yield at 3% is not lower than the 5 year average 3.7%. So this does not point to a good current price. When I look at the Price/Book Value figure, I find that the current ratio is 180% of the long term average. There is a problem with the Book Value, as it has not been increasing as rapidly as other values, such as earning, stock price and revenue.

When you look at the Graham Price, I find that it is about 70% below the current price. The Graham Price is lower in 2009 that in 2008 because of lower expected earnings and the lower Book Value for the statements ending in June 2009. However, the Graham Price is not that much lower. The average difference over the last 10 years between the Graham Price and the stock price is some 35%. So, none of this stuff shows a current good entry price for this stock from my perspective.

For all periods, this stock has done better than the TSX and you have the bonus of dividends. Over the past 10 years, this stock’s dividend has added over 4% to the return on this stock. Over the past 5 years, this stock’s dividend has added over 5.6% to the return on this stock. We do have to remember that past results can point to the future, but there is no guarantee that future results will be like the past results.

When I look at recommendations on this stock, I see lots of Strong Buys and Holds. I can also see some Buys issued a few months ago, when the stock was cheaper. The consensus recommendations would seem to be a Buy. (See my site for information on analyst ratings.)

What I can see is that people seem to like to this stock because it is green and it is believed that the people managing this company know how to make money. The dividends are excellent. I am going to keep on tracking this stock, but I will not be buying any, at least not at the present time.

They are a manufacturer and distributor of residential and commercial geothermal and other water source heating and cooling systems. This is an international company with 80% of its revenue from the US. It has revenue from Canada of just over 16% and the rest of the world under 3%. Its web site is www.waterfurnace.com. See my spreadsheet at www.spbrunner.com/stocks/wfi.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.

Thursday, September 24, 2009

Waterfurnaces Renewable Energy

I am reviewing this stock (TSX-WFI, WFI.U) as it is a stock I follow. I have updated my spreadsheet with the 2008 annual report and the 2nd quarterly report for June 2009. This is a rather small cap stock that is not heavily traded. The stock reports in US Dollars, but the stock trades mostly in Canadian funds. However, it can also be traded in US funds under the WFI.U symbol. It probably reports in US Dollars as most of its business is in the US.

If you look at the growth figures for this company, they are all very good except for the growth in Book Value. This stock pays out a high percentage of its cash flow. The Book Value is not growing as fast as the earnings and stock price. This is why there is a big discrepancy between the Graham Price and the stock price. The Graham Price depends on both Book Value and earnings.

For the growth figures that are very good, you need look not further than the earnings, which have had a growth of some 44% per year over the last 5 years. The earnings have also grown about 27% per year over the last 10 years. The total return on this stock over the last 5 years is some 36% per year. The dividends started in 2003 and have grown just over 16% per year over the past 5 years. This company has had some remarkable growth.

The Liquidity Ratio and Asset/Liability ratio are very high. What I like to see is both these ratios at 1.50 or higher. Both these ratios have been over 2.40. This is excellent. The Return on Equity (ROE) for this company is great. The 5 year average is over 44% and ROE at the end of 2008 was over 57%.

I do not own this stock. I had heard of this stock, so I did a spreadsheet. It is an interest investment as it a very green company that pays a good dividend. I am going to continue to track it for now.

They are a manufacturer and distributor of residential and commercial geothermal and other water source heating and cooling systems. This is an international company with 80% of its revenue from the US. It has revenue from Canada of just over 16% and the rest of the world under 3%. Its web site is www.waterfurnace.com. See my spreadsheet at www.spbrunner.com/stocks/wfi.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.

Wednesday, September 23, 2009

Home Capital Group 2

I am reviewing this stock (TSX-HCG) as it is a stock I follow. I have not written up this company before, but I have updated my spreadsheet with the 2008 annual report and the 2nd quarterly report of 2009. This company is in the financial services industry and it is good dividend paying growth stock.

When I look at the Insider Buying and Insider Selling I see that there has been some heavy Insider Selling lately, but it has been by one director and one officer. I also see that this company has been buying back shares in the company for cancellation. You have to wonder how important this insider selling is. The company has shown their faith in the company by increasing the dividends this year by 14%.

The current P/E, based on earnings estimates, is just 9.9. Anything below 10 is usually considered a low P/E. Also, this P/E is below the 5 year low average P/E of 12.8. This is a growth company and growth companies tend to have higher P/E than other types of companies. The 5 year average yield is just below 1% and the current yield is 1.5%. So, this is an improvement and points to a relatively good current price.

If you look at the Graham Price, it is just 6% higher than the current price. When looking at the stock price, a good price is at the Graham Price and this is not far off. On average, the Graham Price has been 50% lower than the stock price, so this shows a good relative price. And, let’s face it, when you are dealing with stocks, everything is relative.

If you look at the Price/Book Value, I find that current P/BV ratio is only 70% of the long term average P/BV. Anything below 80% of the long term P/BV ratio is good. What all these ratios lead me to believe is that the current stock price is a relatively good one for this company.

When I look at analysts’ recommendations, what I see is lots of Strong Buys and lots of Holds and a very few Buys. The only censuses rating would be a Buy. (See my site for information on analyst ratings.)

I do not know why various analysts are issuing Holds on this stock. The only problem I see is the high Accrual Ratio. I do not like this to be above 5% and it is currently at almost 11%. However, this company is into subprime mortgages, so this could be a reason, but this is only a guess. As I said yesterday, I will continue to track this company, but I already have too much invested in the Financial Sector currently to invest in this one.

Home Capital Group Inc. operates through one subsidiary, Home Trust Company, to provide mortgage lending, deposit, retail credit and credit card issuing services. They have subprime mortgages. The stock is widely held. Its web site is www.homecapital.com. See my spreadsheet at www.spbrunner.com/stocks/hcg.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.

Tuesday, September 22, 2009

Home Capital Group

I am reviewing this stock (TSX-HCG) as it is a stock I follow. I have not yet written up this company. I have updated my spreadsheet with the 2008 annual report. This company is in the financial services industry and it is a good dividend paying stock.

If you look at the growth figures for this company, they are all very good. So far, it has been a fast growing company. The dividends have been growing rapidly. The dividend growth figures for the last 5 and 10 years are 53% per year and 41% per year. They have also not paid out a high portion of their cash flow. The 5 year average is 11%. Although the percentage of cash flow being paid out has increased over the years starting around 5% and the last is around 15%.

The only growth figure that is not great is the total return, which includes stock price and dividends to the end of 2008. The 5 year growth was only 5% per year. Considering this stock got hit with the bear market and the stock price declined sharply (over 50%), this is not surprising. However, the stock price has now risen to almost that of 2007. So, if you had had this stock for the last 5 years, you would now be enjoying great 5 year returns.

The Asset/Liability ratio is just 1.08. However, this is a financial stock and this ratio is not bad for a financial stock. The Return on Equity (ROE) for this company has always been great, especially the last 5 or 6 years. The 5 year average at the end of 2008 was 25.8%.

One negative I see on this stock is that the dividend yield has been quite low. The 5 year average is under 1%. The current yield is a bit better at 1.5%. Still this is low. However, the rapid increases in dividends might make up for this low yield. The other thing I have noticed is that the Accrual Ratio has been quite high and usually way over 5%. This might call into question the quality of the earnings shown in the financial statements. This is just a cautionary note; mostly this company seems to be a fast growing financial services company with a rapidly increasing dividend.

I do not own this stock. I have too much already invested in the financial section of the TSX. However, I intend to continue to following this stock. This is a relatively small company and I notice the Globe and Mail gives it a 4 star rating. However, this company is a fairly risky investment. Please remember that past returns do not predict future returns.

Home Capital Group Inc. operates through one subsidiary, Home Trust Company, to provide mortgage lending, deposit, retail credit and credit card issuing services. Its web site is www.homecapital.com. See my spreadsheet at www.spbrunner.com/stocks/hcg.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.

Monday, September 21, 2009

Do Not Buy What You Do Not Understand

When investing, never invest in a company that you do not understand. Before you invest, ask yourself, “Do you understand how they earn their money?” If not, remember you cannot hope to understand everything. The thing is just to move on to another company to invest in.

Another good question to ask yourself is “Do you like how a company makes it money?” Do you think that they treat their employees, their customers and the general public well? If the answer is no, then it is also a good time to move on. Is the company is the type of business I would be proud to support? If not, also a good time to move on.

My suggestion is that you should only invest in companies that you like and understand. There may be a good reason why you do not understand how a company makes its money. It may just not be doing as well as the financial statements show. It just may be that you do not understand a company’s business because it is not doing reasonable things. Other people may not understand it either, but few people seem to admit such things.

Also, if you do not like how a company makes it money, it is probable that others do not also. How long is such a company going to stay in business? It may do fine for long time, but things have a way of catching up with both people and companies. People may currently do business with a company they do not like. However, they will probably stop doing business with it as soon as they are able. The long term viability of the company may not be great.

Investing in companies you do not understand or like is not “capitalism” it is stupidity. How do you really expect to make money in the long term investing this way? Do you think that investing in some company you do not like or understand is any way to make money in the long term? Also, my use of “capitalism” above is a total misuse of the word. Some people feel because they live in a “capitalist” society, that everything can be put down to capitalism. I meet people all the time that who uses the word “capitalism”, but have no understand of what it means.

And, if you are working with a financial advisor, do not like him or her talk you into buying something you do not understand or like. It does not matter if it is a company’s stock or a product. May sure you understand what it is you are buying. If something sounds too good to be true it probably is. You will never get something for nothing. There are also no guarantees in life, and with everything, there are always risks. Make sure you understand anything you buy.

Remember that the most recent mortgage products that have done so much damage were thought up by mathematicians working at investment companies. They may know math, but do they know how the real world works? These math guys were considered geniuses. Do you know any geniuses? Do they really operate in the real world better than you do? If you invest, you are investing in the real world. So, give a little thought to what it is you are investing in.

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.

Friday, September 18, 2009

Canam Group Inc 2

I am reviewing this stock (TSX-CAM) as I read a favorable review on it. I am interested in small cap companies that pay dividends, so this company fits into what I want to investigate. Being a small cap, it is also much higher risk that such companies as Great-West Lifeco Inc that I recently reviewed. If you cannot afford extra risk, you should stay away from small cap stocks.

When I look at the Insider Buying and Insider Selling I see two things. There is some Insider Buying by individuals and there is buying by the company. There is not a lot of Insider Buying, but it would seem that Insiders do have faith in this company.

In looking at the P/E, I find the average low P/E very low at just under 7. The average P/E is close to 10 based on the closing price at year ends. The P/E at the end of 2008 was just under 7. Because this stock is not expected to have good earning for 2009, I get a current P/E of 12.8. However, others find a current P/E at 7 or 7.5. It all depends on what your earnings expectations for 2009 is and if you use this or last 12 month earnings to get a P/E. The forward P/E I get is again quite low at 9.6.

If you look at the Graham Price, it is 35% higher than the current price. The Graham Price for 2009 is depressed because of expected lower earnings. If you look at the Graham Price at the end of 2008, it is over 50% higher than the current price and if you look at the expected Graham Price for 2010, it is over 40% higher than the current price. Any price of a stock at or below the Graham Price is a good price.

The last ratio I want to look at is the Price/Book Value ratio. The current P/BV ratio is less than 70% of the long term P/BV ratio. This also points to a good price. One of the things that some analysts have commented on about this stock is that the Book Value at $9.19 is higher than the stock price of $7.01. This basically means that the break up value of the company is higher than the stock price. This is all very good and I can see why there are buys out on this stock.

Personally, what I do not like is the inconsistency in dividend payments. They tend to stop and start and go up and down. I like to buy stock for a future stream of increasing dividend payments. This stock will not provide this. The management has said very plainly they will only pay dividends when they feel the company can afford to. Although it would appear, on a long term basis, you could make money from this stock, with dividends plus stock price increases, it is probably not the sort of stock I want.

When I look at analysts’ recommendations, the consensus is a Buy. There are a surprising number of analysts that follow this stock. The only ratings I can find are Buys and Holds. (See my site for information on analyst ratings.)

Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, India and Romania. Marcel Dutil owns 16% of this company. Its web site is www.canamgroup.ws. See my spreadsheet at www.spbrunner.com/stocks/cam.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.

Thursday, September 17, 2009

Canam Group Inc

I am reviewing this stock (TSX-CAM) as I read a favorable review on it. I am interested in small cap companies that pay dividends, so this company fits into what I want to investigate. Being a small cap, it is also much higher risk that such companies as Great-West Lifeco Inc that I recently reviewed. If you cannot afford extra risk, you should stay away from small cap stocks.

The first thing I looked at was the growth figures for this company. If you look at the spreadsheet, you will see some of these figures in light purple. This is because I feel that the growth figures for a period do not fairly represent how this company is doing. For example, if you look at the growth of dividends it shows a 5 year growth of over 50%. However, this is because the dividend was unusually low 5 years ago. The other thing about dividends on this company, the 5 year period covers two years of no dividends at all. The dividends on this stock have varied a lot.

This same problem occurs with the Cash Flow growth figures. The 5 year growth figure is really meaningless, as the Cash Flow has varied greatly over the past 5 and 10 years. The Earnings per Share growth is not great either. This has varied over time and the high accrual ratio over the past few years could point to problems with the recent EPS figures.

There are some bright spots. For example, the Book Value has steadily increased over time. The 10 year growth is not bad at just below 6.5% per year and the 5 year growth figure is very good at just over 12% per year. The other good think is the Liquidity Ratio at 2.38 at the end of 2008 is very good, with the current on at 1.66 still good, but not quite as high. The Asset/Liability ratios are also very good with this ratio being above 2.50 for the last few years. Of course, the real question is, can this company make any money. The answer appears to be yes, as the 5 year growth in stock price and dividends is 12.45% per year. The 10 year growth figure is also not bad at just over 6% per year. This company has done better over the last 5 years than over the last 10 years.

The Return on Equity (ROE) for this company varied a lot also. However, for the last few years, it has been above 11% and this is good. The 5 year average is 10.6% and this is very respectable. I am not interested in this company at the moment, but I intend to keep an eye on. I might be more interest when they start again to raise their dividends.

Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, India and Romania. Marcel Dutil owns 16% of this company. Its web site is www.canamgroup.ws. See my spreadsheet at www.spbrunner.com/stocks/cam.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.

Wednesday, September 16, 2009

Great-West Lifeco Inc 2

I am reviewing this stock (TSX-GWO) today as I have not yet reviewed it and the 2008 year end annual statement has came in. I do not own this stock, but I follow it. It is a favorite with investors who like solid, stable, dividend paying stock. However, if you are investing in Power Financial or Power Corp, you should be aware that this company is mostly owned by Power Financial, which is mostly owned by Power Corp.

When I look at Insider Buying and Insider Selling under this stock, I find for the past year, there was twice as much selling as buying. However, the selling off occurred about September 2008 and there was been more buying than selling since that time. There has been recent buying and the keeping of options since this stock started to rise from the lows of March 2009. This is a positive sign.

When I look at the P/E ratio, I get a current P/E of just over 13. The 5 year average low is about 13. So, the P/E points to a good current price. The forward P/E is just over 10, so this is very good. However, these values are based on what the company is expected to earn in 2009 and 2010, and therefore may or may not be true. It depends on how accurate the estimates I am using. However, I have seen other sites point to a future P/E of around 10.

The current yield is 4.8% and this is higher than the 5 year average of 3.2%. The Price/Book Value was at 55% of the long term average in 2008 and is currently at only 70% of the long term average. These are both good. The current Graham Price is 5% lower than the stock price because of this company is expected not to earn much this year. However, if you look at the Graham Price for 2010, then the price is 10% lower than the Graham Price. Since the book value has always been increasing, the Graham Price is very much affected by what is expected in earnings this year. So it is fair to say that the stock price is close to the Graham Price and this is good.

For the short term and up to the last 5 years, the Financial Index has been under performing the TSX. If you look at the longer term, say 10 years then the Financial Index has done better. However, going even longer term, the indexes are pretty even. This stock’s performance has been, for terms of 10 years and less, in line or slightly below the performance of the Financial Index. The thing to remember when comparing this stock to the TSX, the dividend payments has increased this stock total performance by almost 4% per year.

When I look at analysts’ recommendations, the consensus is a Buy. There are a number of analysts that follow this stock with most recommending a Buy, but there are some Strong Buys and a few Hold ratings also. There are no other recommendations for this stock that I can find. (See my site for information on analyst ratings.) The thing to note is that with most buy consensus ratings, the actual ratings cover ones from Strong Buy to Hold. You will seldom, if ever see a stock with no Hold ratings. The best you will see is more Buys and/or Strong Buys than Holds.

I can see why people like this stock. It is solid, conservative and provides a great dividend. It would also seem that the stock is very reasonably priced. I will not be buying it as I already have sufficient stock in Power Financial.

Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Power Financial Corp owes 65% of this company. Its web site is www.greatwestlifeco.com. See my spreadsheet at www.spbrunner.com/stocks/gwo.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.

Tuesday, September 15, 2009

Great-West Lifeco Inc

I am reviewing this stock (TSX-GWO) today as I have not yet reviewed it and the 2008 year end annual statement has came in. I do not own this stock, but I follow it. It is a favorite with investors who like solid, stable, dividend paying stock. Although the yield on this stock varies, as all others do, but typically this stock pays about a 2.5% yield. It is easy to see why it is a favorite. However, if you are investing in Power Financial or Power Corp, you should be aware that this company is mostly owned by Power Financial, which is mostly owned by Power Corp.

Most growth figures on this company are great for this company. The 10 year return on this company is over 8.5% per year. The 5 year is much worse. It is only 2.5% per year. These figures include the dividend payments. Also, note that the dividend payments have not increased this year yet. They increased half way into 2008, so 2009 actual dividends are higher than 2008, but there has been no increase. At the end of 2008, the stock price was below that of 5 years ago. Currently, the stock price is just above what it was 5 years ago. The other thing to mention is the Asset/Liability ratio. This is 1.11. This is a little above the long term average of 1.09. However, it is inline with other financial corporations.

The Return on Equity (ROE) for this company has been good, generally. The 5 year average at the end of 2008 is 16.6%. However, the ROE for 2008 was much lower than average at 11%. The ROE for the first half of 2009 is also at 11%. 11% is not bad, and we are in a recession in which the financial firms have been hit harder than other types of firms. I am sure that this company will perform just fine in the future as it has in the past. I am not buying any as I have enough of Power Financial.

Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Power Financial Corp owes 65% of this company. Its web site is www.greatwestlifeco.com. See my spreadsheet at www.spbrunner.com/stocks/gwo.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.

Monday, September 14, 2009

Penn West Energy Trust 3

I have again updated my spreadsheet on this stock (TSX-PWT.UN; NYSE-PWE) today. The problem with the spreadsheet I put up on Friday is that it showed mostly figures from Petrofund into Penn West. However, I updated some figures to show Maximum Trust to Petrofund to Penn West. I have now corrected this.

I have left the Maximum Trust to Petrofund to Penn West for new sections on only what dividends I received and for what the year end stock value were. The rest of the figures now only show the transition of Petrofund into Penn West. The Penn West Trust has grown by taking in other funds. So, if you have this stock, the stock would have had a past history, and I think that one past history is as good as any other. The problem is that depending on what past history you use, you could materially affect what you show for long term earnings and values.

There is no way of getting around the above problems. However, being aware of what the spreadsheet is showing is required. The other thing, of course, is that past history is no guide to the future. However, comparing the past of different stocks may give you an idea how a stock could do relative to other stocks in the future. When I look at a stock, I look at the past, the present, and the future. The past you can know. The present is often, but not always, knowable. The future is any ones guess, but the past can guide you on what is possible.

It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is www.pennwest.com. See my spreadsheet at www.spbrunner.com/stocks/pwt.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.

Friday, September 11, 2009

Penn West Energy Trust 2

I am continuing my review of this stock (TSX-PWT.UN; NYSE-PWE) today as I had not previously reviewed it and the 2008 year end annual statement has came in. I also own this stock. I bought this stock in January 1998 and according to Quicken, I have made 6.7% return per year on this stock. Unfortunately, just after I bought this stock, the price plummeted. This is oil and gas, and the price for oil and gas can change rapidly. If I had bought some more at the end of the year, I would have made a lot more on this stock over the years.

When looking at Insider Buying and Insider Selling, I find that there has been little activity, especially of late. There was some selling at the end of 2008 when the shares were over $25 per share. There was also a bit of buying early this year when the stock price was under $10.

When I look at the P/E ratio, I find that it was around 4 at the end of 2008. However, the future P/E for 2010, when this stock is expected to having earnings again, it would be between 30 and 40. This is very high, considering the 5 year average low is just below 19. This stock is not expected to earn any money this year, so you cannot calculate the P/E when the earnings are negative. I have also reloaded my spreadsheet as I got some of the past stock prices wrong.

When I look at analysts’ recommendations, the consensus is a Hold. There are a number of analysts that follow this stock with most recommending a Hold, but there are some underperform ratings also. There are no other recommendations for this stock that I can find. (See my site for information on analyst ratings.)

It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is www.pennwest.com. See my spreadsheet at www.spbrunner.com/stocks/pwt.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.

Thursday, September 10, 2009

Penn West Energy Trust

I am reviewing this stock (TSX-PWT.UN; NYSE-PWE) today as I have not yet reviewed it and the 2008 year end annual statement has came in. I also own this stock. I bought this stock in January 1998 and according to Quicken, I have made 6.7% return per year on this stock. This is purely a play on oil and gas in Alberta. As such, I have very little of it, but it keeps me informed about oil and gas in Alberta.

Most growth figures on this company are not bad. However, when you look at growth in dividends, you should note that the dividends on this stock, as with a lot of oil and gas stock go up and down, depending on what the company is earning. The earnings of this company depend on the price of oil and gas. So the recent cut in dividends does not mean much, because the prices of oil and gas are down.

The other thing to mention is this company has gone through a number of changes since I bought it. The stock I started with was Maximum Energy Trust. My spreadsheet reflects the changes in the stock I bought. If you have bought another fund that had ended up as Penn West, you might have a different result that what I have. I do not have a history of Penn West; I only have a history of the stock I bought.

As with other Income Trust stock, I have separated the Distributable Income and the ratios concerning DI off from the rest of the spreadsheet. Some people think that DI is more important than earnings; however, this is fine as long as you do not confuse the two. When comparing stocks, you must compare apples to apples, so never compare DI and earnings (EPS) as they are very different.

When looking at this stock concerning total growth, that is stock price and dividends, it has had not grown over the last 5 years. This is because the current price is about half of what it was 5 years ago. If you look at this growth over the past 10 years, the figures is 45% growth per year. Dividends have been good and the stock price has grown over this 10 year period. However, I must again caution that these figures concern the stock I own and the changes it has been though. Also note that dividend payments in past years have added a lot to this stock.

The Liquidity Ratio was only 1.04 at the end of 2008. It is now a better 1.24. Not as high as I would like this ratio to be, but the current liabilities can be covered by the current assets. The Asset/Liability Ratio has been consistently high and over 1.50 and this is good.

Probably the last thing to talk about today is the Return on Equity (ROE). This has been very inconsistent and was quite high at 16.2% at the end of 2008, with a 5 year average of 12.2%. For the latest quarter of June 2009, there is no ROE as the stock lost money. This has brought the 5 year average down to just 8.4%. I expect that this stock will continue to be inconsistent in its ROE. The price of oil and gas does fluctuate a lot. By having this stock, it helps me keep track of the oil and gas business in Alberta, which I think is very important to the Canadian economy.

It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is www.pennwest.com. See my spreadsheet at www.spbrunner.com/stocks/pwt.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.

Wednesday, September 9, 2009

Enbridge Income Fund 2

I am reviewing this stock (TSX- ENF.UN) today as I have updated my spreadsheet with the December 2008 annual report and I have never blogged on this stock. It is a stock I follow, but I do not own it.

When looking at Insider Buying and Insider Selling, I find there is no activity whatsoever. There is a major owner, holding just over 40% of there units. This is Enbridge Incorporated. I have reviewed this as Enbridge Inc. on my site and blog.

When I look at the P/E ratio, I find that it was 17 at the end of 2008 and it is 19 now. This is fairly high, although the 5 year average low is 19.5. The P/E ratio on this stock has been quite high, and it has come down substantially over the 6 years of existence for this stock. If you look at the Price/Book Value, at the end of 2008 ratio was about 93% of the 10 year average. However, currently, the P/BV ratio is, at 1.66, higher than the 10 year average of 1.47.

The problem with this stock is the steady decline in the Book Value. This stock is paying, on average, some 39% of the cash flow in distributions. You would expect some increase in Book Value, yet, on average, the Book Value is declining at the rate of 4.5% per year.

The current price is about 36% higher than the Graham Price. At then end of the accounting year of December 2008, the stock price was at the Graham Price. The problem here again is the declining Book Value. Also, this stock is not expected to earn in 2009 anywhere near the earnings of 2008.

When I look at analysts’ recommendations, the consensus is a Hold. There are few analysts that follow this stock with most recommending a Hold. However, there are also Underperform and Sell recommendations on this stock. There are no other recommendations for this stock. (See my site for information on analyst ratings.)

I like stocks that you can buy and hold and not worry too much about. Considering the decreasing Book Value on this stock and that fact that most Income Trust will not survive the changes in the Tax regime, I can see no reason personally that I would want to buy this stock.

The Enbridge Income Fund assets are a 50% interest in the Alliance Canada Pipeline and a 100% interest in Enbridge Pipelines (Saskatchewan) Inc. They also have Green Power assets, which include a 50% interest in NRGreen Power Limited Partnership. NRGreen operates electrical generation facilities using waste heat, and holds interest in three wind power projects in Western Canada. Just over 40% of the trust units are owned by Enbridge Inc. Its web site is www.enbridgeincomefund.com. See my spreadsheet at www.spbrunner.com/stocks/enf.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.

Tuesday, September 8, 2009

Enbridge Income Fund

I am reviewing this stock (TSX- ENF.UN) today as I have updated my spreadsheet with the December 2008 annual report and I have never blogged on this stock. It is a stock I follow, but I do not own it.

I try to get at least 11 years of data on a company. However, with this company I have only 6 years of data. This is because this income trust was only set up in June of 2003. So, for the growth figures, looking at the last 5 years, I find that most are good. The exceptions are, of course, the stock price growth. The stock price is lower than what it was 5 years ago. However, if you add in distributions from this stock, you get a return of just over 3.6% per year. At the moment, this is not a bad return.

The other growth figure that is sad is the growth in Book Value and this is not existent. A lot of income trust stocks are like this. Because they payout so much of their cash value, the Book Value does not grow. The other growth figures are good, especially the distribution growth which has average growth of just under 5% per year over the past 5 years.

When I look at liquidity, I find the ratio to be very low. It currently sits at 0.29. It was also low at the end of 2008 where it sat at 0.31. The 5 year average is low, which is 0.64, is not as bad, but it is still low. When this ratio is below 1.00, it means that the current assets can not cover the current liabilities. The Asset/Liability ratio is also low at 1.15. However, it is over 1.00. I prefer to see both these ratios at 1.50.

The Return on Equity (ROE) is also fairly low. The 5 year average at the end of 2008 was 7.2%. The ROE at the end of 2008 was a better at 8.4%. The ROE for the first half of 2009 is also low at 5.3%. The accrual ratio for both the end of 2008 and for the first half of 2009 is negative and this is good. However, this cannot make up for the low liquidity ratio.

The good think about this stock is that it has raising revenues, earnings and distributable cash. The average yield on this stock is around 8% and the current yield is just over 9.5%. The current negatives include a very low liquidity ratio and decreasing book value. Tomorrow, I will talk about what the analysts say and about the spreadsheet ratios.

The Enbridge Income Fund assets are a 50% interest in the Alliance Canada Pipeline and a 100% interest in Enbridge Pipelines (Saskatchewan) Inc. They also have Green Power assets, which include a 50% interest in NRGreen Power Limited Partnership. NRGreen operates electrical generation facilities using waste heat, and holds interest in three wind power projects in Western Canada. Just over 40% of the trust units are owned by Enbridge Inc. Its web site is www.enbridgeincomefund.com. See my spreadsheet at www.spbrunner.com/stocks/enf.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.

Friday, September 4, 2009

Barclays Bank PLC ADR 2

I am continuing my review this stock (NYSE-BCS) today as I have not yet reviewed it and the 2008 year end annual statement has came in. I also own this stock. According to Quicken, I have made a return of 2.25% per year in Canadian currency terms on this stock since I bought it in March 2000. On a US currency basis, I have made 5.5% per year. This bank has been hard hit by recent economic problems. This is the only foreign stock I own.

It took me a while to find information on Insider Buying and Insider Selling on this stock. What I found eventually, was there has been no insider trading activity within the last 6 months. For Canadian stock, I can find out about Insider trading for the last year, but it is harder to find such things out on foreign stock. I also found out that there is no person who owns more than 1% of the shares on this stock.

I can obtain my spreadsheet ratios and the Graham Price because I have a spreadsheet. It is also a bit confusing as I am dealing with 3 different currencies. First, for the P/E ratio I get a current P/E ratio of 16 and a forward (2010) P/E ratio of 11.5. These seem to be in line what others get. My spreadsheet shows that the 5 year average is 16.5 and the 5 year low is 13.5. I am doing the P/E ratios in US currency. The current P/E ratio is ok, but it is certainly not low.

When I look at the Graham Price I find that current price is about 55% less the Graham Price, using the UK Pound and 58% less the Graham Price using the US$. There are difference is what earnings are expect on this stock in US$ and UK £. There are often differences in stock prices between US markets and UK markets that cannot be accounted for simply by the difference in these currencies.

The Price/Book Value Ratio looks very good, whereby the currency ratio is only 40% of the 10 year average in UK £. This ratio was very low at the end of 2008, the last statement reporting date. However, at the end of 2008, the stock price was very low. This stock price is up more than 130% in US$ and up more than 145% in UK£. The last ratio to talk about is the Accrual Ratio. At the end of April 2008, it was negative and this is good. After the 2nd quarter of 2009, it is still low at 2%. This is in UK£. However, this ratio does not change with currency.

Looking at the charts, I compared this stock to the DJ Financial Index, as this seems to be the most appropriate one. What I find is that for all periods, except those shorter than 1 year, this stock has done as well as the DJ Financial Index. For periods shorter than 1 year, this stock has done much better than the DJ Financial Index.

When I look at analysts’ recommendations, the consensus is a Hold in the US and a Buy in Canada. There appear to be ratings of Buy, Hold and Sell on this stock. It is hard to know how many analysts are following this stock, but there certainly are some. (See my site for information on analyst ratings.)

As I said yesterday, I am not planning on selling at the present time. But then I do not have much invested and by this investment, I get to see what is happening in banking outside of Canada.

This is a bank. Barclays is a global financial services provider, engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services all over the world. Its web site is www.barclays.com. See my spreadsheet at www.spbrunner.com/stocks/bcs.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.

Thursday, September 3, 2009

Barclays Bank PLC ADR

I am reviewing this stock (NYSE-BCS) today as I have not yet reviewed it and the 2008 year end annual statement has came in. I also own this stock. According to Quicken, I have made a return of 2.25% in Canadian currency terms on this stock since I bought it in March 2000. This bank has been hard hit by recent economic problems.

This is the only foreign stock I own. It is much more difficult to figure out how much you are actually earning in Canadian dollars in foreign investments. This one is quite tough as the company reports in UK pounds, but I have it in a US currency account. I have bought US dollar ADRs on this company via the NYSE. ADR stands for American depositary receipt. 1 ADR on this company is worth 4 shares of the company.

It is not that I lack foreign content in my portfolio. It is just that I tend not to own foreign stock. However, I generally get foreign content by owning stock on Canadian companies that do business world wide, or do business in US as well as Canada.

Most growth figures on this bank are not bad. However, it does not matter what currency you look at, this bank stock has lost money over the last 5 year period and has barely made any over the last 10 years. These figures include dividends. The stock price is currently lower than what it was 10 years ago. The only other growth figure to comment on is the growth in cash flow. As with every other bank, cash flow is all over the place and is often negative.

The other thing to mention is dividends. There was good dividend growth until 2009. They used to pay dividends semi-annually. The first semi-annual dividend due in April of 2009 was not paid. The bank has promised to reinstate dividends on a quarterly basis in the second half of 2009. They have not yet said what amount the dividend will be.

When looking at the Asset/Liability ratio on this stock, it is currently at 1.03 and this is pretty typical of a bank. A good ratio on this stock is the Accrual Ratio. It is usually low and it is often negative.

This stock certainly crashed with the stock market. It has since made a good recovery. However, the stock price is still a fair bit off the price it was in 2006 and 2007. I expect that it was continue to recover. I am not planning on selling at the present time. But then I do not have much invested and by this investment, I get to see what is happening in banking outside of Canada.

This is a bank. Barclays is a global financial services provider, engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services all over the world. Its web site is www.barclays.com. See my spreadsheet at www.spbrunner.com/stocks/bcs.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.

Wednesday, September 2, 2009

Alimentation Couche-Tard Inc. 2

I am continuing my review this stock (TSX- ATD.B) today as I received the April 2009 annual report and I have not reviewed it since I received this report. I first bought this stock in January 2004 and bought more in December 2006 and June 2007. I said yesterday that I had made a return of 3.5%, including dividends on this stock. I had not realized that this stock has recently spiked higher. I updated my quicken data and looking at quicken with the latest price I have a return of 6.3%.

When looking at Insider Buying and Insider Selling, I find only Insider Selling. This selling is of options by an officer of the company. I do not think this means anything. It is always hard to speculate why insiders sell their shares. However, a lot of options given out are sold. Makes you wonder if giving out options is a good idea. I thought the idea was so that management has a stake in the company. However, if they turn around and sell the options as soon as they can, I do not really see why they should be given options.

Also, please note that over 60% of this company is owned by two companies. Metro Incorporated, a stock I also follow, owns 22%. Also over 40% of company is owned by DĂ©veloppements Orano Inc. The major shareholder of this last company is the CEO of Alimentation Couche-Tard Incorporated.

However, let’s go on to talk about the spreadsheet ratios and the Graham Price. First, the P/E ratio is relatively low at 13. For this stock, the 5 year average low is 14. The dividend yield at .73% is equal to the average. Please note on this stock, dividends only started in 2006. The dividend yield has been very low from the beginning. They pay out a very small proportion of their cash flow. A bad sign is that they have not increased their dividends in the year ending April 2009. It is the same as for the year that ended in April 2008. Considering the yield and the percentage of cash flow paid out, you got to wonder if this should really be considered a dividend paying stock.

The current price is about 15% higher than the Graham Price. At then end of the accounting year of April 2009, the stock price was lower than the Graham Price. This is considered a growth stock, and as such, the stock price is usually higher than the Graham Price. The stock price over the past 10 years has averaged about 50% higher than the Graham Price. When dealing with stocks, most things are all relative.

The Price/Book Value Ratio looks very good, whereby at the end of April 2009, this ratio was only 55% of the 10 year average. Today, it is still good at just 80% of the 10 year average. The last ratio to talk about is the Accrual Ratio. At the end of April 2009, it was negative and this is good. However, when I calculated this for the first quarter of 2010, it is at 11% and this is very high. However, the year is not yet over. The last thing to talk about is the Return on Equity. The 5 year average ROE is a healthy 18.7% and looking at the ROE for the 1 quarter, it would appear this year will be above this 5 year average.

If you look at the charts, you will see that this stock has gained a lot lately. From a low in the first part of July, it has spiked over 45%. When compared to the TSX index and the Consumers Staples Index, this stock has done better than both these indexes for all periods, but for the 3 year period. If you look at the long term of 10 years, it has done much better than both of these indexes.

When I look at analysts’ recommendations, the consensus is a Buy. There are quite a few analysts that follow this stock. There are many Buys and Holds and a few Strong Buys on this stock. (See my site for information on analyst ratings.) A number of analysts have recently changed their Hold rating to a Buy rating because of the strong 1st quarterly results for this company.

I do not have a lot of this stock, but I will retain what I have currently.

Alimentation Couche-Tard is Canada’s leading convenience store retailer under brands such as Couche-Tard, Mac’s, Becker’s, Mike’s Mart and has US brand Circle K. The company has alliances with fast-food chains including M & M Meat Shops, Pizza Pizza , Subway and Irving Oil. They just opened up Circle K brand in Vietnam. They are expanding into the U.S., having bought Johnson Oil, a major gas station and convenience store operator. Its web site is www.couche-tard.com. See my spreadsheet at www.spbrunner.com/stocks/atd.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.

Tuesday, September 1, 2009

Alimentation Couche-Tard Inc.

I am reviewing this stock (TSX- ATD.B) today as I received the April 2009 annual report and I have not reviewed it since I received this report. I first bought this stock in January 2004 and bought more in December 2006 and June 2007. I have made a return of 3.5%, including dividends. This is, of course, a lousy return. However, this is a retail stock and we have been in a recession. Because of the great first quarter of July 2009, some analysts have been revising their estimates upward. Some have also been revising their recommendations upwards to a buy.

This is another Canadian stock that reports in US dollars. The strengthening Canadian dollar will also affect this stock’s performance in Canadian currency. The stock has done better in US currency. However, if you look at the growth figures for this stock, they are all good except for the stock price. The last bear market did not seem to affect their stock price or their earnings. However, it is different in this latest bear market, as the stock price has dipped a lot. In this one also, their earnings have dipped. They started to pay dividends after the last bear market, so we do not have a long record concerning dividends. They have kept their dividends level over the past two years.

Turning to the Asset/Liability ratios, I find the A/L Ratio high and it has a long term average over 1.64, where anything at 1.50 and above is good. The liquidity ratio is a bit different. It is often low, but over 1.00. The long term average is just 1.06. This ratio was 1.07 at the last annual report of April 2009. For the last quarter, it was better at 1.15. Here again what you want to see is a ratio of 1.50 and above. A ratio of 1.00 is ok, but leaves little margin of current assets over current liabilities. These ratios will be the same no matter what currency you are dealing with.

This stock is currently not performing well for me, but I expect it to do a lot better in the long term.

Alimentation Couche-Tard is Canada’s leading convenience store retailer under brands such as Couche-Tard, Mac’s, Becker’s, Mike’s Mart and has US brand Circle K. The company has alliances with fast-food chains including M & M Meat Shops, Pizza Pizza , Subway and Irving Oil. They just opened up Circle K brand in Vietnam. They are expanding into the U.S., having bought Johnson Oil, a major gas station and convenience store operator. Its web site is www.couche-tard.com. See my spreadsheet at www.spbrunner.com/stocks/atd.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.