On Monday, I will talk about how to start up a portfolio, or what to include in a small portfolio of dividend paying stocks. It is good to talk about individual stocks, as I usually do, but to invest, you have to start somewhere. Today, I will continue my reviewing this stock (TSX-L) as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not currently own this stock.
I first looked at the Insider Buying and Insider Selling on this stock. Some director bought a small amount back in May 2009 for just over $35.00 a share. There has been no activity since them. So there is not much information here.
The next thing to look at is the ratios. The most common ratio to use is the P/E ratio. I get a ratio of 13.4 using the current price and the estimated earnings for 2009. Sites that use the last 12 months earnings get a slightly lower P/E of around 12.5. This is not a bad P/E. Also, the 5 year low average is 18.9. I noticed that the stock market has fallen a lot today. This is great. There might be some very good buying opportunities for investors, before we get to the start of the year end rally.
Another ratio to look is the Price/Cash Flow ratio. This was 9.7 at the end of 2008 and based on cash flow estimates it is now just 7. The 5 year average is 10.5, so the current one is saying price is relatively good. Another well-liked ratio is the Price/Book Value. The currently ratio is only 44% of the 10 year average. A good price is one where the ratio is less than 80% of the 10 year average. The value of this is that we know what the book value is and we know what the current price is. This ratio is unlike P/E and Price/Cash Flow ratios where we are dealing with estimates for the earnings and cash flow.
I will next talk about the yield. A lot of dividend stock investors like to buy based on yield rather than P/E. This is, of course, just another way of looking a how to tell if the stock price is good. For this stock, the yield is now 2.8%. The 5 year average is 1.8% and the 10 year average is even lower at 1.3%. The yield is the one item we want to be higher than average. For most ratios, we want the current one to be lower than average.
The next thing to look at is the Graham Price. I get a Graham Price of $30.86 for the end of 2008 and a currently one of $33.04 based on expected earnings for 2009. The current price of $29.91 is lower than either of these Graham Prices. This is showing that the current stock price is good. I had not included the Graham Price calculations in the spreadsheet I loaded yesterday, so I will reload this spreadsheet today.
When I look at analyst recommendations, I see Strong Buys, Buys and Hold recommendations. The consensus recommendation will be a Buy. However, I know that there are quite a number of analysts following this stock and quite a number have a Hold rating on this stock. (See my site for information on analyst ratings.)
I think you get Buy ratings because food is something that everyone will buy. It does not matter that we are in recession or not, people still need food. Some analysts feel that food stores are a recession proof business and are rating food stores a buy. I think there are lots of Hold ratings on this stock because people are worried about the competitive environment that Loblaw operates in. Certainly, Loblaw does not seem to the confidence to raise it dividend.
Loblaw, a subsidiary of George Weston Limited, is Canada’s largest food distributor and a leading provider of general merchandise, drugstore and financial products and services. Corporate owned store banners include Atlantic Superstore, Dominion(1) (in Newfoundland and Labrador only), Extra Foods, Loblaw, Maxi, Maxi & Cie, Provigo, the Real Canadian Superstore and Zehrs and wholesale outlets operating as Cash & Carry, Presto and The Real Canadian Wholesale Club. The Company’s franchised and associated stores operate under the trade names Atlantic SaveEasy, Fortinos, no frills, SuperValu, Valu-mart and Your Independent Grocer. W. Galen Weston and George Weston Ltd own 63% of this company. Its web site is www.loblaw.com. See my spreadsheet at www.spbrunner.com/stocks/lob.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, October 30, 2009
Thursday, October 29, 2009
Loblaw Companies Ltd
I am reviewing this stock (TSX-L) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. I used to own this stock, but sold it in 2007, because it was in trouble and I thought I could employ my money better elsewhere. They had stopped increasing their dividend in 2006. I held this stock from 1996 to 2007 and made a total return per year of just over 10%. I am still tracking this company as I feel that they might once again be a good investment when they can start to increase their dividends.
The growth figures for most items are not bad for the 10 year period, but usually awful for the last 5 years. For example, the growth in revenues for the last 5 years is just over 4% per year. The 10 year figure is better at just over 9% per year. Cash Flow from Operations was almost -1% per year for the last 5 years and just over 5% per year for the last 10 years. If you have invested in this stock for the last 5 years, you would not have made any money. The stock hit a peak in 2005 and has been treading downward ever since. It started to rise in March of this year, but has been falling since May 2009. Most Consumer Staple stocks have not done well this year.
The one good thing to say about this stock is that the Liquidity Ratio as been raising steadily and it is, as of the 2nd quarter, at 1.31. The Asset/Liability Ratio has always been better than the Liquidity Ratio and is at 1.75. Anything above 1.50 is good. The other good thing to say about this stock is the Accrual Ratio is negative and has been negative for the last few years. It currently stands at just below 0%. The last thing to talk about is the Return on Equity. This has also been raising since it hit a low of -4% in 2006 and for the end of 2008 it was at 9.3% and for the 2nd quarter of 2009 is it even better at 10%.
I think that Loblaw is in a tough market and most analysts expect it to do better in the future. As I had said before, I will again consider this stock when it can start to raise it dividends yearly. I will review what the analysts are saying on this stock tomorrow.
Loblaw, a subsidiary of George Weston Limited, is Canada’s largest food distributor and a leading provider of general merchandise, drugstore and financial products and services. Corporate owned store banners include Atlantic Superstore, Dominion(1) (in Newfoundland and Labrador only), Extra Foods, Loblaw, Maxi, Maxi & Cie, Provigo, the Real Canadian Superstore and Zehrs and wholesale outlets operating as Cash & Carry, Presto and The Real Canadian Wholesale Club. The Company’s franchised and associated stores operate under the trade names Atlantic SaveEasy, Fortinos, no frills, SuperValu, Valu-mart and Your Independent Grocer. W. Galen Weston and George Weston Ltd own 63% of this company. Its web site is www.loblaw.com. See my spreadsheet at www.spbrunner.com/stocks/lob.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.
The growth figures for most items are not bad for the 10 year period, but usually awful for the last 5 years. For example, the growth in revenues for the last 5 years is just over 4% per year. The 10 year figure is better at just over 9% per year. Cash Flow from Operations was almost -1% per year for the last 5 years and just over 5% per year for the last 10 years. If you have invested in this stock for the last 5 years, you would not have made any money. The stock hit a peak in 2005 and has been treading downward ever since. It started to rise in March of this year, but has been falling since May 2009. Most Consumer Staple stocks have not done well this year.
The one good thing to say about this stock is that the Liquidity Ratio as been raising steadily and it is, as of the 2nd quarter, at 1.31. The Asset/Liability Ratio has always been better than the Liquidity Ratio and is at 1.75. Anything above 1.50 is good. The other good thing to say about this stock is the Accrual Ratio is negative and has been negative for the last few years. It currently stands at just below 0%. The last thing to talk about is the Return on Equity. This has also been raising since it hit a low of -4% in 2006 and for the end of 2008 it was at 9.3% and for the 2nd quarter of 2009 is it even better at 10%.
I think that Loblaw is in a tough market and most analysts expect it to do better in the future. As I had said before, I will again consider this stock when it can start to raise it dividends yearly. I will review what the analysts are saying on this stock tomorrow.
Loblaw, a subsidiary of George Weston Limited, is Canada’s largest food distributor and a leading provider of general merchandise, drugstore and financial products and services. Corporate owned store banners include Atlantic Superstore, Dominion(1) (in Newfoundland and Labrador only), Extra Foods, Loblaw, Maxi, Maxi & Cie, Provigo, the Real Canadian Superstore and Zehrs and wholesale outlets operating as Cash & Carry, Presto and The Real Canadian Wholesale Club. The Company’s franchised and associated stores operate under the trade names Atlantic SaveEasy, Fortinos, no frills, SuperValu, Valu-mart and Your Independent Grocer. W. Galen Weston and George Weston Ltd own 63% of this company. Its web site is www.loblaw.com. See my spreadsheet at www.spbrunner.com/stocks/lob.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, October 28, 2009
CI Financial 2
I am continuing my review this stock (TSX-CIX) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. This company has lost it listing on the dividend lists I follow because of the cut in dividends.
One of the things I always look at in the second part of my report is the Insider Buying and Insider Selling reporting. On this stock, it is a bit troubling as there is quite a bit of insider selling by CEO, CFO and other officers. Most of this insider selling was done a while ago (i.e. back in June of this year), but the amount of it, together with the fact there was no buying makes me think that all is not well.
I know that a lot of people do not like stocks that cut their dividend. If you own such a stock, you got to decide if you should sell, continue to hold or buy more. For example, when Manulife cut their dividends this year I decided to continue to hold what I had. When TransCanada cut their dividend in 2000, I decided that it was time to buy. With this stock, it would seem the dividend cut has had little effect. When you look at this stock on the charts compared to the TSX over the past couple of years, it has basically followed the same pattern as the TSX. That is, the dividend cut did not seem to discourage people from pushing up the stock price from the March 2009 lows.
When I look at the P/E ratio, I get 23 for 2009 and 17.8 for 2010. Sites that do the P/E on earnings to date (and not earnings estimates) get a current P/E around 19. Generally speaking, a P/E of 10 says the stock is a good buy. A P/E of 19 is a bit rich; however, this stock has had a tendency towards a rather high P/E. When I look at the Price/Cash Flow ratio, I find the current one to be 13 where the 10 year average is just above 13. The problem with both these ratio is that they are based on estimates for 2009.
In looking at yield, I get one of 2.5% for 2009. The 5 year average is over 5%, but this is because of very high yields in 2007 and 2008. A yield of 2.5% is probably not a bad yield for this stock. The one ratio that says the stock is at a good price is the Price/Book Value ratio. When the current ratio is less than 80% of the 10 year average, this is a good buy signal. The current Price/Book Value ratio is only some 45% of the 10 year average. Note that these ratios are not based on estimates, but on current dividends, book value and stock price.
The last value to look at is the Graham price. The Graham Price at the end of 2008 was $14.00. Currently it is $10.21. It decreased mainly because of the current earnings estimates. The stock price of $19.39 is some 90% higher than the Graham price. However, if you look at the average difference between the stock price and the Graham Price you get a value of over 200%. So, on a relative basis, the stock price is closer than normal to the Graham Price. On an absolute basis, the stock price is way above the Graham Price.
When I look at analyst’s recommendations, I find the vast majority to be a Hold. However, I did find one Strong Buy. However, because of the number of Hold recommendations, this stock comes with a consensus of a Hold. (See my site for information on analyst ratings.) It is interesting that the consensus recommendation I found in February 2009 was also a Hold. However, this was because there was lots of Hold ratings and one reduce or underperform rating. If you look at the chart on this stock, it would appear that this recommendation was widely ignored as this stock climb in value from the March 2009 lows in the same manner as the TSX index.
The other negative to mention is that the earnings estimates I got for this stock now are lower, compared to the ones I got in May 2009. This is often a negative sign. The real thing to note is that the TSX is again lower today, with high volumes. This points that perhaps the fall stock market decline is on and we might be able to pick up stocks at good prices in the near future. There are also sorts of mixed signals on the price of this stock, but this may change if we have a good stock market decline this fall.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., United Financial Corporation, Assante Wealth Management, KBSH Capital Management, and Stonegate. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is www.ci.com. See my spreadsheet at www.spbrunner.com/stocks/cix.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.
One of the things I always look at in the second part of my report is the Insider Buying and Insider Selling reporting. On this stock, it is a bit troubling as there is quite a bit of insider selling by CEO, CFO and other officers. Most of this insider selling was done a while ago (i.e. back in June of this year), but the amount of it, together with the fact there was no buying makes me think that all is not well.
I know that a lot of people do not like stocks that cut their dividend. If you own such a stock, you got to decide if you should sell, continue to hold or buy more. For example, when Manulife cut their dividends this year I decided to continue to hold what I had. When TransCanada cut their dividend in 2000, I decided that it was time to buy. With this stock, it would seem the dividend cut has had little effect. When you look at this stock on the charts compared to the TSX over the past couple of years, it has basically followed the same pattern as the TSX. That is, the dividend cut did not seem to discourage people from pushing up the stock price from the March 2009 lows.
When I look at the P/E ratio, I get 23 for 2009 and 17.8 for 2010. Sites that do the P/E on earnings to date (and not earnings estimates) get a current P/E around 19. Generally speaking, a P/E of 10 says the stock is a good buy. A P/E of 19 is a bit rich; however, this stock has had a tendency towards a rather high P/E. When I look at the Price/Cash Flow ratio, I find the current one to be 13 where the 10 year average is just above 13. The problem with both these ratio is that they are based on estimates for 2009.
In looking at yield, I get one of 2.5% for 2009. The 5 year average is over 5%, but this is because of very high yields in 2007 and 2008. A yield of 2.5% is probably not a bad yield for this stock. The one ratio that says the stock is at a good price is the Price/Book Value ratio. When the current ratio is less than 80% of the 10 year average, this is a good buy signal. The current Price/Book Value ratio is only some 45% of the 10 year average. Note that these ratios are not based on estimates, but on current dividends, book value and stock price.
The last value to look at is the Graham price. The Graham Price at the end of 2008 was $14.00. Currently it is $10.21. It decreased mainly because of the current earnings estimates. The stock price of $19.39 is some 90% higher than the Graham price. However, if you look at the average difference between the stock price and the Graham Price you get a value of over 200%. So, on a relative basis, the stock price is closer than normal to the Graham Price. On an absolute basis, the stock price is way above the Graham Price.
When I look at analyst’s recommendations, I find the vast majority to be a Hold. However, I did find one Strong Buy. However, because of the number of Hold recommendations, this stock comes with a consensus of a Hold. (See my site for information on analyst ratings.) It is interesting that the consensus recommendation I found in February 2009 was also a Hold. However, this was because there was lots of Hold ratings and one reduce or underperform rating. If you look at the chart on this stock, it would appear that this recommendation was widely ignored as this stock climb in value from the March 2009 lows in the same manner as the TSX index.
The other negative to mention is that the earnings estimates I got for this stock now are lower, compared to the ones I got in May 2009. This is often a negative sign. The real thing to note is that the TSX is again lower today, with high volumes. This points that perhaps the fall stock market decline is on and we might be able to pick up stocks at good prices in the near future. There are also sorts of mixed signals on the price of this stock, but this may change if we have a good stock market decline this fall.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., United Financial Corporation, Assante Wealth Management, KBSH Capital Management, and Stonegate. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is www.ci.com. See my spreadsheet at www.spbrunner.com/stocks/cix.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, October 27, 2009
CI Financial
I am reviewing this stock (TSX-CIX) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. This company has lost it listing on the dividend lists I follow because of the cut in dividends for this year.
When I look at the growth figures to the end of 2008, they are all great. However, these growth figures will come down for all the items I follow. For example, the growth figures for dividends will come significantly down in 2009 because of the recent dividend cut. The growth figures for dividends to the end of 2008 were 42% per year and 75% per year for the 5 and 10 year period. If they pay the dividends that are currently expected, these figures will be 8.5% per year and 65% per year for the 5 and 10 year period.
Even the book value is currently slightly below that at the end of 2008. This company will not produce good figures for 2009 and possibly 2010. However, it suffered problems also in the last bear market and recovered nicely. The company is in the mutual fund business and this business does not do well in bear markets. Not only the value of the funds they have under management decline with the bear market, a lot of investors get scared and cash in their investments.
Turning to the liquidity ratios, I find this ratio has always been quite low. That is, it is usually be 1.00. The liquidity for this stock has improved for the 2nd quarter of 2009 and now stands at 0.93. At the end of 2008, it was 0.87. The 5 and 10 year averages for the liquidity ratio is only 0.90 and 0.96. The Asset/Liability ratio is much better at 1.80. This has not moved since the end of 2008.
The Return on Equity or ROE for this stock is generally very good. The 5 year average is over 24%. The ROE will come in this year probably far below this average and currently stands at just under 14%. The good thing that I see is that the current accrual ratio is almost -5%.
This stock can earn its investors money over the long term. The returns also have a high dividend portion. It is often said that investors can make more money investing a Mutual Fund company than investing in Mutual Funds. The main problem, as I see it is that this sort of company will be hit hard by a bear market. So if you invest in one, you have to be prepared for this. Tomorrow I will look at what the analysts are saying.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., United Financial Corporation, Assante Wealth Management, KBSH Capital Management, and Stonegate. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is www.ci.com. See my spreadsheet at www.spbrunner.com/stocks/cix.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.
When I look at the growth figures to the end of 2008, they are all great. However, these growth figures will come down for all the items I follow. For example, the growth figures for dividends will come significantly down in 2009 because of the recent dividend cut. The growth figures for dividends to the end of 2008 were 42% per year and 75% per year for the 5 and 10 year period. If they pay the dividends that are currently expected, these figures will be 8.5% per year and 65% per year for the 5 and 10 year period.
Even the book value is currently slightly below that at the end of 2008. This company will not produce good figures for 2009 and possibly 2010. However, it suffered problems also in the last bear market and recovered nicely. The company is in the mutual fund business and this business does not do well in bear markets. Not only the value of the funds they have under management decline with the bear market, a lot of investors get scared and cash in their investments.
Turning to the liquidity ratios, I find this ratio has always been quite low. That is, it is usually be 1.00. The liquidity for this stock has improved for the 2nd quarter of 2009 and now stands at 0.93. At the end of 2008, it was 0.87. The 5 and 10 year averages for the liquidity ratio is only 0.90 and 0.96. The Asset/Liability ratio is much better at 1.80. This has not moved since the end of 2008.
The Return on Equity or ROE for this stock is generally very good. The 5 year average is over 24%. The ROE will come in this year probably far below this average and currently stands at just under 14%. The good thing that I see is that the current accrual ratio is almost -5%.
This stock can earn its investors money over the long term. The returns also have a high dividend portion. It is often said that investors can make more money investing a Mutual Fund company than investing in Mutual Funds. The main problem, as I see it is that this sort of company will be hit hard by a bear market. So if you invest in one, you have to be prepared for this. Tomorrow I will look at what the analysts are saying.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., United Financial Corporation, Assante Wealth Management, KBSH Capital Management, and Stonegate. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is www.ci.com. See my spreadsheet at www.spbrunner.com/stocks/cix.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, October 26, 2009
Money Show 2009 5
On Friday, I said I would talk about the 2nd panel I went to at the Money Show. This panel was on how to invest for safety and growth. This panel was composed of Roger Conrad, Aaron Dunn, Benj Gallander and John Stephenson. Roger Conrad was the moderator and also a panelist. He was the one asking the questions for the panelist to answer. He wanted to know what stocks they recommended, where they saw the market going and what stocks they did not like. Roger Conrad is the editor of Utility Forecaster and the Canadian Edge, two US publications. Aaron Dunn is the Senior Equity Analyst for Keystone Publishing Corp, a publisher of Canadian investment newsletters. Benj Gallander is President of Contra the Heard Investment newsletter. John Stephenson is Senior Vice President and Portfolio Manager with First Asset Investment Management Inc. He has recently published a book called “Shell Shocked – How to Invest after the Collapse.
John Stephenson was first to answer the questions. The stock John liked best was Enbridge (TSX-ENB). He said Trans Canada Corp (TSX-TRP) was ok and said he also liked Suncor Energy (TSX-SU) and Canadian Natural Resources (TSX-CNQ), but that the last too were riskier. John expects the US market to go sideways for a while with a lot of consumers sitting on the sidelines. Apparently, in the US, until recently the financial services sector represented 40% of the GDP. This sector was hit by the current recession and will be a problem for sometime to come. He expects the Canadian market to be more volatile, but to go higher. When asked what he recommends people not to buy, he said US Financials. He also said we should be very selective with Income Trust stocks. He said that the high yields are a warning. We should stay away from small business income trusts and power trusts and REITS.
The next panelist to answer questions was Aaron Dunn. He said that his company likes to focus on small cap stock with real business. They are not bullish at this time, and they feel you must currently stick with quality. He recommended K-Bro Linen Income Fund (TSX-KBL.UN), which he said was the largest independent linen service company. Aaron was not optimistic about the market. He said that the US has over consumed for years and years and now must under consume for years and years to get back to a health balance sheet. He is a bit bearish. He said to be selective in stock purchases and to expect another correction. Aaron does not like retail stock, index stock, junior mining and high tech stocks. He also said we should stay away from any company that will depend on the equity market for capital.
The last panelist to speak was Benj Gallander. He recommended Bell Canada (which I assume he meant BCE; TSX-BCE) and Consumers Waterheater Fund (TSX-CWI.UN). He considers Consumers more risky as they just cut their dividend. He said that analysts often like stocks that have gone up in value, but he considers this risky. Benj said that he has no idea on where the market is going. Government spending to stimulate the economy was good. However, the Ontario and our Federal governments are going to have big deficits and this will have to be fixed. He said the US government has thrown all sorts of money all over the place. Their high deficit and debt cannot continue. He expects much volatility in the US market. Benj does not like guaranteed mutual funds and bond funds. Interest rates are going to go up and bond funds always do poorly when interest rates rise.
Roger Conrad recommended Ag Growth International (TSX-AFN), Arc Energy (TSX-AET.UN) and Pembina Pipeline (PIF.UN). He said that the dividends paid by Arc Energy would be determined by the price of oil and gas, not the change to the company’s structure. (Also, note that he was one of many who recommended Pembina Pipeline. This Pipeline has promised not to keep their dividend the same for the next 5 years.) Roger feels that the US unemployment picture will remain bad. He said that in the US Corporation debt, even for utilities, was, not long ago, 600 basis points over government debt. This has now come down to 200 basis points over government debt. This is a positive sign. However, he feels that US citizens are still very worried. Rogers feels that we should be carefully looking at company earnings and ensure our companies have enough to cover dividends and debt servicing. He also said to stay away from long term bonds. He thinks that the US government is motivated to understate inflation. He also feels that the US will use inflation to buy off it debts. This is what it did for debts of WWII and the Vietnam War.
Tomorrow I will go back to looking at stock.
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.
John Stephenson was first to answer the questions. The stock John liked best was Enbridge (TSX-ENB). He said Trans Canada Corp (TSX-TRP) was ok and said he also liked Suncor Energy (TSX-SU) and Canadian Natural Resources (TSX-CNQ), but that the last too were riskier. John expects the US market to go sideways for a while with a lot of consumers sitting on the sidelines. Apparently, in the US, until recently the financial services sector represented 40% of the GDP. This sector was hit by the current recession and will be a problem for sometime to come. He expects the Canadian market to be more volatile, but to go higher. When asked what he recommends people not to buy, he said US Financials. He also said we should be very selective with Income Trust stocks. He said that the high yields are a warning. We should stay away from small business income trusts and power trusts and REITS.
The next panelist to answer questions was Aaron Dunn. He said that his company likes to focus on small cap stock with real business. They are not bullish at this time, and they feel you must currently stick with quality. He recommended K-Bro Linen Income Fund (TSX-KBL.UN), which he said was the largest independent linen service company. Aaron was not optimistic about the market. He said that the US has over consumed for years and years and now must under consume for years and years to get back to a health balance sheet. He is a bit bearish. He said to be selective in stock purchases and to expect another correction. Aaron does not like retail stock, index stock, junior mining and high tech stocks. He also said we should stay away from any company that will depend on the equity market for capital.
The last panelist to speak was Benj Gallander. He recommended Bell Canada (which I assume he meant BCE; TSX-BCE) and Consumers Waterheater Fund (TSX-CWI.UN). He considers Consumers more risky as they just cut their dividend. He said that analysts often like stocks that have gone up in value, but he considers this risky. Benj said that he has no idea on where the market is going. Government spending to stimulate the economy was good. However, the Ontario and our Federal governments are going to have big deficits and this will have to be fixed. He said the US government has thrown all sorts of money all over the place. Their high deficit and debt cannot continue. He expects much volatility in the US market. Benj does not like guaranteed mutual funds and bond funds. Interest rates are going to go up and bond funds always do poorly when interest rates rise.
Roger Conrad recommended Ag Growth International (TSX-AFN), Arc Energy (TSX-AET.UN) and Pembina Pipeline (PIF.UN). He said that the dividends paid by Arc Energy would be determined by the price of oil and gas, not the change to the company’s structure. (Also, note that he was one of many who recommended Pembina Pipeline. This Pipeline has promised not to keep their dividend the same for the next 5 years.) Roger feels that the US unemployment picture will remain bad. He said that in the US Corporation debt, even for utilities, was, not long ago, 600 basis points over government debt. This has now come down to 200 basis points over government debt. This is a positive sign. However, he feels that US citizens are still very worried. Rogers feels that we should be carefully looking at company earnings and ensure our companies have enough to cover dividends and debt servicing. He also said to stay away from long term bonds. He thinks that the US government is motivated to understate inflation. He also feels that the US will use inflation to buy off it debts. This is what it did for debts of WWII and the Vietnam War.
Tomorrow I will go back to looking at stock.
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, October 23, 2009
Money Show 2009 4
Yesterday, I said I would talk about the panels I went to at the Money Show. The first panel I went to was on Canadian Mining. On this panel were representatives of Arc Energy Trust, Avalon Rare Metals Inc and Mines Management.
I had reviewed Arc Energy Trust previously and it is into oil and gas. David Carey spoke for Arc Energy Trust. They are currently 50-50 into gas and oil, but will become gassier, as David said. He did not say what the new ratio of oil to gas would be. He said that there was more gas in supply than current demand, however, gas supplies tend to build up in the summer and tend to be drawn down in the winter. There is still an excess, but apparently, if this winter is 3ยบ colder than normal, then there will be no over supply. He also said that gas needs to be at $5 to $7 per MMBTU for companies to make a profit in natural gas.
David feels that there will be no radical changes at his company with the change to a corporation, sometime before 2011. He says (and also others said at this conference), that the distributions for his company will be influenced by the price of oil and gas and not by any company structural changes.
Obviously, Avalon is into Rare Earth Metals (and rare metals are a very interesting story in itself). William Mercer spoke for Avalon. I do not know if you have read about China and rare earth metals, but you should. Rare earth metals are in all new technologies and in some new version old ones technologies. Recently China has been supplying the world with rare metals and they dominated the market, as they would sell these cheaper than anyone else could. Now they have control of the market, they recently announced that they will restrict export of rare earth metals and maybe in the future stop export altogether. (China also said that the way around their restrictions was for companies to set up high tech plants in China.) Many think this is a play to have companies move high tech manufacturing to China, so they can have employment in high tech industries. China wants jobs for its people, they also want high tech jobs.
He thinks that China is a very sophisticated country and has played this well. China is not only the number 1 producer of rare earths, but is also the number 1 processor of them. However, he wonders if the West, in going green, will be happy to trading a dependency on OPEC for oil to a dependency on China for rare earths. (One use of rare earth metals is in wind mills.) There has been some problem in setting up rare earths mines in Canada because of aboriginal land claims, but he hopes the US will look upon us as a reliable supplier of rare earths.
Not all countries have rare earth metals, but Canada has them. (Note that China has also been buying up rare earth metal mines world wide.) In rare earth metal, the heavy rare earth metals are worth much more than the light rare earth metal. Avalon says its mine has 20% to 30% heavy rare earth metals compared to light rare earth metal. Most mines than have only 10% heavy rare earth metals compared to light rare earth metals. They expect their mine to start producing rare earths in 2013. It takes 6 years from the discovery of rare earths to production. They are, therefore, some 3 years along in this process.
Mines Management talked about their mine, which produces silver and copper. Douglas Dobbs spoke for this company. He thinks his company is interesting because of this mine. He thinks the price of all metals will rise because a lot of mines went on hold in 2007 and it will cost both time and money to bring them back online. Douglas feels that in 2 to 4 years, demand will be higher than supply and then prices will start to climb.
He thinks that silver is an interesting play because of its increase use in small electronics. Silver’s use in photography, a big past use, of course, has declined sharply of late because of the switch to digital photography. But, silver has also been rediscovered for its anti-bacteria properties. It is starting to be used to inhibit the growth on bacteria (in hospital and in bandages). Also, high tech is continuously finding new ways of using silver.
I will talk about the next panel I went to on Monday. This panel was on where to find safety and growth.
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.
I had reviewed Arc Energy Trust previously and it is into oil and gas. David Carey spoke for Arc Energy Trust. They are currently 50-50 into gas and oil, but will become gassier, as David said. He did not say what the new ratio of oil to gas would be. He said that there was more gas in supply than current demand, however, gas supplies tend to build up in the summer and tend to be drawn down in the winter. There is still an excess, but apparently, if this winter is 3ยบ colder than normal, then there will be no over supply. He also said that gas needs to be at $5 to $7 per MMBTU for companies to make a profit in natural gas.
David feels that there will be no radical changes at his company with the change to a corporation, sometime before 2011. He says (and also others said at this conference), that the distributions for his company will be influenced by the price of oil and gas and not by any company structural changes.
Obviously, Avalon is into Rare Earth Metals (and rare metals are a very interesting story in itself). William Mercer spoke for Avalon. I do not know if you have read about China and rare earth metals, but you should. Rare earth metals are in all new technologies and in some new version old ones technologies. Recently China has been supplying the world with rare metals and they dominated the market, as they would sell these cheaper than anyone else could. Now they have control of the market, they recently announced that they will restrict export of rare earth metals and maybe in the future stop export altogether. (China also said that the way around their restrictions was for companies to set up high tech plants in China.) Many think this is a play to have companies move high tech manufacturing to China, so they can have employment in high tech industries. China wants jobs for its people, they also want high tech jobs.
He thinks that China is a very sophisticated country and has played this well. China is not only the number 1 producer of rare earths, but is also the number 1 processor of them. However, he wonders if the West, in going green, will be happy to trading a dependency on OPEC for oil to a dependency on China for rare earths. (One use of rare earth metals is in wind mills.) There has been some problem in setting up rare earths mines in Canada because of aboriginal land claims, but he hopes the US will look upon us as a reliable supplier of rare earths.
Not all countries have rare earth metals, but Canada has them. (Note that China has also been buying up rare earth metal mines world wide.) In rare earth metal, the heavy rare earth metals are worth much more than the light rare earth metal. Avalon says its mine has 20% to 30% heavy rare earth metals compared to light rare earth metal. Most mines than have only 10% heavy rare earth metals compared to light rare earth metals. They expect their mine to start producing rare earths in 2013. It takes 6 years from the discovery of rare earths to production. They are, therefore, some 3 years along in this process.
Mines Management talked about their mine, which produces silver and copper. Douglas Dobbs spoke for this company. He thinks his company is interesting because of this mine. He thinks the price of all metals will rise because a lot of mines went on hold in 2007 and it will cost both time and money to bring them back online. Douglas feels that in 2 to 4 years, demand will be higher than supply and then prices will start to climb.
He thinks that silver is an interesting play because of its increase use in small electronics. Silver’s use in photography, a big past use, of course, has declined sharply of late because of the switch to digital photography. But, silver has also been rediscovered for its anti-bacteria properties. It is starting to be used to inhibit the growth on bacteria (in hospital and in bandages). Also, high tech is continuously finding new ways of using silver.
I will talk about the next panel I went to on Monday. This panel was on where to find safety and growth.
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, October 22, 2009
Money Show 2009 3
The first thing I did today was sign in for a Webcast. I did not see any presentations for the 10:45 to 11:30 period that I wanted to be at. The one presentation I wanted to see has a webcast, so I thought I would go to the show later and see the Webcast on my computer. I knew that the Webcast would occur at 9, but I am really glad that I looked at the site much earlier.
For starters, I had to sign up again at the site of www.moneyshow.com. I had not expected that since I signed up when I registered for the Toronto show. I also spent a long time looking for Webcasts of other days of this show. I finally found out that it takes Money Show 10 days to get the Webcasts online after they are broadcasted online. How could I know that and they certainly do not tell you, but I found a note attached to the webcast I signed up for stating this.
The Webcast I viewed was one by Benj Gallander of Contra the Heard Investment Letter. He thinks that the market is currently schizophrenic. Why? In a few words, information overload. He does not have a blackberry. Is he thus crazy? He thinks not. Just because he does not have a blackberry does not mean that he does not know what is going on. For the new letter portfolio, they will only buy companies that have been in business for at least 10 years. By doing this, they missed the tech bubble. They specialize in small cap stocks. The thing is that a lot of Mutual Funds cannot buy a stock unless it is $5 or $10. They do not “buy and hold” and feel that this is stupid. They usually hold a stock for 3 ½ years. They do both fundamental and technical analysis on stock they buy and they concentrate on stocks under $5. They also do not buy anything over $25. They sometimes average down, but will only do this once on a stock. They do not do dollar cost average, feeling this also is stupid. They look at the risk and the reward aspects of any stock they buy. A recent buy was Bank of Ireland. They have stayed away from Income Trusts because too many trusts have paid out so much money they will not survive. Benj Gallander feels that investing should be boring. You have to decide if you want excitement or good returns. He also thinks that tax loss season is a good time to buy.
I went to the Money Show at the convention center for other presentations of today. The first speaker I head was Robert Gorman of TD Waterhouse. He talked about the investment look out for 2010. First, he spoke about residential real estate in the US. This market still has an over supply and there will be further foreclosures. He feels the bottom will be hit this year. The next problem he talked about was commercial real estate in the US. The recession hit this area hard. The value of commercial real estate is way down. Apparently, commercial real estate is always a late recovering in a business cycle. He feels that this real estate market is not as bad off as the residential market and it will recover. The major concern with the US is that there will be a recovery, but it will be modest. This is not the problem for the stock market that people might think it is. He feels that slow, steady growth is always better for the stock market than rapid growth. He also feels that inflation will be under control for a while, but that long term inflation is a concern.
Robert Gorman feels that we should be buying stocks. Currently stocks yields are higher than the 10 year government bond yields and this is good. For Canada, he recommends stocks like Power Corp., Trans Canada and Scotia Bank as conservative picks. If we want some less conservative picks, he thinks we should get into gas. Buying Encana would be a rather conservative gas play. A high risk stock will be Precision Drilling. He expects a 4 year bull market and he includes 2009 in this 4 year period. He thinks that the TSX will be up in the high single digits or the low double digits in 2010. He expects the US market to do less well and be up only in the high single digits.
The next speaker I went to hear was John Stephenson of First Asset Investment Management Inc. He writes a news letter and he also has had a new book published called “Shell Shocked – How Canadians Can Invest After The Collapse”. John thinks we have a great stock buying opportunity in Canada. The US may be having problems, but we are doing just fine. The rise of China and the rest of Asia will help us recover. He thinks that the US will grow again, but it has to pay off its debt. He (and others I heard) feel that the US will print money in order to pay off there debts. (The US did this for the debt of WWII and the Vietnam War.) He thinks the US dollars decline will be done in an orderly fashion. The only stock he recommended by name is Suncor. It is in the oil sands and currently there is no replacement for oil.
The Nest speaker I heard was Aaron Dunn of Keystone Financial Publishing Corp. They publish investment letters. What keystone believes in is growth at reasonable prices. They give buy and sell information in their news letters. They recommend investing for value and they do not recommend speculating. They like companies with resilient business models, which are profitable and are growing their earnings. They also like companies with strong management teams, health balance sheets and compelling valuations. They look at the P/E and the Price/Cash Flow ratios. He recommended 3 stocks of Telus Corp (TSX-T), Ag Growth International (TSX-AFN) and Davis and Henderson (TSX-DHF.UN).
I then attended some panels and I will talk about them tomorrow.
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.
For starters, I had to sign up again at the site of www.moneyshow.com. I had not expected that since I signed up when I registered for the Toronto show. I also spent a long time looking for Webcasts of other days of this show. I finally found out that it takes Money Show 10 days to get the Webcasts online after they are broadcasted online. How could I know that and they certainly do not tell you, but I found a note attached to the webcast I signed up for stating this.
The Webcast I viewed was one by Benj Gallander of Contra the Heard Investment Letter. He thinks that the market is currently schizophrenic. Why? In a few words, information overload. He does not have a blackberry. Is he thus crazy? He thinks not. Just because he does not have a blackberry does not mean that he does not know what is going on. For the new letter portfolio, they will only buy companies that have been in business for at least 10 years. By doing this, they missed the tech bubble. They specialize in small cap stocks. The thing is that a lot of Mutual Funds cannot buy a stock unless it is $5 or $10. They do not “buy and hold” and feel that this is stupid. They usually hold a stock for 3 ½ years. They do both fundamental and technical analysis on stock they buy and they concentrate on stocks under $5. They also do not buy anything over $25. They sometimes average down, but will only do this once on a stock. They do not do dollar cost average, feeling this also is stupid. They look at the risk and the reward aspects of any stock they buy. A recent buy was Bank of Ireland. They have stayed away from Income Trusts because too many trusts have paid out so much money they will not survive. Benj Gallander feels that investing should be boring. You have to decide if you want excitement or good returns. He also thinks that tax loss season is a good time to buy.
I went to the Money Show at the convention center for other presentations of today. The first speaker I head was Robert Gorman of TD Waterhouse. He talked about the investment look out for 2010. First, he spoke about residential real estate in the US. This market still has an over supply and there will be further foreclosures. He feels the bottom will be hit this year. The next problem he talked about was commercial real estate in the US. The recession hit this area hard. The value of commercial real estate is way down. Apparently, commercial real estate is always a late recovering in a business cycle. He feels that this real estate market is not as bad off as the residential market and it will recover. The major concern with the US is that there will be a recovery, but it will be modest. This is not the problem for the stock market that people might think it is. He feels that slow, steady growth is always better for the stock market than rapid growth. He also feels that inflation will be under control for a while, but that long term inflation is a concern.
Robert Gorman feels that we should be buying stocks. Currently stocks yields are higher than the 10 year government bond yields and this is good. For Canada, he recommends stocks like Power Corp., Trans Canada and Scotia Bank as conservative picks. If we want some less conservative picks, he thinks we should get into gas. Buying Encana would be a rather conservative gas play. A high risk stock will be Precision Drilling. He expects a 4 year bull market and he includes 2009 in this 4 year period. He thinks that the TSX will be up in the high single digits or the low double digits in 2010. He expects the US market to do less well and be up only in the high single digits.
The next speaker I went to hear was John Stephenson of First Asset Investment Management Inc. He writes a news letter and he also has had a new book published called “Shell Shocked – How Canadians Can Invest After The Collapse”. John thinks we have a great stock buying opportunity in Canada. The US may be having problems, but we are doing just fine. The rise of China and the rest of Asia will help us recover. He thinks that the US will grow again, but it has to pay off its debt. He (and others I heard) feel that the US will print money in order to pay off there debts. (The US did this for the debt of WWII and the Vietnam War.) He thinks the US dollars decline will be done in an orderly fashion. The only stock he recommended by name is Suncor. It is in the oil sands and currently there is no replacement for oil.
The Nest speaker I heard was Aaron Dunn of Keystone Financial Publishing Corp. They publish investment letters. What keystone believes in is growth at reasonable prices. They give buy and sell information in their news letters. They recommend investing for value and they do not recommend speculating. They like companies with resilient business models, which are profitable and are growing their earnings. They also like companies with strong management teams, health balance sheets and compelling valuations. They look at the P/E and the Price/Cash Flow ratios. He recommended 3 stocks of Telus Corp (TSX-T), Ag Growth International (TSX-AFN) and Davis and Henderson (TSX-DHF.UN).
I then attended some panels and I will talk about them tomorrow.
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, October 21, 2009
Money Show 2009 2
I was down at the Money Show at the Toronto Convention center again today. I again went to a number of their education presentation and some of their product presentations.
One of the first speakers I heard was Ian McAvity. He again was interesting. He said that ABS’s (asset backed securities) are now dead for the simple reason that no one will buy them. He thinks we are back to 1938, which had lower highs and lower lows. He feels that the global banking system is not healthy. He feels that the US not only killed its stock market, but it has also killed its house market. Apparently, this is a first. He sees no future bull market because of the aging population. Aging populations have a tendency to save and not spend. Also, he said a lot of money is leaving US and a lot of money is coming into Canada. Our stock market is healthier than the US ones. This is nice to hear.
The next presentation was a product presentation. It was by www.YourInvestmentMall.com. This is an American company, and probably not bad, if you want to trade in US stocks. However, their presentation was an American one. You would think if they wanted to sell to Canadians, they could at least look up some Canadian statistics. I did not take any notes on this, so I do not have much to say about it. However, the concept sounds interesting, where you can get investment education, help with investing and investing all on one site.
The next presentation I went to was by Tom Busby of DTI Trader. The talk was to be on “Don’t fight the Trend: Strategies for Trading in a Bull or Bear Market”. Since they could not find the presentation on their laptop, Tom just winged it. I have few notes again, but he did say some interesting things. First, if the index is going up, it is probable that 75% to 80% of the stocks of the index are probably going up. He looks for market trends by looking at opening prices. First, he looks at monthly trends, then weekly trends and then finally daily trends. Is the market going up or down is basically his question, whether he is looking at a stock or an index.
The next speaker was Bill Hubard of MIG Investments. This guy was very good and gave an excellent presentation. First, he said that markets are not a great system, but are better than anything else we have tried. (Yes, he was paraphrasing Winston Churchill.) He said you do not want to invest when there is too much greed. This is when stock market bubbles occur. The better market is when there is too much fear. Markets will be low and it is here that it is best to invest. According to him, the stock market has calmed down a lot and we are in better shape than last year. He feels that markets do work. They are open today and they will be open tomorrow. Currently, he feels that a lot of company’s earnings are being upgraded for this year and that stock volumes are up. He feels that we risk deflation rather than inflations. To him, when the 10 year government bond has a 3½% interest rate, we are not going to inflation anytime soon. He believes that people are basically optimistic, that we feel if today is bad, tomorrow will be better. So, our economy and our stock market will recover.
The next talk I heard was also very interesting. This was by Brendan Caldwell of Caldwell Investments Management Inc. The talk was “The Equity Markets: Past, Present and Future”. People right away asked him about the future. He said that he feels that we can make money in a stock market rise over the next 3 to 6 months and then all bets are off. He does not know what will happen after 3 to 6 months. He also said that the best stocks would be in the Tech sector. According to him, we got into this mess because we got rid of the rules put in place after the great depression. In the US, they had the Glass-Steagall Act and we in Canada had the 4 pillars. The 4 pillars were banking, insurance, trust and investment companies and they were separate and companies could not operate in more than one area. Another rule we got rid of is that short selling could only occur on an up-tick. This stopped bear raids. We got rid of this rule and then got bear raids. Another problem he saw was that in the US buying a house was like buying an option. People put zero down and they would win if the house price went up and they would walk away if it went down.
The last presentation I want to talk about is the one by Warren MacKenzie of Second Opinion Investor Services Inc, with a web site of www.secondopinion.ca. He said that a lot of investors are becoming the DIY type. He feels that this is because the traditional sources of information no longer justify the fees required to be paid, that investors are questioning the wisdom of experts and that too many experts they contact have conflicts of interest. He feels that many people are still shocked about the losses they have suffered and this is after they listened to their advisors. Many people now believe that they could not do worse then their advisors, even novice investors feel this way. The most important point he made was to make a written plan for investing and stick to it. They charge by the hour for their services, and will look over what investments you and advise if the plan you have in place at present is good for you.
I plan to go back to the Money Show tomorrow.
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.
One of the first speakers I heard was Ian McAvity. He again was interesting. He said that ABS’s (asset backed securities) are now dead for the simple reason that no one will buy them. He thinks we are back to 1938, which had lower highs and lower lows. He feels that the global banking system is not healthy. He feels that the US not only killed its stock market, but it has also killed its house market. Apparently, this is a first. He sees no future bull market because of the aging population. Aging populations have a tendency to save and not spend. Also, he said a lot of money is leaving US and a lot of money is coming into Canada. Our stock market is healthier than the US ones. This is nice to hear.
The next presentation was a product presentation. It was by www.YourInvestmentMall.com. This is an American company, and probably not bad, if you want to trade in US stocks. However, their presentation was an American one. You would think if they wanted to sell to Canadians, they could at least look up some Canadian statistics. I did not take any notes on this, so I do not have much to say about it. However, the concept sounds interesting, where you can get investment education, help with investing and investing all on one site.
The next presentation I went to was by Tom Busby of DTI Trader. The talk was to be on “Don’t fight the Trend: Strategies for Trading in a Bull or Bear Market”. Since they could not find the presentation on their laptop, Tom just winged it. I have few notes again, but he did say some interesting things. First, if the index is going up, it is probable that 75% to 80% of the stocks of the index are probably going up. He looks for market trends by looking at opening prices. First, he looks at monthly trends, then weekly trends and then finally daily trends. Is the market going up or down is basically his question, whether he is looking at a stock or an index.
The next speaker was Bill Hubard of MIG Investments. This guy was very good and gave an excellent presentation. First, he said that markets are not a great system, but are better than anything else we have tried. (Yes, he was paraphrasing Winston Churchill.) He said you do not want to invest when there is too much greed. This is when stock market bubbles occur. The better market is when there is too much fear. Markets will be low and it is here that it is best to invest. According to him, the stock market has calmed down a lot and we are in better shape than last year. He feels that markets do work. They are open today and they will be open tomorrow. Currently, he feels that a lot of company’s earnings are being upgraded for this year and that stock volumes are up. He feels that we risk deflation rather than inflations. To him, when the 10 year government bond has a 3½% interest rate, we are not going to inflation anytime soon. He believes that people are basically optimistic, that we feel if today is bad, tomorrow will be better. So, our economy and our stock market will recover.
The next talk I heard was also very interesting. This was by Brendan Caldwell of Caldwell Investments Management Inc. The talk was “The Equity Markets: Past, Present and Future”. People right away asked him about the future. He said that he feels that we can make money in a stock market rise over the next 3 to 6 months and then all bets are off. He does not know what will happen after 3 to 6 months. He also said that the best stocks would be in the Tech sector. According to him, we got into this mess because we got rid of the rules put in place after the great depression. In the US, they had the Glass-Steagall Act and we in Canada had the 4 pillars. The 4 pillars were banking, insurance, trust and investment companies and they were separate and companies could not operate in more than one area. Another rule we got rid of is that short selling could only occur on an up-tick. This stopped bear raids. We got rid of this rule and then got bear raids. Another problem he saw was that in the US buying a house was like buying an option. People put zero down and they would win if the house price went up and they would walk away if it went down.
The last presentation I want to talk about is the one by Warren MacKenzie of Second Opinion Investor Services Inc, with a web site of www.secondopinion.ca. He said that a lot of investors are becoming the DIY type. He feels that this is because the traditional sources of information no longer justify the fees required to be paid, that investors are questioning the wisdom of experts and that too many experts they contact have conflicts of interest. He feels that many people are still shocked about the losses they have suffered and this is after they listened to their advisors. Many people now believe that they could not do worse then their advisors, even novice investors feel this way. The most important point he made was to make a written plan for investing and stick to it. They charge by the hour for their services, and will look over what investments you and advise if the plan you have in place at present is good for you.
I plan to go back to the Money Show tomorrow.
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, October 20, 2009
Money Show 2009
I was down at the Money Show at the Toronto Convention center today. It was not as well organized as the Financial Forum, but everything seemed to turn out fine. I only realized by happenstance that the opening remarks included some of the best speakers I would hear today. This show was also an American show, compared to the Financial Forum.
One of the first speakers I heard was Howard Gold. Doing polls in US, people have found that buy and hold investing was not dead in US. They found that over 50% of investors have taken control of their own investing. Also, they found that buying stocks was up and buying mutual funds was down. It would be interesting to know what is going on in Canada.
The next speaker up was Ian McAvity. The first thing he said was you do not buy shoes that do not fit, so you should not buy investments that do not fit. The first thing you need to figure out is what you are. Are you’re an investor? A trader? Or a speculator? Only then should you invest your money. He is also very negative about our current financial situation. He thinks that this will be a double or triple dip recession. He says, yes stocks always go up, but sometimes you need to wait for 10 to 20 years for this to happen. He thinks the stock market will be in the doldrums for 7 to 10 years longer. He also said that investors make most of their mistakes in buying (i.e. bad buys) rather than in selling.
Gordon Page, the editor and publisher of “The Internet Wealth Builder”, was the next speaker. He was much more optimistic. However, he gave a more Canadian perspective. He feels that we are lucky, that the 2009 recession could have been much worse. For us, commodities are rebounding and the TSX is beating the S&P. Stocks he likes are Suncor, Brookfield Asset Management, Sun Life and TD Bank. In the mid range of stocks, he likes Crescent Point Energy, Kinross, Fortis, Shaw Communications and TransCanada Corp. I heard him speak later in the afternoon also. He feels that there are great opportunities for Canadians in the winding down of the Income Trusts. He feels there are good ones, with little debt and good cash flow and good revenue flow. He recommended Crescent Point Energy (TSX-CPG), Brookfield Renewable Power (TSX-BRC.UN), Pembina Pipelines (TSX-PIF.UN), Daylight Resources Trust (TSX-DAY.UN), Inter Pipeline Fund (TSX-IPL.UN), and Keyera Facilities Income Fund (TSX-KEY.UN).
Garry Shilling was another American speaker. He thinks the stock markets are acting as if the US consumer is going to come back strong and start spending again. This is because of the v shape stock market recovers going on. However, he does not think this is what will happen. He feels that the US consumer is going to retrench, and that there will be no rebound in US housing. He thinks that there will be deflation. He talked about good deflation, which is when increased productivity increases the supply side of the supply/demand curve. Technology companies are used to this as prices for all technology has been decreasing for a long time. He also thinks there will be bad deflation occurring. This is caused by weak demand. He also sees wage deflation for the US in that wages will actually be cut. He thinks that US economic recovery will be very weak and will need more stimulus in the months ahead. He thinks we are in a secular bear market and, although there will be some bull markets, the bear markets will be more frequent and very deep.
I found the most interesting speaker to be Jim Jubak. He has a blog called jubakpicks.com. However, he talked about foreign stocks that we have no hope of buying. He also said that what we want to look for is stocks that acted like McDonalds, which have risen very well over the long term. He also said we should avoid stock like Kispy Kreme. This stock rocketed up from its start of $11.50 to $44.20. However, it stalled and is currently selling at only $4.33.
I plan to go back to the Money Show tomorrow.
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.
One of the first speakers I heard was Howard Gold. Doing polls in US, people have found that buy and hold investing was not dead in US. They found that over 50% of investors have taken control of their own investing. Also, they found that buying stocks was up and buying mutual funds was down. It would be interesting to know what is going on in Canada.
The next speaker up was Ian McAvity. The first thing he said was you do not buy shoes that do not fit, so you should not buy investments that do not fit. The first thing you need to figure out is what you are. Are you’re an investor? A trader? Or a speculator? Only then should you invest your money. He is also very negative about our current financial situation. He thinks that this will be a double or triple dip recession. He says, yes stocks always go up, but sometimes you need to wait for 10 to 20 years for this to happen. He thinks the stock market will be in the doldrums for 7 to 10 years longer. He also said that investors make most of their mistakes in buying (i.e. bad buys) rather than in selling.
Gordon Page, the editor and publisher of “The Internet Wealth Builder”, was the next speaker. He was much more optimistic. However, he gave a more Canadian perspective. He feels that we are lucky, that the 2009 recession could have been much worse. For us, commodities are rebounding and the TSX is beating the S&P. Stocks he likes are Suncor, Brookfield Asset Management, Sun Life and TD Bank. In the mid range of stocks, he likes Crescent Point Energy, Kinross, Fortis, Shaw Communications and TransCanada Corp. I heard him speak later in the afternoon also. He feels that there are great opportunities for Canadians in the winding down of the Income Trusts. He feels there are good ones, with little debt and good cash flow and good revenue flow. He recommended Crescent Point Energy (TSX-CPG), Brookfield Renewable Power (TSX-BRC.UN), Pembina Pipelines (TSX-PIF.UN), Daylight Resources Trust (TSX-DAY.UN), Inter Pipeline Fund (TSX-IPL.UN), and Keyera Facilities Income Fund (TSX-KEY.UN).
Garry Shilling was another American speaker. He thinks the stock markets are acting as if the US consumer is going to come back strong and start spending again. This is because of the v shape stock market recovers going on. However, he does not think this is what will happen. He feels that the US consumer is going to retrench, and that there will be no rebound in US housing. He thinks that there will be deflation. He talked about good deflation, which is when increased productivity increases the supply side of the supply/demand curve. Technology companies are used to this as prices for all technology has been decreasing for a long time. He also thinks there will be bad deflation occurring. This is caused by weak demand. He also sees wage deflation for the US in that wages will actually be cut. He thinks that US economic recovery will be very weak and will need more stimulus in the months ahead. He thinks we are in a secular bear market and, although there will be some bull markets, the bear markets will be more frequent and very deep.
I found the most interesting speaker to be Jim Jubak. He has a blog called jubakpicks.com. However, he talked about foreign stocks that we have no hope of buying. He also said that what we want to look for is stocks that acted like McDonalds, which have risen very well over the long term. He also said we should avoid stock like Kispy Kreme. This stock rocketed up from its start of $11.50 to $44.20. However, it stalled and is currently selling at only $4.33.
I plan to go back to the Money Show tomorrow.
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, October 19, 2009
Brookfield Asset Management 2
I am reviewing this stock (TSX-BAM.A) today as I last reviewed it on my blog in November 2008 and since I have updated my spreadsheet with the December 2008 financials. I have also updated my spreadsheet with the 2nd quarterly financials. I do not own this stock. This company is on the dividend list of Dividend Achievers . (Note the new address for Dividend Achievers list.)
First of all, I should mention that this company has a long history of name changes. I bought it as Hees International between 1987 and 1990. I sold it as Edperbrascan in 1999. I made a return of 3.7% per year. I sold it as I felt the company was going nowhere. In 1987, it was paying dividends and I did receive some good dividend income from the company. The company started to have problems in 1989 and I am glad a sold when I did.
The first thing I want to review is Insider Buying and Insider Selling. There was a bit of buying at the end of last year, however, since that time there has been a huge amount of selling. There was a lot of selling in August of this year, mostly by a director. Of course, you never know why anyone sells, but you have to wonder.
Sites that use the last 12 months of earnings to do a current P/E ratio show a P/E ratio in the low 20’s. My P/E for the current price and expected earnings for this year is 27. The 5 year average low P/E for this stock is 13. However, the P/E has fluctuated a lot, so it is hard to pin down a low P/E ratio for this stock. However, any over 15 is probably high, so it would appear the P/E ratio on this stock is not showing as a good time to buy. If you look at the Graham Price, the stock price seems to be almost 40% higher. Also, for the Price/Book Value ratio, the current ratio is higher than the 10 year average. The only buy signal is the Dividend Yield. The current dividend yield is 2.3% and the 5 year average is 1.7%.
I note that the Globe Investor site gives this company 3 stars out of a possible 5 star rating. There are a lot of analysts that follow this company, both in Canada and US. It is traded on the NYSE as BAM. All the ratings are from Strong Buy to Hold. I can find no other ratings. The consensus recommendation is a Buy. (See my site for information on analyst ratings.)
In looking at the charts, I compared this company to the TSX and the Real Estate Index. This stock has, over the past 10 years done consistently better than the Real Estate Index. It has just done much better than the TSX if you look at data for at least 10 years. This company spiked higher than both these indexes in the last bull market, but fell in the subsequent bear market to match the return of the TSX index. It has, over the very short term done a bit better than the TSX. The dividend payments have added around 3% to the total return for this stock over the last 5 and 10 years.
I am currently satisfied with what real estate stock I have, so I am not in the market to purchase any such companies at the present time. However, I will track this company as it is on a dividend list I like.
This Canadian Asset Managing company invests in and operates a variety of assets on its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Partners Ltd owns 17%. Its web site is www.brookfield.com. See my spreadsheet at www.spbrunner.com/stocks/bam.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.
First of all, I should mention that this company has a long history of name changes. I bought it as Hees International between 1987 and 1990. I sold it as Edperbrascan in 1999. I made a return of 3.7% per year. I sold it as I felt the company was going nowhere. In 1987, it was paying dividends and I did receive some good dividend income from the company. The company started to have problems in 1989 and I am glad a sold when I did.
The first thing I want to review is Insider Buying and Insider Selling. There was a bit of buying at the end of last year, however, since that time there has been a huge amount of selling. There was a lot of selling in August of this year, mostly by a director. Of course, you never know why anyone sells, but you have to wonder.
Sites that use the last 12 months of earnings to do a current P/E ratio show a P/E ratio in the low 20’s. My P/E for the current price and expected earnings for this year is 27. The 5 year average low P/E for this stock is 13. However, the P/E has fluctuated a lot, so it is hard to pin down a low P/E ratio for this stock. However, any over 15 is probably high, so it would appear the P/E ratio on this stock is not showing as a good time to buy. If you look at the Graham Price, the stock price seems to be almost 40% higher. Also, for the Price/Book Value ratio, the current ratio is higher than the 10 year average. The only buy signal is the Dividend Yield. The current dividend yield is 2.3% and the 5 year average is 1.7%.
I note that the Globe Investor site gives this company 3 stars out of a possible 5 star rating. There are a lot of analysts that follow this company, both in Canada and US. It is traded on the NYSE as BAM. All the ratings are from Strong Buy to Hold. I can find no other ratings. The consensus recommendation is a Buy. (See my site for information on analyst ratings.)
In looking at the charts, I compared this company to the TSX and the Real Estate Index. This stock has, over the past 10 years done consistently better than the Real Estate Index. It has just done much better than the TSX if you look at data for at least 10 years. This company spiked higher than both these indexes in the last bull market, but fell in the subsequent bear market to match the return of the TSX index. It has, over the very short term done a bit better than the TSX. The dividend payments have added around 3% to the total return for this stock over the last 5 and 10 years.
I am currently satisfied with what real estate stock I have, so I am not in the market to purchase any such companies at the present time. However, I will track this company as it is on a dividend list I like.
This Canadian Asset Managing company invests in and operates a variety of assets on its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Partners Ltd owns 17%. Its web site is www.brookfield.com. See my spreadsheet at www.spbrunner.com/stocks/bam.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, October 16, 2009
Brookfield Asset Management
I am reviewing this stock (TSX-BAM.A) today as I last reviewed it on my blog in November 2008 and since I have updated my spreadsheet with the December 2008 financials. I have also updated my spreadsheet with the 2nd quarterly financials. I do not own this stock. This company is on the dividend list of Dividend Achievers . (Note the new address for Dividend Achievers list.)
I follow this stock because it is on the Dividend Achievers list, but it is real estate and currently I am happy with the real estate stock I own. This means that I have no current plans in buying this stock. But I do follow the ones on the dividend lists, as you may never know what I may want to do in the future. One problem with this stock is that it declares dividends in US dollars, so the actual dividends that you receive in Canada can fluctuate with currency changes. It also reports in US dollars.
When I look at this stock, I most of the growth figures are good for the last 5 years, but not great for the last 10 years. For example, if you look at earnings, they have grown about 10.9% per year for the last 5 years, but only 7.3% per year for the last 10 years. If you look at the cash flow, you see the same thing. The cash flow for the last 5 years has grown about 9% per year. The cash flow for the last 10 years has only grown about 3.5% per year. This is because the stock did not do particularly well from 1998 to 2002.
Dividends have increase well as the growth in dividends over the last 5 years was almost 18% per year and for the last 10 years was almost 8% per year. However, this is due to the big increases in dividends that occurred in 2006 and 2008. Most years the dividends did not increase by much. The Payout ratios have varied quite a bit over the years. As I mentioned before, dividends are now declared in US dollars, so they can fluctuate because of the Canadian/US currency exchange rates.
The Asset/Liability ratios on this stock at 1.10 at the end of 2008 and the 5 year average at 1.16 are low. I like to see them at, at least 1.50. However, with the ratios being above 1.00, it means that the assets can cover the liabilities.
As I said above, I follow this stock as it is on the Canadian Dividend Achievers list. I do not have any. On Monday, I will look at what the analysts are saying. However, I have noticed in updating my spreadsheet that expected earnings for 2009 and 2010 have been lowered since I last looked at this stock in May 2009. This is not a good sign.
This Canadian Asset Managing company invests in and operates a variety of assets on its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Partners Ltd owns 17%. Its web site is www.brookfield.com. See my spreadsheet at www.spbrunner.com/stocks/bam.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.
I follow this stock because it is on the Dividend Achievers list, but it is real estate and currently I am happy with the real estate stock I own. This means that I have no current plans in buying this stock. But I do follow the ones on the dividend lists, as you may never know what I may want to do in the future. One problem with this stock is that it declares dividends in US dollars, so the actual dividends that you receive in Canada can fluctuate with currency changes. It also reports in US dollars.
When I look at this stock, I most of the growth figures are good for the last 5 years, but not great for the last 10 years. For example, if you look at earnings, they have grown about 10.9% per year for the last 5 years, but only 7.3% per year for the last 10 years. If you look at the cash flow, you see the same thing. The cash flow for the last 5 years has grown about 9% per year. The cash flow for the last 10 years has only grown about 3.5% per year. This is because the stock did not do particularly well from 1998 to 2002.
Dividends have increase well as the growth in dividends over the last 5 years was almost 18% per year and for the last 10 years was almost 8% per year. However, this is due to the big increases in dividends that occurred in 2006 and 2008. Most years the dividends did not increase by much. The Payout ratios have varied quite a bit over the years. As I mentioned before, dividends are now declared in US dollars, so they can fluctuate because of the Canadian/US currency exchange rates.
The Asset/Liability ratios on this stock at 1.10 at the end of 2008 and the 5 year average at 1.16 are low. I like to see them at, at least 1.50. However, with the ratios being above 1.00, it means that the assets can cover the liabilities.
As I said above, I follow this stock as it is on the Canadian Dividend Achievers list. I do not have any. On Monday, I will look at what the analysts are saying. However, I have noticed in updating my spreadsheet that expected earnings for 2009 and 2010 have been lowered since I last looked at this stock in May 2009. This is not a good sign.
This Canadian Asset Managing company invests in and operates a variety of assets on its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Partners Ltd owns 17%. Its web site is www.brookfield.com. See my spreadsheet at www.spbrunner.com/stocks/bam.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, October 15, 2009
ATCO Ltd 2
I am continuing my review this stock (TSX-ACO.X) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. This company is on the dividend lists of Dividend Achievers and Dividend Aristocrats (see indices). (Note the new address for Dividend Achievers list.)
The first thing I always look at is Insider Buying and Insider Selling. You do not often get much information from this, but every once in a while you can get very strong buy or sell signals. As it happens for this stock, there was a bit of Insider Buying and a bit more of Insider Selling, but we do not learn much. The thing on this stock that gives some insider information is that they raised the dividend over 6%. This is not bad. However, you can see from the spreadsheet the dividend raises hit a peak about 10 years ago and have been declining every since.
According to my spreadsheet, the 5 year average low for the P/E ratio is 9.6. For the estimated earnings for 2009, I get a P/E of 13. If you look at sites that use the earnings for the last 12 months, the current P/E is around 9. Any P/E ratio under 10 is good. When I look at the Graham Price, I see that the current price is some 20% lower than the Graham Price. This is good. However, since this stock is largely owned by a single shareholder, the stock price has a tendency to be around the Graham price. So being below the Graham Price is this case is not as good as it first appears to be.
When I look at the current yield compared to the averages, I find that the current yield at about 2.3% to be higher than the 5 year average of 2.1%. When I look at the Price/Book Value ratio, which is currently around 1.49, is slightly lower than the long term average of 1.55.
The Globe and Mail Investor site gives this stock a 4 star rating. When I look for analyst ratings, I find that few analysts follow this stock. There are some Buy, Hold and Underperform ratings for this stock. The consensus recommendation is a Hold. (See my site for information on analyst ratings.)
If you look at the charts and compare this stock to the TSX Index and the Utility Index, it has done as bit better than both over the long term, plus the dividends have added some 2% per year to the total return received for this stock. There appears to be a lack of enthusiasm for this stock. The current price seems to be good, but no bargain. When I updated dated my spreadsheet yesterday, I noted that the earnings estimates have gone up a bit and this is a good sign. Some analysts expect the stock price to go up a bit over the next year, but there is definitely a lack of enthusiasm for the stock.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. ATCO has a 52% stake in Canadian Utilities Ltd. The company utilizes a dual share structure and it is effectively controlled by R.D. Southern. Ronald D. Southern owns 83%. The Southern family of Alberta made its wealth by doing a fine job of managing the company and its subsidiaries. Its web site is www.atco.com. See my spreadsheet at www.spbrunner.com/stocks/aco.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.
The first thing I always look at is Insider Buying and Insider Selling. You do not often get much information from this, but every once in a while you can get very strong buy or sell signals. As it happens for this stock, there was a bit of Insider Buying and a bit more of Insider Selling, but we do not learn much. The thing on this stock that gives some insider information is that they raised the dividend over 6%. This is not bad. However, you can see from the spreadsheet the dividend raises hit a peak about 10 years ago and have been declining every since.
According to my spreadsheet, the 5 year average low for the P/E ratio is 9.6. For the estimated earnings for 2009, I get a P/E of 13. If you look at sites that use the earnings for the last 12 months, the current P/E is around 9. Any P/E ratio under 10 is good. When I look at the Graham Price, I see that the current price is some 20% lower than the Graham Price. This is good. However, since this stock is largely owned by a single shareholder, the stock price has a tendency to be around the Graham price. So being below the Graham Price is this case is not as good as it first appears to be.
When I look at the current yield compared to the averages, I find that the current yield at about 2.3% to be higher than the 5 year average of 2.1%. When I look at the Price/Book Value ratio, which is currently around 1.49, is slightly lower than the long term average of 1.55.
The Globe and Mail Investor site gives this stock a 4 star rating. When I look for analyst ratings, I find that few analysts follow this stock. There are some Buy, Hold and Underperform ratings for this stock. The consensus recommendation is a Hold. (See my site for information on analyst ratings.)
If you look at the charts and compare this stock to the TSX Index and the Utility Index, it has done as bit better than both over the long term, plus the dividends have added some 2% per year to the total return received for this stock. There appears to be a lack of enthusiasm for this stock. The current price seems to be good, but no bargain. When I updated dated my spreadsheet yesterday, I noted that the earnings estimates have gone up a bit and this is a good sign. Some analysts expect the stock price to go up a bit over the next year, but there is definitely a lack of enthusiasm for the stock.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. ATCO has a 52% stake in Canadian Utilities Ltd. The company utilizes a dual share structure and it is effectively controlled by R.D. Southern. Ronald D. Southern owns 83%. The Southern family of Alberta made its wealth by doing a fine job of managing the company and its subsidiaries. Its web site is www.atco.com. See my spreadsheet at www.spbrunner.com/stocks/aco.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, October 14, 2009
ATCO Ltd
I am reviewing this stock (TSX-ACO.X) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. This company is on the dividend lists of Dividend Achievers and Dividend Aristocrats (see indices). (Note the new address for Dividend Achievers list.)
Most of the growth figures are good. What is not very good is the growth in revenues. Revenues have not grown over the last 5 years; they are down just over 3% per year. Over the last 10 years, they have grown about 5% per year. These are not great figures. However, the dividend is decent at 2% and it has grown about 8% per year over the last 5 years and 10% per over the last 10 years.
They payout a low percentage of their cash flow in dividends, but they have raised their dividends this year by just over 6%. Not all stocks that usually raise their dividends each year have raised theirs this year. This shows the management has faith that they can pay for an increased dividend.
Turning to the liquidity ratios, I find this ratio has always been very good as it usually is at or higher than 2.00. This means that the current assets and easily cover current liabilities. The average for the last 5 years is 2.63. However, the Asset/Liability ratios are not as high as I would like them. It is over 1.00, but I like to see them around 1.50. This ratio at the end of 2008 was 1.26. It has since retreated closer to its 10 year average by coming down to 1.22.
This is the sort of stock I like. I do not mind stocks that are largely owned by a family or person, as long as they treat their shareholders well. This company pays a decent dividend, which runs around 2%. However, I cannot buy everything. Although, in the future I might buy this if some other utility stock I own needs to be replaced.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. ATCO has a 52% stake in Canadian Utilities Ltd. The company utilizes a dual share structure and it is effectively controlled by R.D. Southern. Ronald D. Southern owns 83%. The Southern family of Alberta made its wealth by doing a fine job of managing the company and its subsidiaries. Its web site is www.atco.com. See my spreadsheet at www.spbrunner.com/stocks/aco.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.
Most of the growth figures are good. What is not very good is the growth in revenues. Revenues have not grown over the last 5 years; they are down just over 3% per year. Over the last 10 years, they have grown about 5% per year. These are not great figures. However, the dividend is decent at 2% and it has grown about 8% per year over the last 5 years and 10% per over the last 10 years.
They payout a low percentage of their cash flow in dividends, but they have raised their dividends this year by just over 6%. Not all stocks that usually raise their dividends each year have raised theirs this year. This shows the management has faith that they can pay for an increased dividend.
Turning to the liquidity ratios, I find this ratio has always been very good as it usually is at or higher than 2.00. This means that the current assets and easily cover current liabilities. The average for the last 5 years is 2.63. However, the Asset/Liability ratios are not as high as I would like them. It is over 1.00, but I like to see them around 1.50. This ratio at the end of 2008 was 1.26. It has since retreated closer to its 10 year average by coming down to 1.22.
This is the sort of stock I like. I do not mind stocks that are largely owned by a family or person, as long as they treat their shareholders well. This company pays a decent dividend, which runs around 2%. However, I cannot buy everything. Although, in the future I might buy this if some other utility stock I own needs to be replaced.
ATCO LTD. is a management holding company with operating subsidiaries in electric and natural gas utility operations, independent power operations, production, storage, processing, gathering, delivery of natural gas, technical facilities management for the industrial, defense and transportation sectors, the manufacture, sale and leasing of industrial shelters and industrial noise abatement technologies. ATCO has a 52% stake in Canadian Utilities Ltd. The company utilizes a dual share structure and it is effectively controlled by R.D. Southern. Ronald D. Southern owns 83%. The Southern family of Alberta made its wealth by doing a fine job of managing the company and its subsidiaries. Its web site is www.atco.com. See my spreadsheet at www.spbrunner.com/stocks/aco.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, October 13, 2009
Arc Energy Trust 2
I am continuing my review this stock (TSX-AET.UN) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. This is an income trust stock that I follow. They have also decreased their distributions this year.
I looked at Insider Buying and Insider Selling over the past year for this company. What I found was, over the past year, there has been twice as much selling as buying. However, for the past 4 to 5 months, all the Insider trading has been buying. Over the past 5 to 6 months, the CEO and other officers have increased their holdings in this company. I do not think that this points to any particular buy or sell signal.
I calculate P/E based on expected earnings, so I get an expected P/E of about 40 for this year and about 20 for next year. A P/E of 40 is very high. This is because this company is not expected to earning much in this calendar year. The 5 year average low P/E is 8.6. I notice that sites that use the earnings for the last 12 months to calculate this figure get a P/E of around between 9.5 and this is a good P/E. A P/E of 10 and less is low.
This dividend yield on this stock is current just around 6%. This stock has a 5 year average of over 10%, so the current yield is low by this standard. However, a yield of 6% is good. As I said yesterday, this is an oil and gas company and their dividends do tend to fluctuation with the price of oil and gas.
The Price/Book Value ratio is about equal to the 10 year average. So this does not point to a good current price. Also, the current Graham Price is some 50% below the current price. The Graham price was close to the current price at the end of 2008, however, it has fallen because this company is not expected to earn much this year. The Return on Equity for this stock is usually quite good. However, it is low for the 2nd quarter at only 7.6%. Usually the ROE is around 15 to 20%.
Now it is time to look at what the analysts’ recommendations are. I see a lot of Buy recommendations, a few Holds and a few Strong Buys. The consensus is a Buy. This company stocks is considered, of course, to be a high risk. (See my site for information on analyst ratings.)
If you look at the charts, this stock has done as well as or better than the TSX over the long term. Plus this stock has paid good dividends. But this is an oil and gas stock and therefore it tends to be volatile and also, the dividends do tend to fluctuate with the price of oil and gas. It is considered high risk. You should not invest in this sort of stock if you cannot take the volatility. I have no investment in this company, but I have a bit in the oil and gas industry in order to keep track of how this resource is doing. Canada, after all, is a resource rich country.
Arc Energy Trust acquires and develops long-life low declining oil and gas properties in Western Canada. Its web site is www.arcresources.com. See my spreadsheet at www.spbrunner.com/stocks/aet.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.
I looked at Insider Buying and Insider Selling over the past year for this company. What I found was, over the past year, there has been twice as much selling as buying. However, for the past 4 to 5 months, all the Insider trading has been buying. Over the past 5 to 6 months, the CEO and other officers have increased their holdings in this company. I do not think that this points to any particular buy or sell signal.
I calculate P/E based on expected earnings, so I get an expected P/E of about 40 for this year and about 20 for next year. A P/E of 40 is very high. This is because this company is not expected to earning much in this calendar year. The 5 year average low P/E is 8.6. I notice that sites that use the earnings for the last 12 months to calculate this figure get a P/E of around between 9.5 and this is a good P/E. A P/E of 10 and less is low.
This dividend yield on this stock is current just around 6%. This stock has a 5 year average of over 10%, so the current yield is low by this standard. However, a yield of 6% is good. As I said yesterday, this is an oil and gas company and their dividends do tend to fluctuation with the price of oil and gas.
The Price/Book Value ratio is about equal to the 10 year average. So this does not point to a good current price. Also, the current Graham Price is some 50% below the current price. The Graham price was close to the current price at the end of 2008, however, it has fallen because this company is not expected to earn much this year. The Return on Equity for this stock is usually quite good. However, it is low for the 2nd quarter at only 7.6%. Usually the ROE is around 15 to 20%.
Now it is time to look at what the analysts’ recommendations are. I see a lot of Buy recommendations, a few Holds and a few Strong Buys. The consensus is a Buy. This company stocks is considered, of course, to be a high risk. (See my site for information on analyst ratings.)
If you look at the charts, this stock has done as well as or better than the TSX over the long term. Plus this stock has paid good dividends. But this is an oil and gas stock and therefore it tends to be volatile and also, the dividends do tend to fluctuate with the price of oil and gas. It is considered high risk. You should not invest in this sort of stock if you cannot take the volatility. I have no investment in this company, but I have a bit in the oil and gas industry in order to keep track of how this resource is doing. Canada, after all, is a resource rich country.
Arc Energy Trust acquires and develops long-life low declining oil and gas properties in Western Canada. Its web site is www.arcresources.com. See my spreadsheet at www.spbrunner.com/stocks/aet.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, October 9, 2009
Arc Energy Trust
I am reviewing this stock (TSX-AET.UN) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock. This is an income trust stock that I follow. They have also decreased their distributions this year.
As on a lot of income trust stocks, the growth figures are good for all items but the Book Value. Book Value for the last 5 years has only increased by about 2% per year. This is not great. Other figures are better. Take the Cash Flow from Operations. Over the last 5 and 10 year periods, the Cash Flow has increased by 13% and 12% per year. Until this year, the dividends have increased nicely. However, with the dividend cut in half.
Because this is an oil and gas stock, the dividend payments have fluctuated over the years. But if you look at how much the dividends have affected the total return, you will find that of the 20% per year total return over the last 5 years, dividends have been 13% of this return. If you look at a 10 year period, the dividends have increased per year returns by 21.7% to 30.4% per year. The total returns have been very good.
Turning to the Asset/Liability ratios, I find the A/L Ratio good and it has been at 1.50 or better. The average for the last 5 years is 2.43. However, the liquidity ratios are low and at the end of 2008 it was only 0.78. The Liquidity ratio again was as bit better in June 2009, but still it was at just 0.83. If this ratio is not at least 1.00, it means that the current assets cannot cover the current liabilities.
I have gone back to reviewing stocks I have not reviewed lately because nothing much is happening in the stock market. I was hoping for a good pull back this fall. It has not happened yet. You can make some good money in oil and gas stocks like this one. However, you have to be prepared for the fluctuation in dividend payments. If you cannot handle that, you should not invest in oil and gas stocks.
Arc Energy Trust acquires and develops long-life low declining oil and gas properties in Western Canada. Its web site is www.arcresources.com. See my spreadsheet at www.spbrunner.com/stocks/aet.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.
As on a lot of income trust stocks, the growth figures are good for all items but the Book Value. Book Value for the last 5 years has only increased by about 2% per year. This is not great. Other figures are better. Take the Cash Flow from Operations. Over the last 5 and 10 year periods, the Cash Flow has increased by 13% and 12% per year. Until this year, the dividends have increased nicely. However, with the dividend cut in half.
Because this is an oil and gas stock, the dividend payments have fluctuated over the years. But if you look at how much the dividends have affected the total return, you will find that of the 20% per year total return over the last 5 years, dividends have been 13% of this return. If you look at a 10 year period, the dividends have increased per year returns by 21.7% to 30.4% per year. The total returns have been very good.
Turning to the Asset/Liability ratios, I find the A/L Ratio good and it has been at 1.50 or better. The average for the last 5 years is 2.43. However, the liquidity ratios are low and at the end of 2008 it was only 0.78. The Liquidity ratio again was as bit better in June 2009, but still it was at just 0.83. If this ratio is not at least 1.00, it means that the current assets cannot cover the current liabilities.
I have gone back to reviewing stocks I have not reviewed lately because nothing much is happening in the stock market. I was hoping for a good pull back this fall. It has not happened yet. You can make some good money in oil and gas stocks like this one. However, you have to be prepared for the fluctuation in dividend payments. If you cannot handle that, you should not invest in oil and gas stocks.
Arc Energy Trust acquires and develops long-life low declining oil and gas properties in Western Canada. Its web site is www.arcresources.com. See my spreadsheet at www.spbrunner.com/stocks/aet.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, October 8, 2009
Canadian Natural Resources 2
I am continuing my review of this stock (TSX- CNQ) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. This company is on the dividend lists of Dividend Achievers and Dividend Aristocrats (see indices). (Note the new address for Dividend Achievers list.)
I looked at Insider Buying and Insider Selling over the past year for this company. What I found was a huge amount of insider selling. There has been a lot of insider selling with the current rise in price. I do not take this as a good sign. The rising the dividend usually shows that the management has faith in the near term. However, the dividend increase was little, especially compared to other years. The huge amount of Insider Selling can only say that the insiders believe this is not the time to invest in this company.
I calculate P/E based on expected earnings, so I get an expected P/E of over 14 for this year and over 12 for next year. This is not bad level. The 5 year average low P/E is 9. The current P/E is not particularly low, but the 5 year average low is. I notice that sites that use the earnings for the last 12 months to calculate this figure get a P/E of around between 7 and 8. A P/E of 10 and less is low. The other thing to point out is the price of this stock has risen significantly lately, like around 30% since the beginning of July.
When I look at the dividend yield at around .6%, it is just about the 5 year average. Of course, the dividend yield on this stock has always been quite low. I usually do not like buying stock with a dividend yield or average dividend yield of less than 1%. However, I live on dividends and this is a preference. I usually have some stocks paying a low, but highly increasing dividend and some that pay a high dividend, but only increase around the inflation rate.
The Price/Book Value ratio is about equal to the 10 year average. At the end of 2008, it was about 60% of this average. As I said above, the stock price has gone up a lot lately.
The Return on Equity for this stock is usually quite good. The 5 year average at the end of 2008 was almost 22%. This ROE has fluctuated a lot, but you have to go back to 1998 to get it at or lower than the ROE for the end of the 2nd quarter, which was only 5%.
When I look at analysts’ recommendations, the consensus is a Buy. I see recommendations of Strong Buy, Buy and Hold. There are lots of Hold ratings, a few less Buy ratings and very few Strong Buys. The consensus will therefore come up as a Buy. (See my site for information on analyst ratings.)
If you look at the charts, you will see that this stock has performed better than the TSX or the Energy Indexes over all periods from the short term to the long term. This stock rose quite high in the last bull market and fell quite sharply in the following bear market. However, it is done much better than the indexes since the bottom of March 2009. You have to wonder if it hasn’t risen too much to make it currently a good buy.
When I look at the Graham Price, the currently stock price is just 15% higher. This stock usually is a lot lower or a lot higher than the Graham Price. Being only 15% off is probably pretty good. However, I do not buy much in the way of Oil and Gas stock, so currently I have no intentions of buying this stock.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is www.cnrl.com. See my spreadsheet at www.spbrunner.com/stocks/cnq.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.
I looked at Insider Buying and Insider Selling over the past year for this company. What I found was a huge amount of insider selling. There has been a lot of insider selling with the current rise in price. I do not take this as a good sign. The rising the dividend usually shows that the management has faith in the near term. However, the dividend increase was little, especially compared to other years. The huge amount of Insider Selling can only say that the insiders believe this is not the time to invest in this company.
I calculate P/E based on expected earnings, so I get an expected P/E of over 14 for this year and over 12 for next year. This is not bad level. The 5 year average low P/E is 9. The current P/E is not particularly low, but the 5 year average low is. I notice that sites that use the earnings for the last 12 months to calculate this figure get a P/E of around between 7 and 8. A P/E of 10 and less is low. The other thing to point out is the price of this stock has risen significantly lately, like around 30% since the beginning of July.
When I look at the dividend yield at around .6%, it is just about the 5 year average. Of course, the dividend yield on this stock has always been quite low. I usually do not like buying stock with a dividend yield or average dividend yield of less than 1%. However, I live on dividends and this is a preference. I usually have some stocks paying a low, but highly increasing dividend and some that pay a high dividend, but only increase around the inflation rate.
The Price/Book Value ratio is about equal to the 10 year average. At the end of 2008, it was about 60% of this average. As I said above, the stock price has gone up a lot lately.
The Return on Equity for this stock is usually quite good. The 5 year average at the end of 2008 was almost 22%. This ROE has fluctuated a lot, but you have to go back to 1998 to get it at or lower than the ROE for the end of the 2nd quarter, which was only 5%.
When I look at analysts’ recommendations, the consensus is a Buy. I see recommendations of Strong Buy, Buy and Hold. There are lots of Hold ratings, a few less Buy ratings and very few Strong Buys. The consensus will therefore come up as a Buy. (See my site for information on analyst ratings.)
If you look at the charts, you will see that this stock has performed better than the TSX or the Energy Indexes over all periods from the short term to the long term. This stock rose quite high in the last bull market and fell quite sharply in the following bear market. However, it is done much better than the indexes since the bottom of March 2009. You have to wonder if it hasn’t risen too much to make it currently a good buy.
When I look at the Graham Price, the currently stock price is just 15% higher. This stock usually is a lot lower or a lot higher than the Graham Price. Being only 15% off is probably pretty good. However, I do not buy much in the way of Oil and Gas stock, so currently I have no intentions of buying this stock.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is www.cnrl.com. See my spreadsheet at www.spbrunner.com/stocks/cnq.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, October 7, 2009
Canadian Natural Resources
I am reviewing this stock (TSX- CNQ) today as I have updated my spreadsheet with the December 2008 financials and the 2nd quarterly financials. I do not own this stock, but they have increased their dividends this year. They are also on the dividend lists of Dividend Achievers and Dividend Aristocrats (see indices). (Note the new address for Dividend Achievers list.)
The growth figures on this stock are uniformly very good. For example, the earnings on this stock have increase at the rate of 30% per year for the last 5 years and over 50% for the last 10 years. The dividends have increased for both the 5 and 7 year periods just over 21% per year. Although the dividend increases have been coming down over the last couple of years and the increase this year is only 5%. However, few companies are increasing their dividends this year.
A lot of oil and gas stocks pay out higher dividends, but more fluctuating dividends. This stock pays a low but constantly increasing dividend. No oil and gas company payout a high percentage of the cash flow. This stock is not any different. The percentage of cash flow it pays out is usually around 3% and it is always under 4%.
Turning to the Asset/Liability ratios, I find the A/L Ratio good and it has been at 1.50 or better. However, the liquidity ratios are low and at the end of 2008 it was only 0.99. This is better than it has been for a few years. The Liquidity ratio again was lower in June 2009 at just 0.95. If this ratio is not at least 1.00, it means that the current assets cannot cover the current liabilities.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is www.cnrl.com. See my spreadsheet at www.spbrunner.com/stocks/cnq.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.
The growth figures on this stock are uniformly very good. For example, the earnings on this stock have increase at the rate of 30% per year for the last 5 years and over 50% for the last 10 years. The dividends have increased for both the 5 and 7 year periods just over 21% per year. Although the dividend increases have been coming down over the last couple of years and the increase this year is only 5%. However, few companies are increasing their dividends this year.
A lot of oil and gas stocks pay out higher dividends, but more fluctuating dividends. This stock pays a low but constantly increasing dividend. No oil and gas company payout a high percentage of the cash flow. This stock is not any different. The percentage of cash flow it pays out is usually around 3% and it is always under 4%.
Turning to the Asset/Liability ratios, I find the A/L Ratio good and it has been at 1.50 or better. However, the liquidity ratios are low and at the end of 2008 it was only 0.99. This is better than it has been for a few years. The Liquidity ratio again was lower in June 2009 at just 0.95. If this ratio is not at least 1.00, it means that the current assets cannot cover the current liabilities.
Canadian Natural Resources Ltd. is a senior oil and natural gas exploration, development and production company. The Company's operations are focused in Western Canada, in the U.K. sector of the North Sea and in offshore West Africa. Its web site is www.cnrl.com. See my spreadsheet at www.spbrunner.com/stocks/cnq.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, October 6, 2009
AGF Management 2
I am continuing my review this stock (TSX- AGF.B) today as I received the November 2008 annual report and I have not reviewed it since I received this report. They have maintained a position on the dividend lists of Dividend Achievers and at Dividend Aristocrats (see indices). (Note the new address for Dividend Achievers list.)
When looking at Insider Buying and Insider Selling, over the past year, there has been net buying. However, all the buying was in the first part of the past year. There has been significant selling in the last part of this past year. I do not take this as a good sign.
This company has not raised their dividends this year. However, because of the rise in dividends for the 2nd payment last year, the dividends actually paid in this current financial year will be over 5% higher. No one expects that this company will do well this year in both earnings and cash flow. This could mean that a very significant amount of their earnings and cash flow will go into paying the dividends.
I calculate P/E based on expected earnings, so I get an expected P/E of over 20 for this year and over 13 for next year. The 5 year average low P/E is 13. This is not particularly low. Sites that use the earnings for the last 12 months to calculate this figure get a P/E of around 45 or 46. This is very high.
If you look at the dividend yield, this is quite high at over 6%. The average yield over the last 5 years is around 3%, so this points to a good price. Also, if you look at the Price/Book Value ratio, the current one is less than 60% of the 10 year average. The last thing to look at is the Graham Price. This price has come down recently because of stagnating Book Value and lack of earnings. The current Graham Price is 10% above the current stock price. What you want is the stock price at or below the Graham Price.
When I look at the Return on Equity, it has been quite good for the financial years of 2007 and 2008. However, so far this year it is just over 6%. This is nothing to write home about. The one good thing is that the Accrual Ratio has come down and for the 3rd quarterly report was at -6%. Anything at -5% and below is very good.
When I look at analysts’ recommendations, the consensus is a Hold. This stock has very little other recommendations, although I did find a Strong Buy and a Buy. However, the overwhelming recommendation is a Hold. (See my site for information on analyst ratings.)
If you look at the charts, you will see that in the very short term of less than 1 year, this stock has done better than the TSX and the Financials Indexes. However, for longer periods of time it has done worse. On long periods like 10 years, it has done almost as well as the TSX, plus it pays dividends. It has had big run ups in the last 2 bull markets, but it has also fallen heavily in the last two bear markets.
At one time people have said you could make more by investing in the stock of Mutual Fund companies, not in mutual funds. However, I sort of wonder about this company. Personally, I am not currently interested in buying its stock, but I will continue to track it. All the ratios are giving mixed signals and certainly, the analysts following this company seem to think it a Hold. However, I have not seen any Sell recommendation.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is www.agf.com. See my spreadsheet at www.spbrunner.com/stocks/agf.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.
When looking at Insider Buying and Insider Selling, over the past year, there has been net buying. However, all the buying was in the first part of the past year. There has been significant selling in the last part of this past year. I do not take this as a good sign.
This company has not raised their dividends this year. However, because of the rise in dividends for the 2nd payment last year, the dividends actually paid in this current financial year will be over 5% higher. No one expects that this company will do well this year in both earnings and cash flow. This could mean that a very significant amount of their earnings and cash flow will go into paying the dividends.
I calculate P/E based on expected earnings, so I get an expected P/E of over 20 for this year and over 13 for next year. The 5 year average low P/E is 13. This is not particularly low. Sites that use the earnings for the last 12 months to calculate this figure get a P/E of around 45 or 46. This is very high.
If you look at the dividend yield, this is quite high at over 6%. The average yield over the last 5 years is around 3%, so this points to a good price. Also, if you look at the Price/Book Value ratio, the current one is less than 60% of the 10 year average. The last thing to look at is the Graham Price. This price has come down recently because of stagnating Book Value and lack of earnings. The current Graham Price is 10% above the current stock price. What you want is the stock price at or below the Graham Price.
When I look at the Return on Equity, it has been quite good for the financial years of 2007 and 2008. However, so far this year it is just over 6%. This is nothing to write home about. The one good thing is that the Accrual Ratio has come down and for the 3rd quarterly report was at -6%. Anything at -5% and below is very good.
When I look at analysts’ recommendations, the consensus is a Hold. This stock has very little other recommendations, although I did find a Strong Buy and a Buy. However, the overwhelming recommendation is a Hold. (See my site for information on analyst ratings.)
If you look at the charts, you will see that in the very short term of less than 1 year, this stock has done better than the TSX and the Financials Indexes. However, for longer periods of time it has done worse. On long periods like 10 years, it has done almost as well as the TSX, plus it pays dividends. It has had big run ups in the last 2 bull markets, but it has also fallen heavily in the last two bear markets.
At one time people have said you could make more by investing in the stock of Mutual Fund companies, not in mutual funds. However, I sort of wonder about this company. Personally, I am not currently interested in buying its stock, but I will continue to track it. All the ratios are giving mixed signals and certainly, the analysts following this company seem to think it a Hold. However, I have not seen any Sell recommendation.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is www.agf.com. See my spreadsheet at www.spbrunner.com/stocks/agf.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, October 5, 2009
State Of Dividends 3rd Quarter 2009
Today, I am updating my spreadsheet on dividends. I am showing not only my stock, but also all the ones I follow and have blogged about. For all these stock, I have shown in the “09” column if the company actually increased their dividend yet for the current year of 2009. Next, I will talk about the dividends for specific companies.
I hold Manulife Financial (TSX-MFC). Although this stock’s dividend was cut in half, from $.26 a share to $.13 a share, for me the dividend in 2009 only went down 22%. This is because I have already received two dividends this year at $.26 a share and will only receive two at the new rate of $.13 a share. If the company does not change their dividend from the new rate of $.13 a share, my dividends for this company will decrease a further 33% in 2010. It is hard to know what will happen. As far as I can see, the company has not stated what their intentions are in connection with dividends.
The other change to my dividends for the end of September 2009 is for the stock, Saputo Inc. (TSX-SAP). This stock has raised their dividend for the one paid in September 2009. However, if you notice on the spreadsheet, the last two raises where around 17% and this one is only 6.5%. Dividend increases have slowed down and now are few and far between. This is pretty typical as we have been in a financial crisis for a while. The longer it last, the less dividends are increased.
On my list, for the stocks that I own, I have 7 companies that have decreased their dividends already in 2009. I also have 14 companies that have increased their dividends. The rest have not yet made changes, but I do know that BCE has already announced that they will be increasing their dividends for this year. Also, on the spreadsheet I have some dividend changes in purple. This is because these changes did not affect me. This will be like the stock AltaGas Income Trust (TSX-ALA.UN) where they decreased their dividend before I purchased any stock.
When I have a “Y” in the “09”, it means that the stock actually raised their dividends this year. Take ATCO Ltd (TSX-ACO.X), for the financial year ending in December 2008, they paid 4 dividends of $.235. For the financial year ending in December 2009, they will potentially pay 4 dividends of $.25. There was an actual increase in dividends for 2009 starting with the dividend payable in March 2009. I have therefore placed a “Y” in the “09” column.
For the stock AGF Management Ltd (TSX-AGF.B), they paid 4 dividends for the financial year ending in 2008. This dividend consisted of one of $.20 and 3 of $.25 for a total dividend of $.95. So far, in 2009, they have paid three dividends of $.25 and since they have not stated a dividend increase, I am assuming that they will pay 4 dividends of $.25 for a total dividend of $1.00. There is an increase in dividends for this company from $.95 to $1.00, of some 5.3%. However, since they have not actually raised the dividend this year from the $.25 paid last year, I have inserted an “N” in the “09” column to show that the dividend has not actually been raised.
If a company has decreased their dividends this year, I have placed a “D” in the “09” column. For example, Consumers' Waterheater Fund (TSX-CWI.UN) paid 12 dividends of $.1075 in the financial year ending in 2008. For this year, they paid 9 dividends of $.1075 and then reduced the dividends to $.054. The last 3 payments of this year will probably be at $.054. They have therefore decreased their payments for 2009 by 12%. If they do not change them for 2010, they will pay 42% less in 2010 than in 2009.
If you are looking for stocks to buy this fall, you might want to first look at the ones with dividend increases.
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.
I hold Manulife Financial (TSX-MFC). Although this stock’s dividend was cut in half, from $.26 a share to $.13 a share, for me the dividend in 2009 only went down 22%. This is because I have already received two dividends this year at $.26 a share and will only receive two at the new rate of $.13 a share. If the company does not change their dividend from the new rate of $.13 a share, my dividends for this company will decrease a further 33% in 2010. It is hard to know what will happen. As far as I can see, the company has not stated what their intentions are in connection with dividends.
The other change to my dividends for the end of September 2009 is for the stock, Saputo Inc. (TSX-SAP). This stock has raised their dividend for the one paid in September 2009. However, if you notice on the spreadsheet, the last two raises where around 17% and this one is only 6.5%. Dividend increases have slowed down and now are few and far between. This is pretty typical as we have been in a financial crisis for a while. The longer it last, the less dividends are increased.
On my list, for the stocks that I own, I have 7 companies that have decreased their dividends already in 2009. I also have 14 companies that have increased their dividends. The rest have not yet made changes, but I do know that BCE has already announced that they will be increasing their dividends for this year. Also, on the spreadsheet I have some dividend changes in purple. This is because these changes did not affect me. This will be like the stock AltaGas Income Trust (TSX-ALA.UN) where they decreased their dividend before I purchased any stock.
When I have a “Y” in the “09”, it means that the stock actually raised their dividends this year. Take ATCO Ltd (TSX-ACO.X), for the financial year ending in December 2008, they paid 4 dividends of $.235. For the financial year ending in December 2009, they will potentially pay 4 dividends of $.25. There was an actual increase in dividends for 2009 starting with the dividend payable in March 2009. I have therefore placed a “Y” in the “09” column.
For the stock AGF Management Ltd (TSX-AGF.B), they paid 4 dividends for the financial year ending in 2008. This dividend consisted of one of $.20 and 3 of $.25 for a total dividend of $.95. So far, in 2009, they have paid three dividends of $.25 and since they have not stated a dividend increase, I am assuming that they will pay 4 dividends of $.25 for a total dividend of $1.00. There is an increase in dividends for this company from $.95 to $1.00, of some 5.3%. However, since they have not actually raised the dividend this year from the $.25 paid last year, I have inserted an “N” in the “09” column to show that the dividend has not actually been raised.
If a company has decreased their dividends this year, I have placed a “D” in the “09” column. For example, Consumers' Waterheater Fund (TSX-CWI.UN) paid 12 dividends of $.1075 in the financial year ending in 2008. For this year, they paid 9 dividends of $.1075 and then reduced the dividends to $.054. The last 3 payments of this year will probably be at $.054. They have therefore decreased their payments for 2009 by 12%. If they do not change them for 2010, they will pay 42% less in 2010 than in 2009.
If you are looking for stocks to buy this fall, you might want to first look at the ones with dividend increases.
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, October 2, 2009
AGF Management
I am reviewing this stock (TSX- AGF.B) today as I received the November 2008 annual report and I have not reviewed it since I received this report. I held this stock at one time, but sold, as I did not think this stock was going anywhere. They have maintained a position on the dividend lists of Dividend Achievers at www.indxis.com/DividendAchievers.html and Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). (Note the new address for Dividend Achievers list.)
I usually like stocks on these dividend lists, as they are generally good dividend paying stocks. However, this stock has only maintained their listings because they have increased their dividends by paying out more and more of the cash flow. You expect some fluctuations in payout of cash flow, but not for the dividends to take a bigger and bigger portion of the cash flow. This stock will potentially pay out around 50% of expected cash flow.
Going on to the growth figures, we are dealing with a rather mixed bag. The dividend growth is over 26% per year for the last 5 years and over 22% per year for the last 10 years. However, the last good dividend increase was in 2008 and there has been no dividend increase this year. The growth in cash flow is not bad being 11.5% per year over the last 5 years and 8.8% per year over the last 10 years. However, growth in stock price over the last 5 years has been negative at -10% per year and there has been no growth over the last 10 years.
Turning to the Asset/Liability ratios, I find the A/L Ratio low, in the 1.20 range. I would prefer this at 1.50, but at least it is over 1.00. The liquidity ratio is also very low, being around 0.50. I like the liquidity ratio to be 1.50 also. With a liquidity ratios as low as it is, this means that the current assets cannot cover the current liabilities.
This used to be a great stock. I do not think that it has really recovered from the last bear market and it is hard to say how it will handle the current one. At the moment, I am not interested in this stock, but I will look at what the analysts say about it on Monday.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is www.agf.com. See my spreadsheet at www.spbrunner.com/stocks/agf.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.
I usually like stocks on these dividend lists, as they are generally good dividend paying stocks. However, this stock has only maintained their listings because they have increased their dividends by paying out more and more of the cash flow. You expect some fluctuations in payout of cash flow, but not for the dividends to take a bigger and bigger portion of the cash flow. This stock will potentially pay out around 50% of expected cash flow.
Going on to the growth figures, we are dealing with a rather mixed bag. The dividend growth is over 26% per year for the last 5 years and over 22% per year for the last 10 years. However, the last good dividend increase was in 2008 and there has been no dividend increase this year. The growth in cash flow is not bad being 11.5% per year over the last 5 years and 8.8% per year over the last 10 years. However, growth in stock price over the last 5 years has been negative at -10% per year and there has been no growth over the last 10 years.
Turning to the Asset/Liability ratios, I find the A/L Ratio low, in the 1.20 range. I would prefer this at 1.50, but at least it is over 1.00. The liquidity ratio is also very low, being around 0.50. I like the liquidity ratio to be 1.50 also. With a liquidity ratios as low as it is, this means that the current assets cannot cover the current liabilities.
This used to be a great stock. I do not think that it has really recovered from the last bear market and it is hard to say how it will handle the current one. At the moment, I am not interested in this stock, but I will look at what the analysts say about it on Monday.
AGF is a Mutual Fund company. It owns AGF Trust Company. The company has a diversified group of products designed to meet a variety of investment objectives including GICs, term deposits, real estate secured loans, investment loans and home equity lines of credits. They sell their products in Canada. Its web site is www.agf.com. See my spreadsheet at www.spbrunner.com/stocks/agf.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, October 1, 2009
Bombardier Inc. 2
I am continuing review 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, and since that time, I have made a return of some 14% per year. This is, of course, over a very long term. This is an industrial company and therefore represents a very high risk. However, I think that everyone should have some industry stocks.
I looked at the Insider Buying and Insider Selling on this stock and there is more selling than buying. However, none of this amounts to much. I think that the company’s confidence in this stock is shown in the resumptions of dividends. The confidence will be shown more if and when the dividend is raised. It may appear that dividends increased between 2008 and 2009, but it is only that there were only two dividend payments in 2008 and there will be four payments in 2009.
In connection with the P/E, I get a current one of 11.5 based on expected earnings for this year. However, others sites are giving a current P/E ratio around 8 and 9 because of earnings to date. Both these ratios are low. I get a 5 year low average of 13, but because this stock has always been considered a growth stock, its usual P/E ratios have usually been very high. Mine are low because of the lack of earnings in 2003 to 2005.
When I look at the Graham Price, I find that the stock price is only 9% higher. This makes the Graham Price and stock price quite close. Because Bombardier is a growth stock, the Graham price is usually a lot lower than the stock price. When I look at the Price/Book Value ratio, I find the P/BV ratio to be only 60% of the 10 year average. This is certainly a buy signal as anything P/BV ratio 80% of 10 year average shows a good current price.
The only negative I see is the high accrual ratio and this is because the Operational Cash Flow is negative. Hopefully, this will change before the year end. I would think that a real positive signal would be shown when the dividends are increased.
If you look at the charts for less than 5 years, this stock has done better than the TSX and the Industrial Indexes. However, you go for a longer term, like the last 10 years, and both the TSX and the Industrial Indexes beat this stock.
When I look at recommendations on this stock, I find that there are lots of analysts following this stock and there is a wide divergent of opinion. Most analysts are in the Strong Buy and the Hold category. There are also a few in the Buy category. It will probably come as no surprise that the consensus is a Buy. (See my site for information on analyst ratings.)
Personally, I am going to hold on to my shares. I have no intentions of buying anymore at the present time. All the ratios that I review give a mixture of signals.
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 Montrรฉal, 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.
I looked at the Insider Buying and Insider Selling on this stock and there is more selling than buying. However, none of this amounts to much. I think that the company’s confidence in this stock is shown in the resumptions of dividends. The confidence will be shown more if and when the dividend is raised. It may appear that dividends increased between 2008 and 2009, but it is only that there were only two dividend payments in 2008 and there will be four payments in 2009.
In connection with the P/E, I get a current one of 11.5 based on expected earnings for this year. However, others sites are giving a current P/E ratio around 8 and 9 because of earnings to date. Both these ratios are low. I get a 5 year low average of 13, but because this stock has always been considered a growth stock, its usual P/E ratios have usually been very high. Mine are low because of the lack of earnings in 2003 to 2005.
When I look at the Graham Price, I find that the stock price is only 9% higher. This makes the Graham Price and stock price quite close. Because Bombardier is a growth stock, the Graham price is usually a lot lower than the stock price. When I look at the Price/Book Value ratio, I find the P/BV ratio to be only 60% of the 10 year average. This is certainly a buy signal as anything P/BV ratio 80% of 10 year average shows a good current price.
The only negative I see is the high accrual ratio and this is because the Operational Cash Flow is negative. Hopefully, this will change before the year end. I would think that a real positive signal would be shown when the dividends are increased.
If you look at the charts for less than 5 years, this stock has done better than the TSX and the Industrial Indexes. However, you go for a longer term, like the last 10 years, and both the TSX and the Industrial Indexes beat this stock.
When I look at recommendations on this stock, I find that there are lots of analysts following this stock and there is a wide divergent of opinion. Most analysts are in the Strong Buy and the Hold category. There are also a few in the Buy category. It will probably come as no surprise that the consensus is a Buy. (See my site for information on analyst ratings.)
Personally, I am going to hold on to my shares. I have no intentions of buying anymore at the present time. All the ratios that I review give a mixture of signals.
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 Montrรฉal, 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.
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