What I wanted to do today is compare the Canadian Banks that I follow. What I can categorize is that Insiders are doing a lot of selling. It this selling because our bankers need the money or is this selling due to the fact they lack faith in their banks. This is not clear. Unfortunately, insider selling is not a new problem with our banks. The insiders do not seem to keep stock options granted and they tend to have more options than shares.
None of the banks has raised their dividends in 2009. Part of the reason for this is that they are waiting to see if they will have deal with more new rules from our government. Most analysts feel that dividends will not be raised under the end of this year or early next year.
I have updated my index spreadsheet and I have re-arranged it with the Banks on top. See www.spbrunner.com/stocks/indexport.htm. I have also added in some further information on the banks. In this sub-section, I have looked at items to compare the banks on Buy Signals. If you had noticed, there is a big range of whether analysts feel you should currently buy any of these stocks. Three of the banks have recommendations ranging all the way from Strong Buy to Sell. Obviously, there is a big range of opinion on whether any of these banks should be bought.
The other thing I looked at was what yield you would get on your original investment if you held this stock for 5 or 10 years. The winners on this score are the Royal Bank and the Bank of Nova Scotia. Why I look at this is because I invest for the long term, and a high yield after holding a stock for 5 or 10 years is very desirable from my point of view. Another reason I look at this is because I live off the dividends that I earn.
When you lay out the different ratios and compare the Graham Price to the stock price, the TD bank would appear to be the cheapest. I admit I have only included a few ratios for the CIBC bank, as this is the one bank I do not follow. This might just be the cheapest. I do not follow it as I feel it is the worst run Canadian Bank. I do not think it is a long term stock to hold. However, you can make money on CIBC if you buy it when the stock price is depressed and you sell when it recovers.
If you look at the dividends and their returns, the best banks seem to be the Bank of Nova Scotia and the Royal Bank. I have shares in the Royal Bank and I am quite pleased with the returns I have made on this bank. I am especially pleased with the dividend income.
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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Thursday, December 31, 2009
Wednesday, December 30, 2009
Bank of Nova Scotia 2
I am continuing my review of the Bank of Nova Scotia (TSX-BNS). I follow this bank, but I have not invested in it. The reason I have not invested in this bank is that I already have enough bank investments with Bank of Montreal, TD Bank and Royal Bank. I think this is also a great bank.
As with my review of the other banks, insider selling is very high. In this bank, there is some insider buying, but little of it. All the insiders have far more stock options than shares. The insider selling is at $47.7M and the insider buying is at $1.3M. This bank has the lowest percentage of insider selling at .09% of the market cap of this stock. These banks certainly do not give potential buyers of their stock any good feelings about their stock when they are so busy dumping their shares.
When looking at P/E ratios, I find that the 5 year average low is 11 and the 5 year average high is 14.7. There is not much of a spread here in these ratios. The P/E Ratio I get for 2010 is 13.7. Sites that show a P/E based on last 12 months earnings get a higher P/E of 15. None of these P/E ratios are particularly low or high. So, we do not learn much from this.
When I look at the dividend yield, I get a current yield of 3.9% and the 5 year average is 4%. This is very close, but it is not telling you that the price is good. When I look at the Price/Book value, I find the current ratio is about 90% of the 10 year average. A good price signal is if the current ratio is 80% or less of the 10 year average. The last thing to look at is the Graham Price. I get a Graham Price for 2010 of $44.12 and the current price is some 10% above this. So, I find that none of the above point to a good current price. However, none of this point to an unreasonably high price neither.
When I look at Analysts recommendations, I find that they range from Strong Buy to Underperform. There are no sell recommendations on this stock. There are a lot of analysts following this stock and the vast majority of the recommendations are a Hold. The next highest recommendation is a Buy. The consensus would be a Hold. (See my site for information on analyst ratings.) The analysts giving this stock a buy, feels that this will be the first Canadian Bank to recover from the current crisis. The Holds feel that the price is a little high.
As I had said before, I do not intend to buy this stock personally, as I already have enough bank stocks. I certainly follow it because I may want to buy it in the future as I feel this is good, well run Canadian Bank. I think that the current price is a reasonable one. My only concern and I have this will all the banks, is the large amount of insider selling going on.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
As with my review of the other banks, insider selling is very high. In this bank, there is some insider buying, but little of it. All the insiders have far more stock options than shares. The insider selling is at $47.7M and the insider buying is at $1.3M. This bank has the lowest percentage of insider selling at .09% of the market cap of this stock. These banks certainly do not give potential buyers of their stock any good feelings about their stock when they are so busy dumping their shares.
When looking at P/E ratios, I find that the 5 year average low is 11 and the 5 year average high is 14.7. There is not much of a spread here in these ratios. The P/E Ratio I get for 2010 is 13.7. Sites that show a P/E based on last 12 months earnings get a higher P/E of 15. None of these P/E ratios are particularly low or high. So, we do not learn much from this.
When I look at the dividend yield, I get a current yield of 3.9% and the 5 year average is 4%. This is very close, but it is not telling you that the price is good. When I look at the Price/Book value, I find the current ratio is about 90% of the 10 year average. A good price signal is if the current ratio is 80% or less of the 10 year average. The last thing to look at is the Graham Price. I get a Graham Price for 2010 of $44.12 and the current price is some 10% above this. So, I find that none of the above point to a good current price. However, none of this point to an unreasonably high price neither.
When I look at Analysts recommendations, I find that they range from Strong Buy to Underperform. There are no sell recommendations on this stock. There are a lot of analysts following this stock and the vast majority of the recommendations are a Hold. The next highest recommendation is a Buy. The consensus would be a Hold. (See my site for information on analyst ratings.) The analysts giving this stock a buy, feels that this will be the first Canadian Bank to recover from the current crisis. The Holds feel that the price is a little high.
As I had said before, I do not intend to buy this stock personally, as I already have enough bank stocks. I certainly follow it because I may want to buy it in the future as I feel this is good, well run Canadian Bank. I think that the current price is a reasonable one. My only concern and I have this will all the banks, is the large amount of insider selling going on.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, December 29, 2009
Bank of Nova Scotia
The last bank I am reviewing is the Bank of Nova Scotia (TSX-BNS). I follow this bank, but I have not invested in it. The reason I have not invested in this bank is that I already have enough bank investments with Bank of Montreal, TD Bank and Royal Bank. I think this is also a great bank.
When you look at total return for the last 5 years, this bank has done better than the Bank of Montreal, but not as well as the TD Bank and the Royal Bank. The total return for the last 5 years was 6.7% per year. The 10 year total return was better at 14.6% per year. For this stock, slightly more than 4% per year was the Dividend return portion of the Total Return.
As with other Canadian banks, the dividend growth for this stock was good. It was some 12% per year for the last 5 years and some 16% per year for the last 10 years. This bank has relatively good growth in revenues over the last 5 years, coming in at just over 8% per year. However, the revenue growth for the last 10 years was not very good, coming in at just under 4% per year. The growth in Book Value for this stock was also quite good, coming in at 10.7% per year and 9.5% per year for the last 5 and 10 years. As the all Canadian Banks, cash flow is not great, and this year this bank as a negative cash flow.
As with all banks, this one has a low Asset/Liability Ratio. This ratio is at 1.05, which is pretty standard for Canadian Banks. This bank had the highest Return on Equity for 2009 and for the last 5 year average. These figures were 13.6% and 17.5% respectively. The last thing to mention is the Accrual Ratio. This is rather high at 4.5% and also, the Cash Flow from Operations was negative. Neither is good.
This bank has a fairly good year in 2009. I will review what the analysts say about this stock tomorrow.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When you look at total return for the last 5 years, this bank has done better than the Bank of Montreal, but not as well as the TD Bank and the Royal Bank. The total return for the last 5 years was 6.7% per year. The 10 year total return was better at 14.6% per year. For this stock, slightly more than 4% per year was the Dividend return portion of the Total Return.
As with other Canadian banks, the dividend growth for this stock was good. It was some 12% per year for the last 5 years and some 16% per year for the last 10 years. This bank has relatively good growth in revenues over the last 5 years, coming in at just over 8% per year. However, the revenue growth for the last 10 years was not very good, coming in at just under 4% per year. The growth in Book Value for this stock was also quite good, coming in at 10.7% per year and 9.5% per year for the last 5 and 10 years. As the all Canadian Banks, cash flow is not great, and this year this bank as a negative cash flow.
As with all banks, this one has a low Asset/Liability Ratio. This ratio is at 1.05, which is pretty standard for Canadian Banks. This bank had the highest Return on Equity for 2009 and for the last 5 year average. These figures were 13.6% and 17.5% respectively. The last thing to mention is the Accrual Ratio. This is rather high at 4.5% and also, the Cash Flow from Operations was negative. Neither is good.
This bank has a fairly good year in 2009. I will review what the analysts say about this stock tomorrow.
The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, December 28, 2009
Bank of Montreal 2
The bank I am currently dealing with is the Bank of Montreal (TSX-BMO). I invested in this bank in 1983. I have only tracked it on quicken since December 1987 and since then I have made a return of 16% per year. This has not done as well for me as the Royal Bank has. My dividend yield on my original investment is just over 19% per year.
This bank also has a huge amount of insider selling. The insider selling is 52.8M and the Insider buying is 1.4M over the past year. This is not as bad as the TD or the Royal Bank in dollar amount, but it is still heavy in selling. If you compare the selling to the market cap of this stock, the selling totals .18% for this stock and this put the selling between the Royal Bank and the TD Bank. The selling has been heavy since this stock hit bottom in March 2009. Here again the selling is of options. Insiders own far more in options than in stock.
You certainly to not get a warm fuzzy feeling about buying any Canadian Bank stock when the insiders are very busy dumping their shares. However, for this bank the CFO has retained his shares and has even added to them slightly by keeping options granted. This is not something that has happened for the other banks I have reviewed.
When looking at the Ratios, I find that the P/E at 12.8 is between the 5 year average low of 11 and the 5 year average high of 16. When you look at sites that use a P/E based on the last 12 months earnings, the P/E comes in higher closer to 17.5. The current dividend yield at 5.1% is higher than the 5 year average of 4.7%. When I look at the Price/Book Value, I find the current ratio is about 80% of the 10 year average, so this points to a good price.
The last price signal to look at is the Graham Price. The Graham Price at $59.41 is some 8.4% higher than the current price. From all this, I find that all price signals, except the P/E ratio, points to a good current price. The Accrual ratio gives no particular signal, but it is a good thing that it is negative.
The Globe Investor site gives this bank a 4 star rating. This is the rating they are giving to all 5 of Canada’s large banks. When I look at analysts recommendations, I find them ranging from Strong Buy to Sell. Most of the ratings are Buy and Hold, but there are some Underperform and at least 1 sell rating and one Strong Buy rating. (See my site for information on analyst ratings.) Some analysts like the current price, some think that it is fairly priced and some think that this bank will underperform our other banks.
I am happy to hold this stock and I will continue to do so. I will not be buying any more, because I already have enough. If you do not hold this stock and you like to have it for the long term, I think that the current price is very good. I have done quite well by this stock.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
This bank also has a huge amount of insider selling. The insider selling is 52.8M and the Insider buying is 1.4M over the past year. This is not as bad as the TD or the Royal Bank in dollar amount, but it is still heavy in selling. If you compare the selling to the market cap of this stock, the selling totals .18% for this stock and this put the selling between the Royal Bank and the TD Bank. The selling has been heavy since this stock hit bottom in March 2009. Here again the selling is of options. Insiders own far more in options than in stock.
You certainly to not get a warm fuzzy feeling about buying any Canadian Bank stock when the insiders are very busy dumping their shares. However, for this bank the CFO has retained his shares and has even added to them slightly by keeping options granted. This is not something that has happened for the other banks I have reviewed.
When looking at the Ratios, I find that the P/E at 12.8 is between the 5 year average low of 11 and the 5 year average high of 16. When you look at sites that use a P/E based on the last 12 months earnings, the P/E comes in higher closer to 17.5. The current dividend yield at 5.1% is higher than the 5 year average of 4.7%. When I look at the Price/Book Value, I find the current ratio is about 80% of the 10 year average, so this points to a good price.
The last price signal to look at is the Graham Price. The Graham Price at $59.41 is some 8.4% higher than the current price. From all this, I find that all price signals, except the P/E ratio, points to a good current price. The Accrual ratio gives no particular signal, but it is a good thing that it is negative.
The Globe Investor site gives this bank a 4 star rating. This is the rating they are giving to all 5 of Canada’s large banks. When I look at analysts recommendations, I find them ranging from Strong Buy to Sell. Most of the ratings are Buy and Hold, but there are some Underperform and at least 1 sell rating and one Strong Buy rating. (See my site for information on analyst ratings.) Some analysts like the current price, some think that it is fairly priced and some think that this bank will underperform our other banks.
I am happy to hold this stock and I will continue to do so. I will not be buying any more, because I already have enough. If you do not hold this stock and you like to have it for the long term, I think that the current price is very good. I have done quite well by this stock.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, December 23, 2009
Bank of Montreal
The next bank I want to deal with is the Bank of Montreal (TSX-BMO). I invested in this bank in 1983. I have only tracked it on quicken since December 1987 and since then I have made a return of 16% per year. This has not done as well for me as the Royal Bank has. My dividend yield on my original investment is just over 19% per year. This is after some 27 years and for the Royal Bank, I am making a 27.6% return after 15 years. However, the return on this bank is nothing to sneeze at.
The thing I notice about this bank is that it has not done was well as the other 4 I follow over the last 5 years. The 10 year total return is some 10% per year, but the 5 year total return is only 1.6%. This is not good. The dividends accounted for about 4.5% of the return in both periods. So, over the last 5 years, the stock has done badly. The growth in revenue is also not good. For the 5 and 10 year periods, the revenue growth is just under 4%.
The worse growth figures is in the earnings and over the last 5 years this has gone down at rate of 7% per year. The one place that it has kept up with the other banks is in dividend increases, and here it is the lowest, but not by much. It has increased dividends at 12% per year. However, of the 4 banks I follow, it has a higher payout than any other bank. The others have a payout rate in the 50% range and this bank’s payout is in the 60% range.
When I look at the Asset/Liability rate, this stock is also the lowest at 1.04. It also has the lowest Return on Equity for the last 5 years. The average 5 year rate is just over 13%. The ROE at the 2009 reporting date was just 8.8%. However, this was better than TD Bank, whose ROE at the 2009 reporting date was 7.6%. The best I can say about this bank is at least the Accrual Ratio was negative at -.2%.
I will not be posting tomorrow because of the holidays. I will post again on Monday, December 28, 2009. I will finish up on this bank and go on to the Bank of Nova Scotia. I will then post the spreadsheet showing all the figures, so you can compare these banks.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The thing I notice about this bank is that it has not done was well as the other 4 I follow over the last 5 years. The 10 year total return is some 10% per year, but the 5 year total return is only 1.6%. This is not good. The dividends accounted for about 4.5% of the return in both periods. So, over the last 5 years, the stock has done badly. The growth in revenue is also not good. For the 5 and 10 year periods, the revenue growth is just under 4%.
The worse growth figures is in the earnings and over the last 5 years this has gone down at rate of 7% per year. The one place that it has kept up with the other banks is in dividend increases, and here it is the lowest, but not by much. It has increased dividends at 12% per year. However, of the 4 banks I follow, it has a higher payout than any other bank. The others have a payout rate in the 50% range and this bank’s payout is in the 60% range.
When I look at the Asset/Liability rate, this stock is also the lowest at 1.04. It also has the lowest Return on Equity for the last 5 years. The average 5 year rate is just over 13%. The ROE at the 2009 reporting date was just 8.8%. However, this was better than TD Bank, whose ROE at the 2009 reporting date was 7.6%. The best I can say about this bank is at least the Accrual Ratio was negative at -.2%.
I will not be posting tomorrow because of the holidays. I will post again on Monday, December 28, 2009. I will finish up on this bank and go on to the Bank of Nova Scotia. I will then post the spreadsheet showing all the figures, so you can compare these banks.
BMO is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. They are international bank having banking in Canada and US. They have clients, corporate, institutional and governmental, in UK, Europe, Asia and South America. Its web site is www.bmo.com. See my spreadsheet at www.spbrunner.com/stocks/bmo.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, December 22, 2009
The Return of History, Robert Kagan
I want to get back to the stuff I love besides investing. The other thing is reading. I read a lot of great books and this one is no exception. This is not the first book I read by Robert Kagan. I read his of Paradise and Power also. His books are small, but he packs a lot into them. The full title of this book is The Return of History and the End of Dreams.
As a Canadian, I do not have the instinctive dislike of American as some of my follow citizens do, especially those living in places like Toronto, where I live. I do not mind that the US wants to make the world safe for their way of life. Because in doing so, they also make places like Canada possible. If the Chinese or Russians make the world safe for their way of life, I see not place for a country like Canada.
The Canadian way of life is somewhere between the American and the European. We are sort of capitalistic and sort of socialistic. We tend to muddle our way through things. However, Canada is a great place to life and a great country to raise kids in. I have always been grateful that I was born in a place like Canada, as there are so many awful places in the world that people are born into.
Now back to Robert Kagan and his book. The title of this book is because of Francis Fukuyama’s book called The End of History and the Last Man. In this book, which Frank wrote after the fall of the Berlin wall, he felt that the world would move towards liberal democracies politically. It is obvious now that this did not happen. There are a number of large states that are autocratic. Historically, this is a throw back to the nineteenth century, when in Europe you had mainly autocratic states, and very few liberal democracies, like US and Britain. He thinks that liberal democracies may well win in the end, but it could be a long and tough road.
Robert Kagan talks about China and Russia. He talks about the fact the most Russians and Chinese seem quite happy with their autocratic government. The Russians especially seem very happy with Putin. They seem to feel that as a democracy that they were shoved around by the West and now, with Putin in power, that can be a great power again.
He also talks about radical Islam. He does not believe that the radicals will be winners in the future. He certainly concedes that they can do a lot of damage, especially since they dream of destroying a great American city. However, what they really want is to take the world and their people back to the 7th century. He feels that even a lot of the most ardent Moslems do not want this and therefore, the radical cannot win.
The last thing Robert Kagan talks about is that the democracies should, and may well be forced to, band together if they want to survive and thrive in the current and future world. He thinks that the worlds governments will not all be liberal democracies in anytime that will help the current liberal democratic societies.
This book is well worth the price and the time it takes to read it. Robert Kagan is in Wikipedia, see Robert Kagan . He is also on YouTube, see After Words for an interview.
On my website is how to find this book on Amazon if you care to purchase it. See Kagan. Also, this book review and other books I have reviewed are on my website at Book Reviews.
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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
As a Canadian, I do not have the instinctive dislike of American as some of my follow citizens do, especially those living in places like Toronto, where I live. I do not mind that the US wants to make the world safe for their way of life. Because in doing so, they also make places like Canada possible. If the Chinese or Russians make the world safe for their way of life, I see not place for a country like Canada.
The Canadian way of life is somewhere between the American and the European. We are sort of capitalistic and sort of socialistic. We tend to muddle our way through things. However, Canada is a great place to life and a great country to raise kids in. I have always been grateful that I was born in a place like Canada, as there are so many awful places in the world that people are born into.
Now back to Robert Kagan and his book. The title of this book is because of Francis Fukuyama’s book called The End of History and the Last Man. In this book, which Frank wrote after the fall of the Berlin wall, he felt that the world would move towards liberal democracies politically. It is obvious now that this did not happen. There are a number of large states that are autocratic. Historically, this is a throw back to the nineteenth century, when in Europe you had mainly autocratic states, and very few liberal democracies, like US and Britain. He thinks that liberal democracies may well win in the end, but it could be a long and tough road.
Robert Kagan talks about China and Russia. He talks about the fact the most Russians and Chinese seem quite happy with their autocratic government. The Russians especially seem very happy with Putin. They seem to feel that as a democracy that they were shoved around by the West and now, with Putin in power, that can be a great power again.
He also talks about radical Islam. He does not believe that the radicals will be winners in the future. He certainly concedes that they can do a lot of damage, especially since they dream of destroying a great American city. However, what they really want is to take the world and their people back to the 7th century. He feels that even a lot of the most ardent Moslems do not want this and therefore, the radical cannot win.
The last thing Robert Kagan talks about is that the democracies should, and may well be forced to, band together if they want to survive and thrive in the current and future world. He thinks that the worlds governments will not all be liberal democracies in anytime that will help the current liberal democratic societies.
This book is well worth the price and the time it takes to read it. Robert Kagan is in Wikipedia, see Robert Kagan . He is also on YouTube, see After Words for an interview.
On my website is how to find this book on Amazon if you care to purchase it. See Kagan. Also, this book review and other books I have reviewed are on my website at Book Reviews.
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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, December 21, 2009
Royal Bank 2
On Friday I talked about the Royal Bank (TSX-RY) in which I have been invested in since 1995. Since that time, I have made a return of 19.5% per year. Another way I talked about how to look at this stock is that, on my original investment, I am now making some 27.6% per year on my original investment, after 15 years. This is important for me as I live off my dividends. Compare this to BMO, in which I have been invested in since 1983 and now make some 19.3% return on my initial investment. The BMO investment occurred 27 years ago. By this measure, Royal Bank has been a better investment.
When I look at Insider Buying and Insider Selling reports, I also find a lot of Insider Selling as I did for the TD Bank. Most of this also has to do with selling of options. Here again, the insiders have far more options than they do shares in the bank. However, the selling is not quite as bad as for TD Bank. Insider Selling is .11% of the stock’s market cap, compared with the TD, which has Insider Selling of .24% stock’s market cap. I know that both these figures are below 1%, but the amounts are substantial. Here the selling totals 85M. The Insider Buying is also higher for Royal, which is 7.3M compared to just less than 1M for the TD Bank.
When I look at ratios, the first one is on the P/E ratio. For this stock, I get a P/E of 12.7 for 2009. This is based on expected 2009 earnings. The sites using earnings of last 12 months get a P/E closer to 22. The 5 year average low for this stock is 11.4 and the 5 year average high is 16.8. My P/E is certainly closer to the low than the high. However, to signal a good price, you want a P/E less than the 5 year low.
For the Dividend Yield, I get a current one of 3.6% and the 5 year average is 3.7%. Here, a low price signal is a yield higher than the 5 year average. When I look at the Price/Book Value Ratio, I find that the current one is about 90% of the 10 year average. A good price signal is when the P/BV Ratio is 80% of the 10 year average. The last buy/sell signal I am looking at is the Graham Price. The current Graham Price is $50.30. The stock price is some 9% above this.
What all the above shows on price is that there is no strong buy signal, nor any strong sell signal either. The price is probably a reasonable one. The problem with a lot of the above is that most are based on expected earnings for 2009. The ones that are based on current values is the dividend yield and the P/BV and both these show a current reasonable price.
When I look at the analyst recommendations, I find them mostly at Strong Buy, Buy and Hold. I also found 1 Underperform recommendation. The consensus recommendation appears to be a Hold. Most analysts have a 12 month target price of $58 or $59. Because of this, they feel that there is not much room for stock price growth in the near future. (See my site for information on analyst ratings.)
When I look at the charts, I find that this stock has beaten the TSX and the Financial Sub-index for all periods from 6 months to 10 years. The further you go out the more it has beaten both indexes. The Financial Index has only been higher than the TSX from 10 year period and greater. The other thing to note is that for the last 5 and 10 years, this stocks total return includes dividends and dividends provided just over 4% of the total return.
I am happy with this stock. I do not intend to buy more for the simple reason it comprises too much of my portfolio. I have no plans to sell any either because it is not more than 10% of my portfolio. I have done well by this stock and I think the current price is relatively reasonable. When buying stock, what you want to look for are reasonable prices.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When I look at Insider Buying and Insider Selling reports, I also find a lot of Insider Selling as I did for the TD Bank. Most of this also has to do with selling of options. Here again, the insiders have far more options than they do shares in the bank. However, the selling is not quite as bad as for TD Bank. Insider Selling is .11% of the stock’s market cap, compared with the TD, which has Insider Selling of .24% stock’s market cap. I know that both these figures are below 1%, but the amounts are substantial. Here the selling totals 85M. The Insider Buying is also higher for Royal, which is 7.3M compared to just less than 1M for the TD Bank.
When I look at ratios, the first one is on the P/E ratio. For this stock, I get a P/E of 12.7 for 2009. This is based on expected 2009 earnings. The sites using earnings of last 12 months get a P/E closer to 22. The 5 year average low for this stock is 11.4 and the 5 year average high is 16.8. My P/E is certainly closer to the low than the high. However, to signal a good price, you want a P/E less than the 5 year low.
For the Dividend Yield, I get a current one of 3.6% and the 5 year average is 3.7%. Here, a low price signal is a yield higher than the 5 year average. When I look at the Price/Book Value Ratio, I find that the current one is about 90% of the 10 year average. A good price signal is when the P/BV Ratio is 80% of the 10 year average. The last buy/sell signal I am looking at is the Graham Price. The current Graham Price is $50.30. The stock price is some 9% above this.
What all the above shows on price is that there is no strong buy signal, nor any strong sell signal either. The price is probably a reasonable one. The problem with a lot of the above is that most are based on expected earnings for 2009. The ones that are based on current values is the dividend yield and the P/BV and both these show a current reasonable price.
When I look at the analyst recommendations, I find them mostly at Strong Buy, Buy and Hold. I also found 1 Underperform recommendation. The consensus recommendation appears to be a Hold. Most analysts have a 12 month target price of $58 or $59. Because of this, they feel that there is not much room for stock price growth in the near future. (See my site for information on analyst ratings.)
When I look at the charts, I find that this stock has beaten the TSX and the Financial Sub-index for all periods from 6 months to 10 years. The further you go out the more it has beaten both indexes. The Financial Index has only been higher than the TSX from 10 year period and greater. The other thing to note is that for the last 5 and 10 years, this stocks total return includes dividends and dividends provided just over 4% of the total return.
I am happy with this stock. I do not intend to buy more for the simple reason it comprises too much of my portfolio. I have no plans to sell any either because it is not more than 10% of my portfolio. I have done well by this stock and I think the current price is relatively reasonable. When buying stock, what you want to look for are reasonable prices.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Friday, December 18, 2009
Royal Bank
The next bank I want to deal with is the Royal Bank (TSX-RY). I have invested in this bank also. I have been invested in this bank in 1995 and since that time, I have made a return of 19.5% per year. Canadian banks have been great investments. I have also have had two 2 for 1 stocks splits under this bank. I have felt for sometime that this is one of the best Canadian Banks.
The dividend comments I made on the TD Bank yesterday, also apply to Royal Bank. People do not expect any dividend increases on our banks until at least the end of 2010. The problem is not only that the banks want to strengthen their balance sheets; they are also concerned that our government may bring in new regulations. They want to see what, if any, new regulations that the government might impose before they commit to higher dividends. Royal Bank has also done great in dividend increases in the past. In the last 5 and 10 years, the dividend increases have been at 14.6% per year and 15.5% per year on average.
When you look at growth rates, the Royal Bank has done better than the TD Bank except for increase in Book Value over the last 5 years. It has done especially better in growth in Revenue and Earnings. Although these growth rates are not terrific, the Royal Bank has still done a lot better than the TD Bank.
The main spot for both banks that I do not like is the lack of growth or just any Operating Cash Flow. None of our banks are great at this. However, I must admit, that the Net Cash Flow for the banks are usually positive. Also, as with TD Bank, this bank has a better 5 year running average for the Return on Equity (ROE) than for 2009. However, the Royal Bank’s 9.7% ROE is not bad.
As for other banks, the Asset/Liability Ratio is low at 1.06, but it is in line with this ratio on other banks. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 17.7 and this is high, but it is better than the 5 year average of 23.
I am happy with this stock and I intend to hold on to what I have. Another way to look at this stock is that, on my original investment, I am now making some 27.6% per year after 15 years. This is important for me as I live off my dividends.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The dividend comments I made on the TD Bank yesterday, also apply to Royal Bank. People do not expect any dividend increases on our banks until at least the end of 2010. The problem is not only that the banks want to strengthen their balance sheets; they are also concerned that our government may bring in new regulations. They want to see what, if any, new regulations that the government might impose before they commit to higher dividends. Royal Bank has also done great in dividend increases in the past. In the last 5 and 10 years, the dividend increases have been at 14.6% per year and 15.5% per year on average.
When you look at growth rates, the Royal Bank has done better than the TD Bank except for increase in Book Value over the last 5 years. It has done especially better in growth in Revenue and Earnings. Although these growth rates are not terrific, the Royal Bank has still done a lot better than the TD Bank.
The main spot for both banks that I do not like is the lack of growth or just any Operating Cash Flow. None of our banks are great at this. However, I must admit, that the Net Cash Flow for the banks are usually positive. Also, as with TD Bank, this bank has a better 5 year running average for the Return on Equity (ROE) than for 2009. However, the Royal Bank’s 9.7% ROE is not bad.
As for other banks, the Asset/Liability Ratio is low at 1.06, but it is in line with this ratio on other banks. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 17.7 and this is high, but it is better than the 5 year average of 23.
I am happy with this stock and I intend to hold on to what I have. Another way to look at this stock is that, on my original investment, I am now making some 27.6% per year after 15 years. This is important for me as I live off my dividends.
This is a bank. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. It operates in Canada, USA, Caribbean, and other places around the globe. Its web site is www.rbc.com. See my spreadsheet at www.spbrunner.com/stocks/ry.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Thursday, December 17, 2009
Toronto Dominion Bank 2
Today, I want to finish my review of this stock (TSX-TD). I first bought this bank in 2000 and I bought some more this year. The price of this stock was too good this year to pass up. On this stock, I have made a return of 13% per year. I should point out that on the stock I bought in 2000; I have made a return of 8.8% per year. On the stock I bought this year, I have made a return of just over 25% per year.
The first thing to discuss is Insider Buying and Insider Selling. On this stock, there is mainly just Insider Selling. Insider Selling is at 130M for the past year. The net Insider Selling is at 129.1M. As you can see, there is not much buying. This, together with the lack of a dividend increase, and you got to feel that insiders do not much faith in TD. This is a huge negative against buying any of TD’s stock.
Now, lets move on to the Ratios. First, I will talk about the P/E ratios. For this stock, the P/Es based on last 12 months earnings are higher than mine based on expected earnings. This is because this bank is expected to earn more in 2010 than it did in 2009. I get a P/E of 12. The 5 year average low is 11 and the 5 year average high is 15.5. This puts the P/E close to the low. The next item is the dividend yield. The current yield is 3.7% and the 5 year average is 3.4%. This means that the current price is relatively good.
The last ratio to look at is the Price/Book Value ratio. This current ratio at 1.37 is just 70% of the 10 year average. This shows a very good relative price. A good price is when the current Ratio is 80% or less of the 10 year average. The next thing to talk about is the Graham Price. Currently the Graham Price is $59.33, which is 8% lower than the current stock price of $64.23. The expected Graham Price for 2010 is $74.36 and this is almost 14% higher than the current stock price. The Graham Price for 2008 was $65.45 and this is higher than the current stock price. All this would point to a good current stock price.
Globe Investor site gives this bank a 4 star rating. When I look at the recommendations for this stock, I see calls that cover the full range from Strong Buy, Buy, Hold, Underperform and Sell. However, the dominate recommendations are Strong Buy, Buy and Hold. There is very few of the other two. The consensus recommendation would be a buy. (See my site for information on analyst ratings.) You can see from all this there is a very wide range of opinion on this stock.
Our banks certainly have current problems. However, if you believe that TD will get back on track, make money and start increasing their dividends again, then you should be looking at an opportune time to buy the stock. The best time to get the lowest price is when there are problems are others are selling. I have long term faith in this bank and so, I will hold what I own for now. I will sell only when this stock becomes too much of my portfolio, or I find a bank I like better.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The first thing to discuss is Insider Buying and Insider Selling. On this stock, there is mainly just Insider Selling. Insider Selling is at 130M for the past year. The net Insider Selling is at 129.1M. As you can see, there is not much buying. This, together with the lack of a dividend increase, and you got to feel that insiders do not much faith in TD. This is a huge negative against buying any of TD’s stock.
Now, lets move on to the Ratios. First, I will talk about the P/E ratios. For this stock, the P/Es based on last 12 months earnings are higher than mine based on expected earnings. This is because this bank is expected to earn more in 2010 than it did in 2009. I get a P/E of 12. The 5 year average low is 11 and the 5 year average high is 15.5. This puts the P/E close to the low. The next item is the dividend yield. The current yield is 3.7% and the 5 year average is 3.4%. This means that the current price is relatively good.
The last ratio to look at is the Price/Book Value ratio. This current ratio at 1.37 is just 70% of the 10 year average. This shows a very good relative price. A good price is when the current Ratio is 80% or less of the 10 year average. The next thing to talk about is the Graham Price. Currently the Graham Price is $59.33, which is 8% lower than the current stock price of $64.23. The expected Graham Price for 2010 is $74.36 and this is almost 14% higher than the current stock price. The Graham Price for 2008 was $65.45 and this is higher than the current stock price. All this would point to a good current stock price.
Globe Investor site gives this bank a 4 star rating. When I look at the recommendations for this stock, I see calls that cover the full range from Strong Buy, Buy, Hold, Underperform and Sell. However, the dominate recommendations are Strong Buy, Buy and Hold. There is very few of the other two. The consensus recommendation would be a buy. (See my site for information on analyst ratings.) You can see from all this there is a very wide range of opinion on this stock.
Our banks certainly have current problems. However, if you believe that TD will get back on track, make money and start increasing their dividends again, then you should be looking at an opportune time to buy the stock. The best time to get the lowest price is when there are problems are others are selling. I have long term faith in this bank and so, I will hold what I own for now. I will sell only when this stock becomes too much of my portfolio, or I find a bank I like better.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, December 16, 2009
Toronto Dominion Bank
As I said yesterday, since the Canadian Banks have now reported, I will start reviewing them. The first thing to note is dividends. Since none have upped their dividends this year, (except for Laurentian Bank), I heard that the Canadian banks will be taken off the dividend lists I follow. I looked at these lists today and find they are still there. Most people seem to think that the big five banks will not be increasing their dividends until at least at the end of 2010 or early 2011. I cannot find the banks saying anything, so I guess we will just have to wait.
I first bought this bank (TSX-TD) in 2000 and I bought some more this year. The price of this stock was too good this year to pass up. However, I did sell as small amount of shares (200) when they went up $10 a share. I still have lots. On this stock, I have made a return of 13% per year. I should point out that on the stock I bought in 2000; I have made a return of 8.8% per year. On the stock I bought this year, I have made a return of just over 25% per year.
Considering we are in a recession that has hit banks hard, the return on the stock I bought in 2000 is good. The other thing to point out is the dividends. Almost 3.5% of my return is in dividends. I have a lot of bank stock and generally, the return on Canadian bank stock has been very good. Even though the dividend was not increased this year, over the last 5 years, the growth in dividends has still been very good at 12.4% per year.
The other only bright spot in growth in this stock is the growth in Book Value. The other growth figures, on things like revenues and earnings are not good, but this is to be expected at this point in the business cycle. Looking at the Return on Equity (ROE), this was only 7.6% for the financial year ending October 2009. The 5 year average of 13.8% is, of course, much better.
When we look at the Asset/Liability Ratio, I find it low at 1.07. However, all banks are low and are generally at around 1.04. So this is better than most. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 14.4this is high, but it is better than the 5 year average of 19. TD bank also tends to have a better than average A/BV ratio that other banks in Canada.
I am happy with this stock and I intend to hold on to what I have. The only thing I worry about is having too high a percentage of my portfolio in one stock or in one sector. I might in the future sell some if this stock becomes too high a percentage of my portfolio.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html
I first bought this bank (TSX-TD) in 2000 and I bought some more this year. The price of this stock was too good this year to pass up. However, I did sell as small amount of shares (200) when they went up $10 a share. I still have lots. On this stock, I have made a return of 13% per year. I should point out that on the stock I bought in 2000; I have made a return of 8.8% per year. On the stock I bought this year, I have made a return of just over 25% per year.
Considering we are in a recession that has hit banks hard, the return on the stock I bought in 2000 is good. The other thing to point out is the dividends. Almost 3.5% of my return is in dividends. I have a lot of bank stock and generally, the return on Canadian bank stock has been very good. Even though the dividend was not increased this year, over the last 5 years, the growth in dividends has still been very good at 12.4% per year.
The other only bright spot in growth in this stock is the growth in Book Value. The other growth figures, on things like revenues and earnings are not good, but this is to be expected at this point in the business cycle. Looking at the Return on Equity (ROE), this was only 7.6% for the financial year ending October 2009. The 5 year average of 13.8% is, of course, much better.
When we look at the Asset/Liability Ratio, I find it low at 1.07. However, all banks are low and are generally at around 1.04. So this is better than most. The other thing is banks tend to have lots of debt. The leverage (or Asset/Book Value ratio) is 14.4this is high, but it is better than the 5 year average of 19. TD bank also tends to have a better than average A/BV ratio that other banks in Canada.
I am happy with this stock and I intend to hold on to what I have. The only thing I worry about is having too high a percentage of my portfolio in one stock or in one sector. I might in the future sell some if this stock becomes too high a percentage of my portfolio.
TD is a bank with a full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is www.td.com. See my spreadsheet at www.spbrunner.com/stocks/td.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html
Tuesday, December 15, 2009
Life at the Bottom, Theodore Dalrymple
I spend my mornings reading. I read a lot of interesting books and I would like to share some of them. None of my books are on the best sellers list, or very rarely on this list. They are all non-fiction. Also, since the Canadian Banks have reported their 2009 results, I will be updating my spreadsheets and reviewing them over the next few days. I follow 4 of the big 5 Canadian Banks.
Now back to Theodore Dalrymple. Theodore is a British doctor who was working in a British inter-city hospital and prison when he wrote the essays in this book. He also writes a column for the London Spectator. See Spectator.co.uk. He also writes for the City Journal. See City Journal. Most of his books are a collection of essays he has written.
This book has stories of women and men trapped in destructive behaviors and environments. It is a look at the underclass life in Britain and the stories are not pretty. The story I want to talk about is the first essay called “The Knife Went In”. This story is about men in prison who are there for killing another person with a knife. However, they take no responsibility for their actions.
He first talks about a murderer who thought he was unlucky and that was why he was in prison for murder. It was not his fault, but the fault of the victim who was stabbed. If he had not been where he was at the time of the murder, the murder would not have happened. It was the murderer who was the victim in all of this. The stabbing is described as “The knife went in.” He really was not at fault. It was all due to circumstances beyond his control.
In this essay, he first talks about it being a mistake to believe that all men want to be free. He says on the contrary, if freedom entails responsibility, many people want none of it. The men he meets in prison, he says think of themselves as putty in the hands of fate. They do not believe that their choices or actions have any bearing on what happens to them.
With the men he talks to in prison, they feel that it is not their fault that they are in prison for such things as robbery. He says that they echo the police who increasing blame theft on the owners of property for failing to take proper precautions to protect their property. Like one man who stole from churches, because they were easy pickings. It was not his fault, the fault lies in the fact that the churches are poorly secured and easy to break into.
This is not the only book of Theodore Dalrymple’s that I have read. I find him an extremely interesting to read. He has very different opinions on what is wrong with our society and I am sure not everyone likes him for his opinions. But I always find his books interesting and entertaining. Why else would I read him?
Theodore Dalrymple is a pen name. He used this name to disguise whom he was talking about. His real name is Anthony Daniels. He is in Wikipedia, see Anthony Daniels . He is also on YouTube, see Theodore Dalrymple in Buitenhof for an interview. He also gave a speech in New York at the Harvard Club. See Theodore Dalrymple - Our Culture, What's Left of It - June 2005 .
This book review and other books I have reviewed are on my website at Book Reviews. Also on my website is how to find this book on Amazon if you care to purchase it. See Dalrymple.
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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Now back to Theodore Dalrymple. Theodore is a British doctor who was working in a British inter-city hospital and prison when he wrote the essays in this book. He also writes a column for the London Spectator. See Spectator.co.uk. He also writes for the City Journal. See City Journal. Most of his books are a collection of essays he has written.
This book has stories of women and men trapped in destructive behaviors and environments. It is a look at the underclass life in Britain and the stories are not pretty. The story I want to talk about is the first essay called “The Knife Went In”. This story is about men in prison who are there for killing another person with a knife. However, they take no responsibility for their actions.
He first talks about a murderer who thought he was unlucky and that was why he was in prison for murder. It was not his fault, but the fault of the victim who was stabbed. If he had not been where he was at the time of the murder, the murder would not have happened. It was the murderer who was the victim in all of this. The stabbing is described as “The knife went in.” He really was not at fault. It was all due to circumstances beyond his control.
In this essay, he first talks about it being a mistake to believe that all men want to be free. He says on the contrary, if freedom entails responsibility, many people want none of it. The men he meets in prison, he says think of themselves as putty in the hands of fate. They do not believe that their choices or actions have any bearing on what happens to them.
With the men he talks to in prison, they feel that it is not their fault that they are in prison for such things as robbery. He says that they echo the police who increasing blame theft on the owners of property for failing to take proper precautions to protect their property. Like one man who stole from churches, because they were easy pickings. It was not his fault, the fault lies in the fact that the churches are poorly secured and easy to break into.
This is not the only book of Theodore Dalrymple’s that I have read. I find him an extremely interesting to read. He has very different opinions on what is wrong with our society and I am sure not everyone likes him for his opinions. But I always find his books interesting and entertaining. Why else would I read him?
Theodore Dalrymple is a pen name. He used this name to disguise whom he was talking about. His real name is Anthony Daniels. He is in Wikipedia, see Anthony Daniels . He is also on YouTube, see Theodore Dalrymple in Buitenhof for an interview. He also gave a speech in New York at the Harvard Club. See Theodore Dalrymple - Our Culture, What's Left of It - June 2005 .
This book review and other books I have reviewed are on my website at Book Reviews. Also on my website is how to find this book on Amazon if you care to purchase it. See Dalrymple.
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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, December 14, 2009
Fortis Inc 2
Today, I want to continue my review one of my favorite good conservative dividend paying stock. I had written a blog awhile ago about stating a portfolio, and so I want to review some of the stocks I mentioned. See my site for this blog. I feel this is a superior stock to TransCanada, although I know a lot of analyst like TransCanada better.
I first went to the Insider Buying and Insider Selling reports. Over the past year, there has been a bit of stock buying by some directors. A number of employees have been buying stock in this company under the company’s Employee Share Purchase Plan. This does not add up to a lot, but it shows that that a variety of insider’s have confidence in this company. The company also showed confidence in the stock by increasing their dividend this year.
The current P/E is between 18 and 19 depending on whether you use last 12 months earnings or earning estimates for this year. This P/E is rather high. For this stock, the 5 year average low is 15 and the 5 year average high is 20. So, on this basis also, the P/E is currently rather high. When I look at the dividend yield, I find that the 5 year average is 3% and the current dividend yield is 3.7%. On this basis, the stock price is good.
The other ratio I look at is the Price/Book Value ratio. On this basis, the stock price is good as the current ratio is just under 90% of the 10 year average. When I look at the Graham Price, I find that it is 7% below the current stock price. The 5 year average difference between the Graham Price and the Stock price is 23%. So although the stock price is above the Graham Price, the difference is not above the 5 year average.
The above is rather a mixed bag, but it does show that the current price is a relatively reasonable one. None is showing a strong buy signal. The one strong signal is the Accrual Ratio, which at 5.9% is showing a very negative signal. The other worrying thing is the Leverage Ratio (Asset/Book Value). This is rather high at 3.4. The company has a lot of debt. Unfortunately, lots of debt is quite common with utility stocks.
When I look at the recommendations for this stock, I see calls from Strong Buy, Buy, Hold and Underperform. (See my site for information on analyst ratings.) This stock has gone up just over 7% since mid November. A lot of analysts have projected the 12 month stock price to be between $28 and $30. If this is true, I would expect the Hold ratings, as the stock may have not much farther to rise over the next year. There is a wide variance in the recommendations. I could only find one Strong Buy and one underperform, with all the other recommendations being either a Buy or Hold. It is probably a toss up on what the consensus recommendation is, but it is probably a Hold.
For the 3, 5 and 10 year periods, this stock has done better than both the TSX and the Utilities Indexes. For the 6 month period and the 1 year period, the stock has done almost as well as the Utilities Index. It is on when you look at the past year that you see that the TSX has by a long ways done better than both this stock and the Utilities Index. The thing to remember is that the charts do not include dividends and this stock’s total return has 4% coming from dividend payments.
The other thing to remember is that Utilities in general and this stock in particular are not a volatile as the TSX Index. In recessions, this stock will not go as low as the TSX and it will not have the big run up in price after the recession. Over the long term, a less volatile stock will earn more money. If a stock declines 10%, to return to the original price, it has to rise about 11.5%. However, if it goes down 25%, it has to go up some 34% to get back to the original price. If a stock goes down 50%, it must go up 100% to get back to the original price.
Personally, I am happy with Fortis as being a back-bone stock in my portfolio. I will not be buying more for the simple fact I do not allow any one stock to be too high a percentage of my portfolio. I already have more than 5% of my portfolio in this stock.
Fortis is a diversified, international distribution utility holding company. This company provides gas and electricity to customers across Canada, through regulated holdings that include a natural gas utility in British Columbia, and electric utilities in 5 provinces in Canada, and 3 Caribbean countries. It owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns and operates hotels in eight Canadian provinces as well as commercial real estate in Atlantic Canada. Its web site is www.fortisinc.com. See my spreadsheet at www.spbrunner.com/stocks/fts.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
I first went to the Insider Buying and Insider Selling reports. Over the past year, there has been a bit of stock buying by some directors. A number of employees have been buying stock in this company under the company’s Employee Share Purchase Plan. This does not add up to a lot, but it shows that that a variety of insider’s have confidence in this company. The company also showed confidence in the stock by increasing their dividend this year.
The current P/E is between 18 and 19 depending on whether you use last 12 months earnings or earning estimates for this year. This P/E is rather high. For this stock, the 5 year average low is 15 and the 5 year average high is 20. So, on this basis also, the P/E is currently rather high. When I look at the dividend yield, I find that the 5 year average is 3% and the current dividend yield is 3.7%. On this basis, the stock price is good.
The other ratio I look at is the Price/Book Value ratio. On this basis, the stock price is good as the current ratio is just under 90% of the 10 year average. When I look at the Graham Price, I find that it is 7% below the current stock price. The 5 year average difference between the Graham Price and the Stock price is 23%. So although the stock price is above the Graham Price, the difference is not above the 5 year average.
The above is rather a mixed bag, but it does show that the current price is a relatively reasonable one. None is showing a strong buy signal. The one strong signal is the Accrual Ratio, which at 5.9% is showing a very negative signal. The other worrying thing is the Leverage Ratio (Asset/Book Value). This is rather high at 3.4. The company has a lot of debt. Unfortunately, lots of debt is quite common with utility stocks.
When I look at the recommendations for this stock, I see calls from Strong Buy, Buy, Hold and Underperform. (See my site for information on analyst ratings.) This stock has gone up just over 7% since mid November. A lot of analysts have projected the 12 month stock price to be between $28 and $30. If this is true, I would expect the Hold ratings, as the stock may have not much farther to rise over the next year. There is a wide variance in the recommendations. I could only find one Strong Buy and one underperform, with all the other recommendations being either a Buy or Hold. It is probably a toss up on what the consensus recommendation is, but it is probably a Hold.
For the 3, 5 and 10 year periods, this stock has done better than both the TSX and the Utilities Indexes. For the 6 month period and the 1 year period, the stock has done almost as well as the Utilities Index. It is on when you look at the past year that you see that the TSX has by a long ways done better than both this stock and the Utilities Index. The thing to remember is that the charts do not include dividends and this stock’s total return has 4% coming from dividend payments.
The other thing to remember is that Utilities in general and this stock in particular are not a volatile as the TSX Index. In recessions, this stock will not go as low as the TSX and it will not have the big run up in price after the recession. Over the long term, a less volatile stock will earn more money. If a stock declines 10%, to return to the original price, it has to rise about 11.5%. However, if it goes down 25%, it has to go up some 34% to get back to the original price. If a stock goes down 50%, it must go up 100% to get back to the original price.
Personally, I am happy with Fortis as being a back-bone stock in my portfolio. I will not be buying more for the simple fact I do not allow any one stock to be too high a percentage of my portfolio. I already have more than 5% of my portfolio in this stock.
Fortis is a diversified, international distribution utility holding company. This company provides gas and electricity to customers across Canada, through regulated holdings that include a natural gas utility in British Columbia, and electric utilities in 5 provinces in Canada, and 3 Caribbean countries. It owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns and operates hotels in eight Canadian provinces as well as commercial real estate in Atlantic Canada. Its web site is www.fortisinc.com. See my spreadsheet at www.spbrunner.com/stocks/fts.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Friday, December 11, 2009
Fortis Inc
Today, I want to review one of my favorite good conservative dividend paying stock. I had written a blog awhile ago about stating a portfolio, and so I want to review some of the stocks I mentioned. See my site for this blog. I feel this is a superior stock to TransCanada, although I know a lot of analyst like TransCanada better.
I first bought this stock in 1987 and I have since bought more in 1995 and 1998. I sold off some in 2005 because a number of analyst were worried the stock was over priced. I regret this. On this stock, I have made a return of 13% per year. This is a great long term stock, or at least it has been a great one for me. I no longer consider selling stock that gets over priced, if I feel that stock is a good long term one.
This stock increased their dividends this year. The increase was 4%. This is not as high as the long term average for this stock, but a good increase considering what other stocks did this year. This stock is on the dividend lists that I follow of Dividend Achievers at www.indxis.com/DividendAchievers.html and Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices).
If you look at the growth for all items of Revenues, Earnings, Dividends, Total Return, Cash Flow and Book Value over the last 5 and 10 years, you will find that this stock has done well, or very well, for all items. In my portfolio, this stock has consistently provided me with a good dividend and good stock increase. I think that in a stock, good, consistent returns are very valuable.
The Return on Equity (ROE) for this stock was a little low in 2007 and 2008 coming in at just over 7%. However, this has picked up to a much better 10.5% for this third quarter of this year. No stock is perfect and what I do not like is the low Liquidity Ratio and low Asset/Liability Ratio. The Liquidity ratio is of most concern as it is usually around 0.60 and 0.70. This means that current assets cannot cover current liabilities. The Asset/Liability Ratio is also low coming in at just under 1.40. I would prefer both these ratios to be 1.50. However, for as long as I have followed this stock, these ratios have been consistently in these low ranges.
The other negative thing is the Accrual Ratio tends to be high. Like the Liquidity Ratio, it has always been high. However, when you add in the Financial Cash Flow, this Ratio comes down to a reasonable level. The good thing about the Accrual Ratio is that the Operational Cash Flow is consistently above the Net Income and this is certainly good.
In closing, I would like to say that I am pleased with this stock and I intend to hold what I have. On Monday, I will review what analysts have to say about this stock.
Fortis is a diversified, international distribution utility holding company. This company provides gas and electricity to customers across Canada, through regulated holdings that include a natural gas utility in British Columbia, and electric utilities in 5 provinces in Canada, and 3 Caribbean countries. It owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns and operates hotels in eight Canadian provinces as well as commercial real estate in Atlantic Canada. Its web site is www.fortisinc.com. See my spreadsheet at www.spbrunner.com/stocks/fts.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
I first bought this stock in 1987 and I have since bought more in 1995 and 1998. I sold off some in 2005 because a number of analyst were worried the stock was over priced. I regret this. On this stock, I have made a return of 13% per year. This is a great long term stock, or at least it has been a great one for me. I no longer consider selling stock that gets over priced, if I feel that stock is a good long term one.
This stock increased their dividends this year. The increase was 4%. This is not as high as the long term average for this stock, but a good increase considering what other stocks did this year. This stock is on the dividend lists that I follow of Dividend Achievers at www.indxis.com/DividendAchievers.html and Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices).
If you look at the growth for all items of Revenues, Earnings, Dividends, Total Return, Cash Flow and Book Value over the last 5 and 10 years, you will find that this stock has done well, or very well, for all items. In my portfolio, this stock has consistently provided me with a good dividend and good stock increase. I think that in a stock, good, consistent returns are very valuable.
The Return on Equity (ROE) for this stock was a little low in 2007 and 2008 coming in at just over 7%. However, this has picked up to a much better 10.5% for this third quarter of this year. No stock is perfect and what I do not like is the low Liquidity Ratio and low Asset/Liability Ratio. The Liquidity ratio is of most concern as it is usually around 0.60 and 0.70. This means that current assets cannot cover current liabilities. The Asset/Liability Ratio is also low coming in at just under 1.40. I would prefer both these ratios to be 1.50. However, for as long as I have followed this stock, these ratios have been consistently in these low ranges.
The other negative thing is the Accrual Ratio tends to be high. Like the Liquidity Ratio, it has always been high. However, when you add in the Financial Cash Flow, this Ratio comes down to a reasonable level. The good thing about the Accrual Ratio is that the Operational Cash Flow is consistently above the Net Income and this is certainly good.
In closing, I would like to say that I am pleased with this stock and I intend to hold what I have. On Monday, I will review what analysts have to say about this stock.
Fortis is a diversified, international distribution utility holding company. This company provides gas and electricity to customers across Canada, through regulated holdings that include a natural gas utility in British Columbia, and electric utilities in 5 provinces in Canada, and 3 Caribbean countries. It owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns and operates hotels in eight Canadian provinces as well as commercial real estate in Atlantic Canada. Its web site is www.fortisinc.com. See my spreadsheet at www.spbrunner.com/stocks/fts.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Thursday, December 10, 2009
TransCanada Corp 2
Today, I want to continue my review of this good conservative dividend paying stock. I had written a blog awhile ago about stating a portfolio, and so I want to review some of this stocks I talked about. See my site for this blog. I have starting with TransCanada Corp as I just read a review on this stock that said now was a good time to buy it.
In the Insider Buying and Insider Selling report, I see lots of selling and minimal buying. What appears to be happening is a number of officers of the company and CEO are selling off their stock options. In this company, they seem to have more stock options than stock. The amount of actual stock they hold has not really changed much. I do not much like it when insiders have more stock options than stock. However, this negative can be offset by the confidence the company has shown in the stock by increasing the dividends this year.
I noticed that the earnings and cash flow estimates have gone down since I had picked them up initially earlier this year. When I look at the 5 year average P/E ratios, the average low is just over 13 and the average high is just over 16. I get a current P/E of just over 17. A P/E of 17 is a little high, but not overly so. I get a current dividend yield of 4.3% and the 5 year average is 3.8%. So this dividend yield shows a good current price. The current Price/Book Value is less than 80% of the 10 year average, so this is also pointing to a good current price.
I find that the current stock price of $34.86 is 8.5% higher than the current Graham price of $32.12. Over the last 5 years, the stock price has been about 21% higher than the Graham price. A good stock price is at or below the Graham price. However, the relationship of stock price to Graham price is better than normal.
If you are looking at buy signals, the ones are the Price/Book Value ratio and the higher dividend yield. The P/E ratio and the Graham Price do not tell us much. What I find really negative is the very high Accrual Ratio. It is 11.4% and anything higher than 5% is negative.
However, the average analyst recommendations do not agree with me. The recommendations are lots of Strong Buys, Buys and a few Holds. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) There are a lot of analysts that feel that now is a good time to buy this stock.
If you look at the charts, this stock is very close to the Utilities Index and below the TSX for periods of 6 months, 1 year, 3 years and 5 years. It is only when you look at the stock over the last 10 years, does it beat the TSX and the Utilities. At 10 years, the Utilities Index also beats the TSX index. The thing to note is the indexes only show stock prices. This stock, as most Utilities stock pays a good dividend. In the case of this stock, the dividend over the last 10 years increased total return by over 4% per year.
I do have this stock and I have made a decent return on it since I bought it, but it is not a favorite stock of mine. Tomorrow, I will talk of my favorite, Fortis Inc.
TransCanada’s businesses are organized into two segments: Pipelines and Energy. The Pipelines business is principally comprised of TransCanada’s pipelines in Canada, the United States and Mexico. The Energy business includes power operations, natural gas storage and liquefied natural gas (LNG). Its web site is www.transcanada.com. See my spreadsheet at www.spbrunner.com/stocks/trp.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
In the Insider Buying and Insider Selling report, I see lots of selling and minimal buying. What appears to be happening is a number of officers of the company and CEO are selling off their stock options. In this company, they seem to have more stock options than stock. The amount of actual stock they hold has not really changed much. I do not much like it when insiders have more stock options than stock. However, this negative can be offset by the confidence the company has shown in the stock by increasing the dividends this year.
I noticed that the earnings and cash flow estimates have gone down since I had picked them up initially earlier this year. When I look at the 5 year average P/E ratios, the average low is just over 13 and the average high is just over 16. I get a current P/E of just over 17. A P/E of 17 is a little high, but not overly so. I get a current dividend yield of 4.3% and the 5 year average is 3.8%. So this dividend yield shows a good current price. The current Price/Book Value is less than 80% of the 10 year average, so this is also pointing to a good current price.
I find that the current stock price of $34.86 is 8.5% higher than the current Graham price of $32.12. Over the last 5 years, the stock price has been about 21% higher than the Graham price. A good stock price is at or below the Graham price. However, the relationship of stock price to Graham price is better than normal.
If you are looking at buy signals, the ones are the Price/Book Value ratio and the higher dividend yield. The P/E ratio and the Graham Price do not tell us much. What I find really negative is the very high Accrual Ratio. It is 11.4% and anything higher than 5% is negative.
However, the average analyst recommendations do not agree with me. The recommendations are lots of Strong Buys, Buys and a few Holds. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) There are a lot of analysts that feel that now is a good time to buy this stock.
If you look at the charts, this stock is very close to the Utilities Index and below the TSX for periods of 6 months, 1 year, 3 years and 5 years. It is only when you look at the stock over the last 10 years, does it beat the TSX and the Utilities. At 10 years, the Utilities Index also beats the TSX index. The thing to note is the indexes only show stock prices. This stock, as most Utilities stock pays a good dividend. In the case of this stock, the dividend over the last 10 years increased total return by over 4% per year.
I do have this stock and I have made a decent return on it since I bought it, but it is not a favorite stock of mine. Tomorrow, I will talk of my favorite, Fortis Inc.
TransCanada’s businesses are organized into two segments: Pipelines and Energy. The Pipelines business is principally comprised of TransCanada’s pipelines in Canada, the United States and Mexico. The Energy business includes power operations, natural gas storage and liquefied natural gas (LNG). Its web site is www.transcanada.com. See my spreadsheet at www.spbrunner.com/stocks/trp.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, December 9, 2009
TransCanada Corp
Today, I want to start reviewing some good conservative dividend paying stock. I had written a blog awhile ago about stating a portfolio, and so I want to review some of these stocks. See my site for this blog. I am starting with TransCanada Corp as I just read a review on this stock that said now was a good time to buy it.
I first bought this stock in 2000 and I bought some more in 2006. I have made a return of 10.5% on this stock. If you look on the spreadsheet, the 5 year and 10 year total return is just under 8% per year. The dividend payments have been just over 4% per year during both these periods. This stock has had good returns for a low risk investment.
The things that analyst note about this stock is that it is a low risk investment. It also has solid dividends. It should soon see better earnings from its Ravenswood Power Plant in NYC next year and it is building the Keystone pipeline to pile oil from Alberta to the Midwest of USA. It is felt that the share price of this stock should rise nicely in the next 12 months.
The growth figures on this stock are a mixed bag, but they are mostly not bad. They have been issuing shares to fund projects, so even though things like revenue has grown not badly over the years, the revenue growth per share is rather low, coming in a just under 5% per year over the past year. The last 12 months revenue grow by about 5.5% this year, but when you take into account the increase in shares, it has actually declined by 4.5%.
One good thing to talk about for this stock is that the dividends have steadily increased and the 5 year growth in dividends is just under 6% per year. They increased their dividends both last year and this year. There were a lot of stocks that did not increase their dividends this year. This company increased their dividends by just over 4%. The other good thing is the increase in Book Value per share. This has increase by over 10% per year over the last 5 years. The Book Value has also increase this year by just over 9.5% per share, even though new shares were issued.
The Liquidity ratio for this company is a little low at only 0.86, but the Asset/Liability Ratio is strong at 1.60. I like to see both these ratios at or above 1.50. The Return on Equity (ROE) is not bad for this stock. The 5 year average is 12% and the one for the year ending 2008 just over 11%. The ROE so far this year is running at a lower rate of 8.5%. This is still a decent figure.
I am happy with this stock. It is safe and its total returns are reasonable. I will talk more tomorrow, on what the analyst’s recommendations are.
TransCanada’s businesses are organized into two segments: Pipelines and Energy. The Pipelines business is principally comprised of TransCanada’s pipelines in Canada, the United States and Mexico. The Energy business includes power operations, natural gas storage and liquefied natural gas (LNG). Its web site is www.transcanada.com. See my spreadsheet at www.spbrunner.com/stocks/trp.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
I first bought this stock in 2000 and I bought some more in 2006. I have made a return of 10.5% on this stock. If you look on the spreadsheet, the 5 year and 10 year total return is just under 8% per year. The dividend payments have been just over 4% per year during both these periods. This stock has had good returns for a low risk investment.
The things that analyst note about this stock is that it is a low risk investment. It also has solid dividends. It should soon see better earnings from its Ravenswood Power Plant in NYC next year and it is building the Keystone pipeline to pile oil from Alberta to the Midwest of USA. It is felt that the share price of this stock should rise nicely in the next 12 months.
The growth figures on this stock are a mixed bag, but they are mostly not bad. They have been issuing shares to fund projects, so even though things like revenue has grown not badly over the years, the revenue growth per share is rather low, coming in a just under 5% per year over the past year. The last 12 months revenue grow by about 5.5% this year, but when you take into account the increase in shares, it has actually declined by 4.5%.
One good thing to talk about for this stock is that the dividends have steadily increased and the 5 year growth in dividends is just under 6% per year. They increased their dividends both last year and this year. There were a lot of stocks that did not increase their dividends this year. This company increased their dividends by just over 4%. The other good thing is the increase in Book Value per share. This has increase by over 10% per year over the last 5 years. The Book Value has also increase this year by just over 9.5% per share, even though new shares were issued.
The Liquidity ratio for this company is a little low at only 0.86, but the Asset/Liability Ratio is strong at 1.60. I like to see both these ratios at or above 1.50. The Return on Equity (ROE) is not bad for this stock. The 5 year average is 12% and the one for the year ending 2008 just over 11%. The ROE so far this year is running at a lower rate of 8.5%. This is still a decent figure.
I am happy with this stock. It is safe and its total returns are reasonable. I will talk more tomorrow, on what the analyst’s recommendations are.
TransCanada’s businesses are organized into two segments: Pipelines and Energy. The Pipelines business is principally comprised of TransCanada’s pipelines in Canada, the United States and Mexico. The Energy business includes power operations, natural gas storage and liquefied natural gas (LNG). Its web site is www.transcanada.com. See my spreadsheet at www.spbrunner.com/stocks/trp.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, December 8, 2009
Goodfellow Inc 2
Today, I want to continue my review of this small cap stock (TSX-GDL) that I recently saw written-up. This stock is not well followed, and it looked interesting. I have been interested in small cap dividend paying stocks. After this, I want to go back and review some good conservative dividend paying stocks.
When I look at Insider Selling and Insider Buying report, I see two interesting things. All the buying was done below $7.00 a share and all the selling at over $7.00. The other thing to note is that insiders own or control about 60% of the shares of this company. However, there are such small amounts of both selling and buying on this stock that this really tells us nothing.
When you look at spreadsheet ratios, I find both the 5 year P/E low and P/E high figures quite low. The P/E high is only just above 12 and the P/E low is just above 6.4. I do not have a current P/E as I cannot find any earnings estimates for this stock. However, the sites that look at the last 12 months earnings, give a range between 12.4 and 8.6. There is a range because some included in the latest earnings those from extraordinary items and some did not include these extraordinary items. We should probably not include extraordinary items in this calculation, but a P/E of 12.4, although relatively high for this stock, is not particularly high.
When you look at the yield, the story is slightly different. The 5 year average is 4.7% and the current yield is 5.6%. This gives higher current yield that usual. This can point to a good current price. However, the problem with this stock is that just because the last dividend declared can be annualized to $.60 a share, there is no certainty that this company will declared the next dividend to be the same amount. This company tends to change the dividends declared a fair bit. Usually companies are consistent in their dividend declarations, as they usually declare dividends the same or higher than the last one. This company tends to vary each dividend declared, so you cannot be sure that the next one with be even at the same value as the last one.
When you look at the Price/Book Value ratio, I find that the current Price/Book Value is some 80% of the 5 year average. The lower current Price/Book Value Ratio shows a good current price. The other thing to note about the Book Value is that this stock is trading below Book Value. This means that the current stock price is less than the break up value of this company. This certainly points to a cheap stock price.
The Graham Price also points to a good current stock price as the Graham Price is at $19.17 and the stock price is only $10.80. This is a difference of just over 43%. The thing to note on this is that the Graham Price has been consistently below the stock price on average of about 40%.
Globe investor gives this stock a 3 star rating. When I look at analysts recommendations, I find only one Buy recommendation. (See my site for information on analyst ratings.) This is a small cap stock with heavy insider ownership, so few people follow it. I did find another blogger who likes this stock. See canadianbengraham.blogspot.com.
The last thing to point out on this stock is the negative and very low Accrual Ratio. This Ratio at -6 is certainly a buy signal. I have finished buying what stock I wanted for this year, but I intend to continue to track this stock as I find it both interesting and something I might want to buy in the future.
Goodfellow is a wholesaler and distributor of wood and wood by-products with headquarters located in Delson, Québec. We have wood treating facilities and offer a full inventory of exterior siding, flooring,
plywood, treated wood and prefabricated products as well as a broad range of hardwood, softwood and exotic woods. It has distributions centers in Canada and US. Its web site is www.goodfellowinc.com. See my spreadsheet at www.spbrunner.com/stocks/gdl.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When I look at Insider Selling and Insider Buying report, I see two interesting things. All the buying was done below $7.00 a share and all the selling at over $7.00. The other thing to note is that insiders own or control about 60% of the shares of this company. However, there are such small amounts of both selling and buying on this stock that this really tells us nothing.
When you look at spreadsheet ratios, I find both the 5 year P/E low and P/E high figures quite low. The P/E high is only just above 12 and the P/E low is just above 6.4. I do not have a current P/E as I cannot find any earnings estimates for this stock. However, the sites that look at the last 12 months earnings, give a range between 12.4 and 8.6. There is a range because some included in the latest earnings those from extraordinary items and some did not include these extraordinary items. We should probably not include extraordinary items in this calculation, but a P/E of 12.4, although relatively high for this stock, is not particularly high.
When you look at the yield, the story is slightly different. The 5 year average is 4.7% and the current yield is 5.6%. This gives higher current yield that usual. This can point to a good current price. However, the problem with this stock is that just because the last dividend declared can be annualized to $.60 a share, there is no certainty that this company will declared the next dividend to be the same amount. This company tends to change the dividends declared a fair bit. Usually companies are consistent in their dividend declarations, as they usually declare dividends the same or higher than the last one. This company tends to vary each dividend declared, so you cannot be sure that the next one with be even at the same value as the last one.
When you look at the Price/Book Value ratio, I find that the current Price/Book Value is some 80% of the 5 year average. The lower current Price/Book Value Ratio shows a good current price. The other thing to note about the Book Value is that this stock is trading below Book Value. This means that the current stock price is less than the break up value of this company. This certainly points to a cheap stock price.
The Graham Price also points to a good current stock price as the Graham Price is at $19.17 and the stock price is only $10.80. This is a difference of just over 43%. The thing to note on this is that the Graham Price has been consistently below the stock price on average of about 40%.
Globe investor gives this stock a 3 star rating. When I look at analysts recommendations, I find only one Buy recommendation. (See my site for information on analyst ratings.) This is a small cap stock with heavy insider ownership, so few people follow it. I did find another blogger who likes this stock. See canadianbengraham.blogspot.com.
The last thing to point out on this stock is the negative and very low Accrual Ratio. This Ratio at -6 is certainly a buy signal. I have finished buying what stock I wanted for this year, but I intend to continue to track this stock as I find it both interesting and something I might want to buy in the future.
Goodfellow is a wholesaler and distributor of wood and wood by-products with headquarters located in Delson, Québec. We have wood treating facilities and offer a full inventory of exterior siding, flooring,
plywood, treated wood and prefabricated products as well as a broad range of hardwood, softwood and exotic woods. It has distributions centers in Canada and US. Its web site is www.goodfellowinc.com. See my spreadsheet at www.spbrunner.com/stocks/gdl.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Monday, December 7, 2009
Goodfellow Inc
Today, I want to review a small cap stock that I recently saw a write-up on. The stock is called Goodfellow Inc (TSX-GDL). It is not well followed, and it looked interesting. I have been interested in small cap dividend paying stocks. After this, I want to go back and review some good conservative dividend paying stocks.
The growth figures on this stock are a mixed bag, but they are mostly not good. First of all, I should say that I could find the figures I needed for the last 5 years, and some going back 7 years. The company does not post their financial statements on their site, so they were difficult to pick up. One thing to note is that over the last 7 years, the revenues for this company have gone nowhere. The 5 year growth is almost -3%. Earnings are the same and the 5 year growth is just over -8%.
This stock does pay dividends, but they are not consistent. They seem to fluctuate with what they can afford, but this is not particularly clear. Perhaps it has more to do with the fact that insiders own around 60% of the outstanding stock of this company. The 5 year growth for dividends is some 3.3%. This looks good until you see that the dividends paid in 2006 and 2007 where higher than the current dividends. It is hard to tell if there were special dividends paid. Certainly, a dividend payment in 2006 was a special dividend, but that just means that the 2006 dividend is the same as the one today.
Now, I want to talk about what I like about this stock. First of all the Liquidity Ratio and the Asset/Liability Ratio are great. The Liquidity Ratio at the August 2009 year end was 3.25. The 5 year average is 3.00. Also, the Asset/Liability Ratio was 3.94 at the August 2009 year end and the 5 year average is 2.77. This stock has a very strong balance sheet.
Another good thing is that the growth in cash flow is very good; it has grown by about 30% per year over the last 5 years. However, the 6 year growth in cash flow is only 11% per year, so this 5 year growth looks better than it actually is. However, the 6 year growth rate is still good. The Book Value has also grown, and although the 5 year growth rate of just over 6% is not great, it is not particularly bad either.
The last thing to mention today is the Accrual Ratio. This is great because it is negative and it is below -5% as this ratio sits at -6%. This stock certainly looks like it has possibilities. If you held this stock over the last 5 years, you would have broken even. However, if you had held it over the last 10 years, you would have made a total return of just under 8.5%. This stock has been hard hit by the current recession and it should recover nicely. I have finished my stock purchases for the year, so I will not be buying this, but I will track it for a while and see where it goes.
Goodfellow is a wholesaler and distributor of wood and wood by-products with headquarters located in Delson, Québec. We have wood treating facilities and offer a full inventory of exterior siding, flooring,
plywood, treated wood and prefabricated products as well as a broad range of hardwood, softwood and exotic woods. It has distributions centers in Canada and US. Its web site is www.goodfellowinc.com. See my spreadsheet at www.spbrunner.com/stocks/gdl.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The growth figures on this stock are a mixed bag, but they are mostly not good. First of all, I should say that I could find the figures I needed for the last 5 years, and some going back 7 years. The company does not post their financial statements on their site, so they were difficult to pick up. One thing to note is that over the last 7 years, the revenues for this company have gone nowhere. The 5 year growth is almost -3%. Earnings are the same and the 5 year growth is just over -8%.
This stock does pay dividends, but they are not consistent. They seem to fluctuate with what they can afford, but this is not particularly clear. Perhaps it has more to do with the fact that insiders own around 60% of the outstanding stock of this company. The 5 year growth for dividends is some 3.3%. This looks good until you see that the dividends paid in 2006 and 2007 where higher than the current dividends. It is hard to tell if there were special dividends paid. Certainly, a dividend payment in 2006 was a special dividend, but that just means that the 2006 dividend is the same as the one today.
Now, I want to talk about what I like about this stock. First of all the Liquidity Ratio and the Asset/Liability Ratio are great. The Liquidity Ratio at the August 2009 year end was 3.25. The 5 year average is 3.00. Also, the Asset/Liability Ratio was 3.94 at the August 2009 year end and the 5 year average is 2.77. This stock has a very strong balance sheet.
Another good thing is that the growth in cash flow is very good; it has grown by about 30% per year over the last 5 years. However, the 6 year growth in cash flow is only 11% per year, so this 5 year growth looks better than it actually is. However, the 6 year growth rate is still good. The Book Value has also grown, and although the 5 year growth rate of just over 6% is not great, it is not particularly bad either.
The last thing to mention today is the Accrual Ratio. This is great because it is negative and it is below -5% as this ratio sits at -6%. This stock certainly looks like it has possibilities. If you held this stock over the last 5 years, you would have broken even. However, if you had held it over the last 10 years, you would have made a total return of just under 8.5%. This stock has been hard hit by the current recession and it should recover nicely. I have finished my stock purchases for the year, so I will not be buying this, but I will track it for a while and see where it goes.
Goodfellow is a wholesaler and distributor of wood and wood by-products with headquarters located in Delson, Québec. We have wood treating facilities and offer a full inventory of exterior siding, flooring,
plywood, treated wood and prefabricated products as well as a broad range of hardwood, softwood and exotic woods. It has distributions centers in Canada and US. Its web site is www.goodfellowinc.com. See my spreadsheet at www.spbrunner.com/stocks/gdl.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Friday, December 4, 2009
Alliance Grain Traders Inc 2
I want to continue my review of this income trust (TSX-AGT) touted in the Money Show. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield. This is the last Income Trust that I got from the Money Show. This stock has already converted to a corporation.
When I look at Insider Selling and Insider Buying reports, I see some selling, but it happened in September 2009 and it was only for $10,000. This really tells us nothing. However, what I do see in this report is that the Arslan family owns just over 25% of the stock of this company.
When you look at spreadsheet ratios, I find that the 5 year average low P/E is almost 12%. The current P/E is lower at just under 11 and the forward P/E is just under 10. Any P/E of 10 or less is low, so the P/E is not bad. The other good indicator is the Graham Price is higher than the current stock price. Any stock price at or lower than the Graham Price is a good price. However, there is little space between the Graham Price of $26.73 and the Stock Price of $26.25.
When you look at yield and Price/Book Value, you get a different view. The 5 year average yield is just over 7% and the current yield is around 2%, so this has come down a lot. At the Money Show, most of the analysts expected that when the Income Trust changed to corporation, the yield would come in between 4% and 6%. This yield is a lot lower than that. The reason for this low yield is that the stock price has climbed over 205% since the end of 2008. When I look at the Price/Book Value, I find the 5 year average to be 1.40, but the current one to be higher at 2.02. The Price/Book Value ratio points to a relatively high current stock price.
Globe investor gives this stock a 4 star rating. When I look at analysts recommendations, I find Strong Buys recommendation and Buy recommendations. The consensus recommendation will be a Strong Buy. (See my site for information on analyst ratings.) The consensus is a Strong Buy because most of the recommendations are Strong Buy. It is felt that this company has a great future and that the purchase of Arbel Group was a great move.
I like to talk a bit more about the Accrual Ratio that I do not like. This is because a high Accrual Ratio can signal that there are problems. The format of a negative Operational Cash Flow, with a negative Investment Cash Flow and positive Financing Cash Flow is not bad in itself. It is what happens on a young fast growing company. This company could be classified as such. What really bothers me is the positive earnings with the above cash flow configuration. You have to wonder how good their earnings are.
As you can see from the recommendations, no one else seems bothered about the Accrual Ratio. The reviews I have read, feel that this is a great little company. It could be. However, I think that it is probably a risky investment. You get mixed signals from the ratios as to whether or not this is a good stock price. Perhaps the Graham Price is the best one to go by and this says the price is good.
Alliance Grain Traders Inc through its subsidiaries, Alliance Pulse Processors Inc. ("Alliance") and Arbel Group ("Arbel"), is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, U.S., Australia and Turkey handle the full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants. The company recent bought the Arbel Group of Mersin, Turkey. Its web site is www.alliancegraintraders.com. See my spreadsheet at www.spbrunner.com/stocks/agt.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
When I look at Insider Selling and Insider Buying reports, I see some selling, but it happened in September 2009 and it was only for $10,000. This really tells us nothing. However, what I do see in this report is that the Arslan family owns just over 25% of the stock of this company.
When you look at spreadsheet ratios, I find that the 5 year average low P/E is almost 12%. The current P/E is lower at just under 11 and the forward P/E is just under 10. Any P/E of 10 or less is low, so the P/E is not bad. The other good indicator is the Graham Price is higher than the current stock price. Any stock price at or lower than the Graham Price is a good price. However, there is little space between the Graham Price of $26.73 and the Stock Price of $26.25.
When you look at yield and Price/Book Value, you get a different view. The 5 year average yield is just over 7% and the current yield is around 2%, so this has come down a lot. At the Money Show, most of the analysts expected that when the Income Trust changed to corporation, the yield would come in between 4% and 6%. This yield is a lot lower than that. The reason for this low yield is that the stock price has climbed over 205% since the end of 2008. When I look at the Price/Book Value, I find the 5 year average to be 1.40, but the current one to be higher at 2.02. The Price/Book Value ratio points to a relatively high current stock price.
Globe investor gives this stock a 4 star rating. When I look at analysts recommendations, I find Strong Buys recommendation and Buy recommendations. The consensus recommendation will be a Strong Buy. (See my site for information on analyst ratings.) The consensus is a Strong Buy because most of the recommendations are Strong Buy. It is felt that this company has a great future and that the purchase of Arbel Group was a great move.
I like to talk a bit more about the Accrual Ratio that I do not like. This is because a high Accrual Ratio can signal that there are problems. The format of a negative Operational Cash Flow, with a negative Investment Cash Flow and positive Financing Cash Flow is not bad in itself. It is what happens on a young fast growing company. This company could be classified as such. What really bothers me is the positive earnings with the above cash flow configuration. You have to wonder how good their earnings are.
As you can see from the recommendations, no one else seems bothered about the Accrual Ratio. The reviews I have read, feel that this is a great little company. It could be. However, I think that it is probably a risky investment. You get mixed signals from the ratios as to whether or not this is a good stock price. Perhaps the Graham Price is the best one to go by and this says the price is good.
Alliance Grain Traders Inc through its subsidiaries, Alliance Pulse Processors Inc. ("Alliance") and Arbel Group ("Arbel"), is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, U.S., Australia and Turkey handle the full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants. The company recent bought the Arbel Group of Mersin, Turkey. Its web site is www.alliancegraintraders.com. See my spreadsheet at www.spbrunner.com/stocks/agt.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Thursday, December 3, 2009
Alliance Grain Traders Inc
I want to review all the income trust stocks touted in the Money Show. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield. This is the last Income Trust (TSX- AGT) that I got from the Money Show. This stock has already converted to a corporation. Since then the yield has declined from around 7% to around 2%.
This income trust was established in April 2005, so it has only financials since 2005. Some of the growth figures look very good. For example, the revenue has grown by 241% per year over the last 4 years; the earnings have grown by 148% per year over the same period; and the dividend has increase almost 12% per year during this period. If you look at the Book Value per shares, this has also increased nice by some 23% per year.
Now, what I do not like about this stock. Because the number of shares has increase at an average per year rate of 144%, the revenue per share has only increase by 71% per year. This is still a good increase, but not anywhere near the actual revenue increase. The Cash Flow from Operations has been negative over the last two years, and I find this troubling. Also, if you look at the Accrual Ratio, this has always been very high. High is anything over 5% and this ratio was almost 38% in 2008. It has come down slightly to 25%, but this is very high. If you include the Financial Activities Cash Flow into this ratio, it comes down to 6% but again, this is still very high.
If you look at the Liquidity Ratio and the Asset/Liability Ratio, these ratios are not bad. The Liquidity Ratio has been ok, and was 1.91 at the end of September 2009. It has a lower average of 1.18, which is acceptable, but not great. The Asset/Liability Ratio has always been good. At September 2009, it is 3.00 and the 4 year average is 1.83. For these ratios, anything at 1.50 or above is good.
This looks like an interesting stock and might have good potential as a great dividend paying growth stock, but I will not be buying it for myself at this time. I will continue to follow this to see how it turns out over the next few years. Tomorrow, I will talk about what the analyst say.
Alliance Grain Traders Inc through its subsidiaries, Alliance Pulse Processors Inc. ("Alliance") and Arbel Group ("Arbel"), is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, U.S. and Australia handle the full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants. The company recent bought the Arbel Group of Mersin, Turkey. Its web site is www.alliancegraintraders.com. See my spreadsheet at www.spbrunner.com/stocks/agt.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
This income trust was established in April 2005, so it has only financials since 2005. Some of the growth figures look very good. For example, the revenue has grown by 241% per year over the last 4 years; the earnings have grown by 148% per year over the same period; and the dividend has increase almost 12% per year during this period. If you look at the Book Value per shares, this has also increased nice by some 23% per year.
Now, what I do not like about this stock. Because the number of shares has increase at an average per year rate of 144%, the revenue per share has only increase by 71% per year. This is still a good increase, but not anywhere near the actual revenue increase. The Cash Flow from Operations has been negative over the last two years, and I find this troubling. Also, if you look at the Accrual Ratio, this has always been very high. High is anything over 5% and this ratio was almost 38% in 2008. It has come down slightly to 25%, but this is very high. If you include the Financial Activities Cash Flow into this ratio, it comes down to 6% but again, this is still very high.
If you look at the Liquidity Ratio and the Asset/Liability Ratio, these ratios are not bad. The Liquidity Ratio has been ok, and was 1.91 at the end of September 2009. It has a lower average of 1.18, which is acceptable, but not great. The Asset/Liability Ratio has always been good. At September 2009, it is 3.00 and the 4 year average is 1.83. For these ratios, anything at 1.50 or above is good.
This looks like an interesting stock and might have good potential as a great dividend paying growth stock, but I will not be buying it for myself at this time. I will continue to follow this to see how it turns out over the next few years. Tomorrow, I will talk about what the analyst say.
Alliance Grain Traders Inc through its subsidiaries, Alliance Pulse Processors Inc. ("Alliance") and Arbel Group ("Arbel"), is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, U.S. and Australia handle the full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants. The company recent bought the Arbel Group of Mersin, Turkey. Its web site is www.alliancegraintraders.com. See my spreadsheet at www.spbrunner.com/stocks/agt.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Wednesday, December 2, 2009
H&R Real Estate 2
I am continuing my review of this REIT (TSX-HR.UN) that I follow. I have not blogged before on this stock. One thing to note is that they decreased their dividend in 2009 and so this stock was taken off the dividend lists that I follow.
The thing you notice on this stock in the Insider Buying and Insider Selling reports is that different insiders are buying this stock. In the past year, the CEO, CFO, directors and officers have all been buyers of this stock. The buys occurred not only in the March lows, but also at prices that are more recent. It would appear that insiders are confident that about the future prospects of this stock. This is, of course, a big buy signal.
The next thing to look at is spreadsheet ratios. The 5 year average low for P/E on this stock is almost 17. Sites that show a P/E using last 12 months earnings have a P/E of just over 21. I get a P/E of just over 26 using expected 2009 earnings. Both these P/E ratios are on the high side. The 5 year average high P/E is almost 26. The forward P/E is not much better at just over 25. The basic problem is that this stock is not expected to earn much in the next two years. When I look at the 5 year average yield I find it is just over 7%. The current yield is just over 5%. The reason is the recent dividend cut that took effect in January 2009.
Now, let’s talk about the good ratios. First, the current Price/Book Value is just over 80% of the 10 year average. The last good thing to talk about is that the current price is some 32% lower than the Graham Price. I get a Graham Price for 2009 of $19.62 and one for 2010 of $20.01. Both are higher than the stock price.
Other positive notes are that I calculate Price/Distributable Cash ratios for 2009 or 2010 to be about 9 and just below 9. The 5 year average is just over 12. So, you would be payable a reasonable price for the expected Distributable Cash. Also, the Cash Flow Payout Ratios for 2009 and 2010 are expected to be 60% and 66%. This is better that those in recent years, which were in the 80% to 90% range.
Globe investor gives this stock a 3 star rating. When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation will be a Buy. (See my site for information on analyst ratings.) There are a number of analysts that follow this stock that feel that the stock is currently underpriced and it will be a very good investment. Certainly, insiders seem to feel this way also. I have no current plans to buy this stock as I already have a couple of REITs that I am currently happy with and at the moment I need no more REIT stock to add to my portfolio.
H&R REAL ESTATE INVESTMENT TRUST (H&R REIT) is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate principally in the Greater Toronto Area. Its web site is www.hr-reit.com. See my spreadsheet at www.spbrunner.com/stocks/hr.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The thing you notice on this stock in the Insider Buying and Insider Selling reports is that different insiders are buying this stock. In the past year, the CEO, CFO, directors and officers have all been buyers of this stock. The buys occurred not only in the March lows, but also at prices that are more recent. It would appear that insiders are confident that about the future prospects of this stock. This is, of course, a big buy signal.
The next thing to look at is spreadsheet ratios. The 5 year average low for P/E on this stock is almost 17. Sites that show a P/E using last 12 months earnings have a P/E of just over 21. I get a P/E of just over 26 using expected 2009 earnings. Both these P/E ratios are on the high side. The 5 year average high P/E is almost 26. The forward P/E is not much better at just over 25. The basic problem is that this stock is not expected to earn much in the next two years. When I look at the 5 year average yield I find it is just over 7%. The current yield is just over 5%. The reason is the recent dividend cut that took effect in January 2009.
Now, let’s talk about the good ratios. First, the current Price/Book Value is just over 80% of the 10 year average. The last good thing to talk about is that the current price is some 32% lower than the Graham Price. I get a Graham Price for 2009 of $19.62 and one for 2010 of $20.01. Both are higher than the stock price.
Other positive notes are that I calculate Price/Distributable Cash ratios for 2009 or 2010 to be about 9 and just below 9. The 5 year average is just over 12. So, you would be payable a reasonable price for the expected Distributable Cash. Also, the Cash Flow Payout Ratios for 2009 and 2010 are expected to be 60% and 66%. This is better that those in recent years, which were in the 80% to 90% range.
Globe investor gives this stock a 3 star rating. When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation will be a Buy. (See my site for information on analyst ratings.) There are a number of analysts that follow this stock that feel that the stock is currently underpriced and it will be a very good investment. Certainly, insiders seem to feel this way also. I have no current plans to buy this stock as I already have a couple of REITs that I am currently happy with and at the moment I need no more REIT stock to add to my portfolio.
H&R REAL ESTATE INVESTMENT TRUST (H&R REIT) is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate principally in the Greater Toronto Area. Its web site is www.hr-reit.com. See my spreadsheet at www.spbrunner.com/stocks/hr.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
Tuesday, December 1, 2009
H&R Real Estate
I follow a number of REITs and this stock (TSX-HR.UN) is one that I follow. I have not yet blogged on this stock. One thing to note is that they decreased their dividend in 2009 and so this stock was taken off the dividend lists that I follow.
The growth statistics on this stock have not been good recently. I you had held this stock for the last 10 years, you would have made money because of the distributions. Until recently, the distributions were very good, being in the 7% to 8% range. The increase in earnings and distributable cash has not been good, especially over the last 5 years. The increase in cash flow is mediocre and the increase in book value is almost non-existing.
The problem with this REIT’s book value, as with lots of income trusts, is that a portion of the distributions is return of capital. The percentage of the distributions over the last 6 years going to return of capital has been from 40% to 65%. While, at least I can say that the book value has not been decreasing. The Return on Equity (ROE) has not been great either. On a REIT, you would want a ROE of at least 8% and the ROE has not been this high since 2004.
When a business gets into trouble, you want them to do the sensible thing. If you invest, the times you really lose are when the business goes belly-up. This company has cut is dividend because it did not have the cash flow to pay it. They had problems with financing the The Bow development in Calgary. The company has also recently issued bonds to raise money for this construction. The company is acting sensibly.
Another negative thing to mention is that the Asset/Liability Ratio is a little low at only 1.46 currently. I like to see this at 1.50. Also, the Accrual Ratio is not particularly low at 2.3%. It would be nice if this ratio were negative. On a more positive note, there are some recent favorable Analysts reports on this stock lately. I will talk about this tomorrow.
H&R REAL ESTATE INVESTMENT TRUST (H&R REIT) is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate principally in the Greater Toronto Area. Its web site is www.hr-reit.com. See my spreadsheet at www.spbrunner.com/stocks/hr.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
The growth statistics on this stock have not been good recently. I you had held this stock for the last 10 years, you would have made money because of the distributions. Until recently, the distributions were very good, being in the 7% to 8% range. The increase in earnings and distributable cash has not been good, especially over the last 5 years. The increase in cash flow is mediocre and the increase in book value is almost non-existing.
The problem with this REIT’s book value, as with lots of income trusts, is that a portion of the distributions is return of capital. The percentage of the distributions over the last 6 years going to return of capital has been from 40% to 65%. While, at least I can say that the book value has not been decreasing. The Return on Equity (ROE) has not been great either. On a REIT, you would want a ROE of at least 8% and the ROE has not been this high since 2004.
When a business gets into trouble, you want them to do the sensible thing. If you invest, the times you really lose are when the business goes belly-up. This company has cut is dividend because it did not have the cash flow to pay it. They had problems with financing the The Bow development in Calgary. The company has also recently issued bonds to raise money for this construction. The company is acting sensibly.
Another negative thing to mention is that the Asset/Liability Ratio is a little low at only 1.46 currently. I like to see this at 1.50. Also, the Accrual Ratio is not particularly low at 2.3%. It would be nice if this ratio were negative. On a more positive note, there are some recent favorable Analysts reports on this stock lately. I will talk about this tomorrow.
H&R REAL ESTATE INVESTMENT TRUST (H&R REIT) is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate principally in the Greater Toronto Area. Its web site is www.hr-reit.com. See my spreadsheet at www.spbrunner.com/stocks/hr.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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.
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