I am continuing my review this stock (TSX-MTK) today as the August 2009 year end annual report has been published. I bought this stock last year when I started my TFSA to soak up the remaining money in my account after buy Shoppers. Since I bought this stock last year, I have had a return of 31.5% on my investment. I placed my $5000 in my TFSA yesterday and today I bought both Shoppers and Matrikon for this year’s purchases. I will start reviewing Shoppers tomorrow.
One of the things I like to see is insiders having more stocks than stock options. Unlike other stocks, insiders are buying this stock. From what I can see, insiders own somewhere around 50% of the shares of this company. As the saying goes, they have skin in this game. There is substantially more insider buying than selling, but some officers have been selling their options as they have been granted recently.
The next thing to look at is the ratios to determine if the stock is a good buy or not. The P/E, using the estimates earnings is just under 13. For this stock, the 5 year average low is 15 and the 5 year average high is just under 39. The P/E of 13 is not bad. If you look at sites using the last 12 months of earnings, you will see a much higher P/E that is closer to 38 and this is very high.
If you look at the Price/Book Value ratio, the current one is under 70% of the 10 year average. Also, this ratio is just over 2, so it is not high. The current dividend yield at 4% is higher than the average of the last couple of years of around 2.5%. Dividends were just started in 2008. The last thing to look at is the Graham Price. The current Graham Price is $2.70. So, the current stock price of $2.98 is some 10% above this. On average, over the last 10 years, the stock price has been some 80% above the Graham Price. After all is said and done, this stock is at a reasonable price.
When I look at the analysts recommendations, I find mainly Strong Buys and Buys recommendations. However, I did see one Hold recommendation. The consensus recommendation is probably a Buy, although it is close to a Strong Buy. (See my site for information on analyst ratings.) Some analysts expect the earnings for this company to drop in 2011. This is because they have some large contracts with money due in 2010. However, not everyone expects the earnings to drop in 2011.
As I said earlier, I have bought some more of this stock for my TFSA today. I am pleased with this company, but then I have only just over $1,000 invested in this company. I was using it to soak up all the investment money in my TFSA after purchasing Shoppers. However, I may make a different decision about this stock later. On of the types of stocks I like are technology stocks and this seems to be a good one. I am keeping my eye on it.
Matrikon Inc. is engaged in the sale of software and information technology professional services to industrial facilities. This company has customers in the oil, gas, mining, petrochemical, forestry and power-generation industries. Its web site is www.matrikon.com. See my spreadsheet at www.spbrunner.com/stocks/mtk.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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