Wednesday, January 13, 2010

Shaw Communications Inc 2

I am continuing my review on Shaw Communications (TSX-SJR.B) today, as I follow this stock. The August 2009 report is also in. This stock is on the dividend lists that I follow of Dividend Achievers at and Dividend Aristocrats list at (see indices).

I first looked at the Insider Buying and Insider Selling report. It is getting rather discouraging to do this. This stock has also has had lots of Insider Selling going on. Over the past year some $24.7M of Insider Selling has occurred. I guess there is a positive side also, since there has been some $5.1M of Insider Buying also. Most of the buying and selling has been by officers of this company.

When I look at the P/E ratio, I find that it is almost at 15. The 5 year average low P/E for this stock is 17 and the 5 year average high is 24. The sites that use the last 12 months of earnings give this stock a P/E ratio of 16.6. This stock P/E ratio is neither low nor high. There is no sense in looking at the Price/Book Value ratio, as the Book Value has not changed much over the years. What this has done is increased steadily the P/BV ratio and this ratio is currently at 3.7. This ratio is not extraordinarily high, but unless the Book Value increases, this ratio will not go very low.

The next thing to look at is the Dividend Yield. By this measure, the stock is cheap as the yield is 4% against a 5 year average of 2.5%. The thing with this stock is that the dividends are being increased steadily. However, the increase in dividend this year was only 15% against a 5 year 60% per year average increase. The dividend increases have been very good on this stock.

The last measure to look at is the Graham Price. The Graham price uses the earnings and book value in its calculation. So, it is not surprising to find that the Stock Price at $20.79 is some 55% above the Graham Price of $13.48. I should also point out that this stock is usually much higher than the Graham price.

When I look at analysts recommendations, all I find are Buy and Hold recommendations. A big majority of recommendations are Hold and there a fair number of analysts following this stock. (See my site for information on analyst ratings.) Most of the analysts seem to feel that the stock price is too high to justify an investment in this stock at this time.

This company is in the communications and cable business. You have to wonder about there being problems in this business going forward. We in Canada pay some of the highest prices in the world for communications and I wonder of about the future profitability of this business. In any event, I already have investments in BCE and Manitoba Telecom, so I am really not interested in having more investments in this area.

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, Internet, digital phone and satellite direct-to-home services. Its web site is See my spreadsheet at

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 for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at

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