I am reviewing this stock (TSX-FSV) today as the annual reported for December 2009 has been published and I own some of this stock. I first bought this stock in June of 2002, when I was diversifying my portfolio into Real Estate stock. It is not a dividend paying stock, but I kept it because in August 2007, it issued to shareholders Preferred Shares with a 7% yield. I have just broken even on this stock including these dividends received.
When looking at the Insider Buying and Insider Selling report, I find that over the past year some $2.3M of the subordinate shares have been sold by insiders, especially by the CFO and officers. It is hard to tell if this means anything because you never know why people sell and it could just be that they need the money. However, this also does not tell us anything positive about the stock by insiders either.
When I look at the P/E ratio, I find that the 5 year average low is 13.4 and the 5 year average high is 22.4. I get a current P/E of 12.5 and so this is a good low P/E for this stock and a relatively low P/E to boot. Of course, this P/E is based on expected earnings for this year. The next thing is the Price/Book Value ratio. This ratio, at 1.97 is about 82% of the 10 year average of 2.39. So this also shows a relatively good current stock price.
The last thing to look at is the Graham Price. I get a Graham Price of $19.83 for 2009 and $22.06 for 2010. The current price of $23.13 is only about 5% above the Graham Price. Since this is generally a growth stock, this is not bad. In most years, even the low stock price is way above the Graham price. I cannot do a yield comparison, as this is not a dividend paying stock. It may seem that the dividends paid on the preferred stock fluctuates, but it is only because it is paid in US$ and the US$ fluctuates against the Canadian Dollar. Also, my dividends have only been increasing because the CDN$ is strengthening again the US$ and therefore I get higher dividends in CDN$.
When I look at look at analysts’ recommendations, what I find is Strong Buys, Buys and Hold. There are lots of Holds and lots of Strong Buys. The consensus recommendation, of course, would be a Buy. (See my site for information on analyst ratings.) Analysts call this a well-run diversified Real Estate company. The feeling was that this company has met expectations in 2009 and it will do better in 2010. The reason for the Hold ratings seem to be that the price of this stock is not expected to go much above $23.00 within the next 12 months. The stock is basically there.
Over the long term, this company has consistently done better than the TSX Real Estate Index. However, as I said yesterday, this is not a dividend paying company, so I will pick a good time to exit it, probably this spring or early summer.
This company is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate, residential property management, and property services. This is an international company, having business in North and South America, Europe, Asia, Australia and New Zealand. Controlling shareholder is Jay Hennick. He has 9% holding, but has 52.5% voting control. Its web site is www.firstservice.com/. See my spreadsheet at www.spbrunner.com/stocks/fsv.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 for stocks followed and investment notes. Follow me on twitter.
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