This is not my usual stock (TSX-RIM, NASDAQ-RIMM), but I do like tech stocks and I do like investing in something more interesting than banks and utilities. I first bought this stock in December 1999. I sold some in 2006 and some more in 2007. To date, I have made a return of 21% per year on this stock. I will eventually sell this stock, as non-dividend paying stock is not the sort I keep for the long term.
Whenever you look at Insider Buying and Insider Selling on this stock, you always find a ton of insider selling. During the last year, there has been some $407M of insider selling. However, this only amount to 1% of the market value of the stock. Insiders seem to be getting lots of stock options and they are selling them off as soon as possible. The CFO and other officers of this company seem to have more stock options than shares. CEOs have lots more shares than options. The directors also have more shares than options.
When I look at the 5 year average Low P/E ratio it is 18.2 and the 5 year average High P/E ratio is 40.4. So a current stock price of $63.60 gives a P/E ratio of 10.7 and this shows a relatively good price. Also, P/E ratios around 10 are good in absolute terms. When I look at the Graham Price, I get one of $42.81 for 2010. This is some 49% below the current stock price. Since the stock price is usually much higher than the Graham Price, the current stock price is relatively good. However, a good absolute stock price is one that is at or below the Graham Price.
When I look at the Price/Book Value Ratio, I find that the current one of 4.21 is some 80% of the 10 year average P/B Ratio of 5.23. This also shows a relatively good current stock price. Since this stock has no dividends, we can not look at that measure. However, the good thing about this stock is that both the Revenues and Cash Flows are growing. The thing I do not like is the high Accrual Ratio. When it is over 5%, you have to wonder about the quality of the earnings. The current Accrual Ratio on this stock is 8.7%.
When I look at analysts’ recommendations, they cover Strong Buy, Buy, Hold, Underperform and Sell. The vast majority of the recommendations are Strong Buy and Hold. The consensus recommendation would be a Strong Buy. (See my site for information on analyst ratings.) It is obvious there is a huge diversity of opinions on this stock. Most of the analysts seem to like this stock. However, the ones that do not, worry about the competition they will get from Apple.
I am happy with this stock and for the moment will retain what I have left. However, since this is not a dividend paying stock, I will sell at sometime in the future.
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, internet and intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe and Asia Pacific. Its web site is here RIM. See my spreadsheet at rim.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.
Monday, May 31, 2010
Friday, May 28, 2010
Research In Motion
This is not my usual stock (TSX-RIM, NASDAQ-RIMM), but I do like tech stocks and I do like investing in something more interesting than banks and utilities. I first bought this stock in December 1999. I sold some in 2006 and some more in 2007. To date, I have made a return of 21% per year on this stock. I will eventually sell this stock, as non-dividend paying stock is not the sort I keep for the long term.
No matter what growth figures you look at, whether in US$ or CDN$, all are great. I will review the most important ones of revenues and cash flow. For Revenues, in US$ or CDN$, the growth per year for the last 5 and 10 years is around 60% per year. The cash flow for the last 5 and 10 years has been 57% per year and 73% per year, respectively in CDN$. For Revenue and Cash Flow, the US$ figures are better than the CDN$ figures. This is because the CDN$ has been appreciating against the US$ lately. This company sells their products world wide and reports in US$.
If you held this stock for the last 5 and 10 years, the return would be about 22% and 16% per year respectively, in CDN$. Why I have made a better return is because I sold some stock when the price went high and so locked in some profits.
Another good thing about this stock is the strong balance sheet. The Liquidity Ratio and the Asset/Liability Ratio are quite high at 2.39 and 3.92 respectively. Any value for these ratios of 1.50 and above is very good. The Return on Equity is also quite high, coming in at a 5 year average of 30% and for 2010 at 32%. The last thing to talk about today is the Accrual Ratio. This ratio is at present at 8.8%. This is very high, but not as high as it has been. The problem with a high Accrual Ratio is that it can call into question the quality of the earnings for a company. These values are the same whatever currency you are using.
I am happy with this stock and for the moment will retain what I have left. However, since this is not a dividend paying stock, I will sell at sometime in the future.
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software
and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, internet and
intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity. Founded in 1984 and
based in Waterloo, Ontario, RIM operates offices in North America, Europe and Asia Pacific. Its web site is here RIM. See my spreadsheet at rim.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.
No matter what growth figures you look at, whether in US$ or CDN$, all are great. I will review the most important ones of revenues and cash flow. For Revenues, in US$ or CDN$, the growth per year for the last 5 and 10 years is around 60% per year. The cash flow for the last 5 and 10 years has been 57% per year and 73% per year, respectively in CDN$. For Revenue and Cash Flow, the US$ figures are better than the CDN$ figures. This is because the CDN$ has been appreciating against the US$ lately. This company sells their products world wide and reports in US$.
If you held this stock for the last 5 and 10 years, the return would be about 22% and 16% per year respectively, in CDN$. Why I have made a better return is because I sold some stock when the price went high and so locked in some profits.
Another good thing about this stock is the strong balance sheet. The Liquidity Ratio and the Asset/Liability Ratio are quite high at 2.39 and 3.92 respectively. Any value for these ratios of 1.50 and above is very good. The Return on Equity is also quite high, coming in at a 5 year average of 30% and for 2010 at 32%. The last thing to talk about today is the Accrual Ratio. This ratio is at present at 8.8%. This is very high, but not as high as it has been. The problem with a high Accrual Ratio is that it can call into question the quality of the earnings for a company. These values are the same whatever currency you are using.
I am happy with this stock and for the moment will retain what I have left. However, since this is not a dividend paying stock, I will sell at sometime in the future.
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software
and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, internet and
intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity. Founded in 1984 and
based in Waterloo, Ontario, RIM operates offices in North America, Europe and Asia Pacific. Its web site is here RIM. See my spreadsheet at rim.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.
Thursday, May 27, 2010
Power Corp 2
I am continuing today my review of this stock (TSX-POW) because it is a good dividend paying stock. It is on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). I do not own this company as I have Power Financial. It makes no sense to hold both.
The first thing to note is the heavy Insider Selling to the tune of $30M. However, to put this in perspective, it is less than ¼ of 1% of the value of this company. As far as I can see, it all seems to involve options. Except for the Desmarais clan, insiders all seem to have more options than stocks. This is not great, but it does not ring any alarm bells either.
When I look at the 5 year average low P/E, I get a ratio of 10.9 and when I look at the 5 year average high P/E, I get a ratio of 16.9. So the current P/E of 11.2 on a price of $27.07 shows a good current stock price. Looking at the Graham Price, I get one for 2010 of $33.46 based on earnings estimates for 2010. The current stock price of $27.07 is some 19% lower. When the stock price is lower than the Graham Price is, this shows that the stock price is good.
The next thing to look at is the Price/Book Value Ratio. I get a current P/B ratio of 1.32 and the 10 year average is 1.73. So the current stock price looks good on this measure as the current P/B ratio is around 76% of the 10 year average. The Dividend Yield at 4.3% is a good yield for this stock. Not only is it higher than the 5 year average of 3.2%, it is higher than the 10 year average low of 3.4%. The yield on this stock is generally below 3%.
When I look at analysts’ recommendations, I find recommendations of Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) This company holds international investments and some analysts like the European assets that this company holds. This company’s earnings for 2009 and also for the first quarter come in below estimates, and this seems to have upset some analysts. Although, I must admit this is a typical reaction. Most analysts seem to agree that this is a well run company. If you are interesting in a company, I say, get it while it is cheap. I do not think it matters what the reason for the cheapness is.
As I said yesterday, I will not be buying this company because I hold Power Financial Corp. I will continue to follow it. Some people prefer to invest in this company rather than Power Financial Corp as it has more than just financial assets.
This company is an international management and holding company. It has as subsidiaries Power Financial Corp., Power Technology Investment Corp. and Gesca Ltee. The Pargesa Group holds significant positions in five large companies based in Europe of Total (energy), Suez (energy, water, and waste services), Imerys (specialty minerals), Lafarge (cement and building materials and Pernod Ricard (Wines and Spirits). Gesca holds a 100% interest in the Montréal daily newspaper La Presse and six other daily newspapers in the provinces of Québec and Ontario. Gesca also produces television programming, publishes specialty magazines and books, and operates several Internet sites. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Corp. See my spreadsheet at pow.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.
The first thing to note is the heavy Insider Selling to the tune of $30M. However, to put this in perspective, it is less than ¼ of 1% of the value of this company. As far as I can see, it all seems to involve options. Except for the Desmarais clan, insiders all seem to have more options than stocks. This is not great, but it does not ring any alarm bells either.
When I look at the 5 year average low P/E, I get a ratio of 10.9 and when I look at the 5 year average high P/E, I get a ratio of 16.9. So the current P/E of 11.2 on a price of $27.07 shows a good current stock price. Looking at the Graham Price, I get one for 2010 of $33.46 based on earnings estimates for 2010. The current stock price of $27.07 is some 19% lower. When the stock price is lower than the Graham Price is, this shows that the stock price is good.
The next thing to look at is the Price/Book Value Ratio. I get a current P/B ratio of 1.32 and the 10 year average is 1.73. So the current stock price looks good on this measure as the current P/B ratio is around 76% of the 10 year average. The Dividend Yield at 4.3% is a good yield for this stock. Not only is it higher than the 5 year average of 3.2%, it is higher than the 10 year average low of 3.4%. The yield on this stock is generally below 3%.
When I look at analysts’ recommendations, I find recommendations of Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) This company holds international investments and some analysts like the European assets that this company holds. This company’s earnings for 2009 and also for the first quarter come in below estimates, and this seems to have upset some analysts. Although, I must admit this is a typical reaction. Most analysts seem to agree that this is a well run company. If you are interesting in a company, I say, get it while it is cheap. I do not think it matters what the reason for the cheapness is.
As I said yesterday, I will not be buying this company because I hold Power Financial Corp. I will continue to follow it. Some people prefer to invest in this company rather than Power Financial Corp as it has more than just financial assets.
This company is an international management and holding company. It has as subsidiaries Power Financial Corp., Power Technology Investment Corp. and Gesca Ltee. The Pargesa Group holds significant positions in five large companies based in Europe of Total (energy), Suez (energy, water, and waste services), Imerys (specialty minerals), Lafarge (cement and building materials and Pernod Ricard (Wines and Spirits). Gesca holds a 100% interest in the Montréal daily newspaper La Presse and six other daily newspapers in the provinces of Québec and Ontario. Gesca also produces television programming, publishes specialty magazines and books, and operates several Internet sites. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Corp. See my spreadsheet at pow.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.
Wednesday, May 26, 2010
Power Corp
This is also a great stock (TSX-POW) to review, as it is a good dividend paying stock. It is also on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
I do not own this company as I have Power Financial. It makes no sense to hold both. Some people like this company better than Power Financial, because as a holding company it is not just financial. The financial section is balanced by other holdings and, it is felt, this makes Power Corp a safer and less volatile company to hold. Both of these companies have a reputation of providing great dividend returns. I personally like financial companies as I feel they give a better long term return.
This company is no slouch when it comes to dividend growth. The 5 and 10 year growth in dividends is 16% per year and 16.8% per year respectively. I also should mention that, like a lot of companies, this company did not raise their dividends in 2009. However, because the last increase was late in 2009, an investor would have received 4.4% increase in dividend returns in 2009. If you had purchased this stock at an average price 10 years ago, you would be making a return of 8.2% on your investment. An investment at an average price would have earned you a total return of 8.2% per year. If you purchased this stock at the year end, that 10 year total return would be 12.3% per year. This is why people so like dividend paying stock.
Even if you had purchased this stock just 5 years ago at an average price, you would be making a return on your original money of 3.7%, but little total return per year. This is not quite so happy a picture. Still you will have money coming in on this stock while you wait for better times. The thing is, if you start saving for retirement in a reasonable time frame with these dividend paying stocks, you could do quite well and could weather the ups and downs of the stock market.
The growth figures for this stock are the generally not so great area at the present time. On this stock, the 10 year growth figures are better and in some cases, much better than the 5 year growth figures. For example, the earnings growth for the last 5 years being in negative territory, with the 10 year growth in earnings is barely better at 1.7% per year. In the cash of cash flow, the 5 and 10 year growth are very different. The 5 year average growth is just 4.9% per year, but the 10 year average growth is a great 28% per year.
The 5 year average Return on Equity at 11.6% is not bad. The last two years of ROE were low at 7% each year. In regards to the Accrual Ratio, it has been always low and unremarkable. The Asset/Liability Ratio is a bit low at 1.20, but this is rather typical of this type of company. I guess the last thing to say, is that I will not buy this stock for the simple reason I have Power Financial Corp, and it makes no sense to have both Power Financial Corp and Power Corp.
This company is an international management and holding company. It has as subsidiaries Power Financial Corp., Power Technology Investment Corp. and Gesca Ltee. The Pargesa Group holds significant positions in five large companies based in Europe of Total (energy), Suez (energy, water, and waste services), Imerys (specialty minerals), Lafarge (cement and building materials and Pernod Ricard (Wines and Spirits). Gesca holds a 100% interest in the Montréal daily newspaper La Presse and six other daily newspapers in the provinces of Québec and Ontario. Gesca also produces television programming, publishes specialty magazines and books, and operates several Internet sites. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Corp. See my spreadsheet at pow.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.
I do not own this company as I have Power Financial. It makes no sense to hold both. Some people like this company better than Power Financial, because as a holding company it is not just financial. The financial section is balanced by other holdings and, it is felt, this makes Power Corp a safer and less volatile company to hold. Both of these companies have a reputation of providing great dividend returns. I personally like financial companies as I feel they give a better long term return.
This company is no slouch when it comes to dividend growth. The 5 and 10 year growth in dividends is 16% per year and 16.8% per year respectively. I also should mention that, like a lot of companies, this company did not raise their dividends in 2009. However, because the last increase was late in 2009, an investor would have received 4.4% increase in dividend returns in 2009. If you had purchased this stock at an average price 10 years ago, you would be making a return of 8.2% on your investment. An investment at an average price would have earned you a total return of 8.2% per year. If you purchased this stock at the year end, that 10 year total return would be 12.3% per year. This is why people so like dividend paying stock.
Even if you had purchased this stock just 5 years ago at an average price, you would be making a return on your original money of 3.7%, but little total return per year. This is not quite so happy a picture. Still you will have money coming in on this stock while you wait for better times. The thing is, if you start saving for retirement in a reasonable time frame with these dividend paying stocks, you could do quite well and could weather the ups and downs of the stock market.
The growth figures for this stock are the generally not so great area at the present time. On this stock, the 10 year growth figures are better and in some cases, much better than the 5 year growth figures. For example, the earnings growth for the last 5 years being in negative territory, with the 10 year growth in earnings is barely better at 1.7% per year. In the cash of cash flow, the 5 and 10 year growth are very different. The 5 year average growth is just 4.9% per year, but the 10 year average growth is a great 28% per year.
The 5 year average Return on Equity at 11.6% is not bad. The last two years of ROE were low at 7% each year. In regards to the Accrual Ratio, it has been always low and unremarkable. The Asset/Liability Ratio is a bit low at 1.20, but this is rather typical of this type of company. I guess the last thing to say, is that I will not buy this stock for the simple reason I have Power Financial Corp, and it makes no sense to have both Power Financial Corp and Power Corp.
This company is an international management and holding company. It has as subsidiaries Power Financial Corp., Power Technology Investment Corp. and Gesca Ltee. The Pargesa Group holds significant positions in five large companies based in Europe of Total (energy), Suez (energy, water, and waste services), Imerys (specialty minerals), Lafarge (cement and building materials and Pernod Ricard (Wines and Spirits). Gesca holds a 100% interest in the Montréal daily newspaper La Presse and six other daily newspapers in the provinces of Québec and Ontario. Gesca also produces television programming, publishes specialty magazines and books, and operates several Internet sites. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Corp. See my spreadsheet at pow.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.
Tuesday, May 25, 2010
Power Financial Corp 2
This is a stock (TSX-PWF) on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). I bought this stock first in 2001 and some more in 2004. I have earned a total return of 8.4% per year on this stock.
When I look at Insider Buying and Insider Selling reports, I see that there has been selling to the tune of $10M this year. On the surface, this seems bad, but looking further, I find that the selling is by Robert Gratton, a director, who is retiring. This makes the selling understandable. There seems to be no other action in this category.
The next thing to review is the P/E ratios. The 5 year average low is 11.2 and the 5 year average high 16.6. This puts the current P/E, at 11, just below the 5 year average low. This is therefore showing a good current stock price. The next thing is the Graham Price. I get a Graham Price of $32.12 for 2010. With a current stock price of $28.03, the current stock price is some 12.7% below the Graham Price. The average low stock price is 12.2% below the stock price. This again shows a good current stock price. Please note that this items use an earning estimate for 2010, which may or may not, be correct.
When I look at the Price/Book Value, I get a 10 year average of 2.14 and a current P/B of just 1.55. This puts the current ratio at some 72% of the 10 year average. Any ratio less than 80% of the current average shows a good current stock price. The last think to look at is the dividend yield. The current yield is 5%. The 5 year average yield is 3.8% and the 10 year average yield on the low stock price is 4.2%. This again says that the current stock price is a good one.
When I look at what the analysts say about this stock, no one says anything bad about it. There is a worry that if the stock market plunges, this company could be hit hard. But the company is solid and it is a low risk stock. When I look at the analysts recommendations, there are lots of Buy recommendations and lots of Hold recommendations. The consensus recommendation is probably a Buy. (See my site for information on analyst ratings.)
I will hold on to what I have. I will not be buying any because I have sufficient stock in this company. I also have shares in IGM Financial, which is owned by Power Financial Corp. I do not like any one company to be too large a part of my portfolio. That said I feel comfortable holding this stock.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Financial. See my spreadsheet at pwf.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.
When I look at Insider Buying and Insider Selling reports, I see that there has been selling to the tune of $10M this year. On the surface, this seems bad, but looking further, I find that the selling is by Robert Gratton, a director, who is retiring. This makes the selling understandable. There seems to be no other action in this category.
The next thing to review is the P/E ratios. The 5 year average low is 11.2 and the 5 year average high 16.6. This puts the current P/E, at 11, just below the 5 year average low. This is therefore showing a good current stock price. The next thing is the Graham Price. I get a Graham Price of $32.12 for 2010. With a current stock price of $28.03, the current stock price is some 12.7% below the Graham Price. The average low stock price is 12.2% below the stock price. This again shows a good current stock price. Please note that this items use an earning estimate for 2010, which may or may not, be correct.
When I look at the Price/Book Value, I get a 10 year average of 2.14 and a current P/B of just 1.55. This puts the current ratio at some 72% of the 10 year average. Any ratio less than 80% of the current average shows a good current stock price. The last think to look at is the dividend yield. The current yield is 5%. The 5 year average yield is 3.8% and the 10 year average yield on the low stock price is 4.2%. This again says that the current stock price is a good one.
When I look at what the analysts say about this stock, no one says anything bad about it. There is a worry that if the stock market plunges, this company could be hit hard. But the company is solid and it is a low risk stock. When I look at the analysts recommendations, there are lots of Buy recommendations and lots of Hold recommendations. The consensus recommendation is probably a Buy. (See my site for information on analyst ratings.)
I will hold on to what I have. I will not be buying any because I have sufficient stock in this company. I also have shares in IGM Financial, which is owned by Power Financial Corp. I do not like any one company to be too large a part of my portfolio. That said I feel comfortable holding this stock.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Financial. See my spreadsheet at pwf.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.
Friday, May 21, 2010
Power Financial Corp
This is a great stock (TSX-PWF) to review, as it is a good dividend paying stock. It is also on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices).
I bought this stock first in 2001 and some more in 2004. I have earned a total return of 8.4% per year on this stock. This is not bad since stock prices are still depressed. The current stock price is about 25% below the peaks of 2007. My total returns would include some 3% per year in dividend income. This company is basically into life insurance and all life insurance companies were hit hard in this last recession. The company did not raise their dividends for 2009. The dividends where higher in 2009 than they were in 2008 as there was a dividend increase at the end of 2008.
The growth in dividend for this stock has been great. The 5 and 10 year growth rates are 14% and 16.6% per year, respectively. The growth in dividends between 2008 and 2009 at just 5% was the lowest I have seen and my spreadsheet tracks this stock back to 1993. The company, so far this year, has not stated if there will be an increase this year. All that analysts mention is that the current dividends are safe.
Most of the 5 and 10 year growth figures are good. All the exceptions to this has 5 year growth rate much lower than the 10 year growth rate. The 5 and 10 year growth in earnings were -2% and 5% per year, respectively. The last two years have not been great for this company. This year, 2010, is expected to be much better. My estimated earnings for 2010 have been declining. After the 2009 annual report was in, earnings for 2010 declined from $2.85 to $2.59. After the latest quarterly report, they again declined from $2.59 to $2.53.
The growth in revenue and cash flow from operations was better for the last 10 years, than for the last 5 years. This is mainly due to the fact that this company has been hard hit by the latest recession. The 5 and 10 year growth in revenue is 6.5% and 8.5% per year respectively. The cash flow growth for the last 5 and 10 years is 5.8% and 14.9% per year respectively. Growth in revenue and cash flow are both important for long term growth in a company and in its dividends.
When I look at the Asset/Liability Ratio, I get one of 1.19. This is not great, but is typical of this sort of financial firm. They have enough assets to cover the liabilities. The Leverage (or Asset/Book Value) is also a bit high at 10.6, but not unreasonably high. The Return on Equity is still good and the ROE for the first quarter of 2009 at 12% is better than for 2009, which was 10%. The last thing to mention is the Accrual Ratio and this is good as the Total Accruals is negative, which is what you want to see.
I am please with my investment in this stock. I will not be buying more for the simple reason I already have enough of this stock in my portfolio. I will continue to hold this stock and continue to track it.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Financial. See my spreadsheet at pwf.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.
I bought this stock first in 2001 and some more in 2004. I have earned a total return of 8.4% per year on this stock. This is not bad since stock prices are still depressed. The current stock price is about 25% below the peaks of 2007. My total returns would include some 3% per year in dividend income. This company is basically into life insurance and all life insurance companies were hit hard in this last recession. The company did not raise their dividends for 2009. The dividends where higher in 2009 than they were in 2008 as there was a dividend increase at the end of 2008.
The growth in dividend for this stock has been great. The 5 and 10 year growth rates are 14% and 16.6% per year, respectively. The growth in dividends between 2008 and 2009 at just 5% was the lowest I have seen and my spreadsheet tracks this stock back to 1993. The company, so far this year, has not stated if there will be an increase this year. All that analysts mention is that the current dividends are safe.
Most of the 5 and 10 year growth figures are good. All the exceptions to this has 5 year growth rate much lower than the 10 year growth rate. The 5 and 10 year growth in earnings were -2% and 5% per year, respectively. The last two years have not been great for this company. This year, 2010, is expected to be much better. My estimated earnings for 2010 have been declining. After the 2009 annual report was in, earnings for 2010 declined from $2.85 to $2.59. After the latest quarterly report, they again declined from $2.59 to $2.53.
The growth in revenue and cash flow from operations was better for the last 10 years, than for the last 5 years. This is mainly due to the fact that this company has been hard hit by the latest recession. The 5 and 10 year growth in revenue is 6.5% and 8.5% per year respectively. The cash flow growth for the last 5 and 10 years is 5.8% and 14.9% per year respectively. Growth in revenue and cash flow are both important for long term growth in a company and in its dividends.
When I look at the Asset/Liability Ratio, I get one of 1.19. This is not great, but is typical of this sort of financial firm. They have enough assets to cover the liabilities. The Leverage (or Asset/Book Value) is also a bit high at 10.6, but not unreasonably high. The Return on Equity is still good and the ROE for the first quarter of 2009 at 12% is better than for 2009, which was 10%. The last thing to mention is the Accrual Ratio and this is good as the Total Accruals is negative, which is what you want to see.
I am please with my investment in this stock. I will not be buying more for the simple reason I already have enough of this stock in my portfolio. I will continue to hold this stock and continue to track it.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Financial. See my spreadsheet at pwf.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.
Thursday, May 20, 2010
Penn West Energy Trust 2
I am continuing my review of the stocks that I own for which I have received an annual report in 2009. As I mentioned yesterday, in 1998, I bought a stock called Maximum Energy Trust. Through mergers and acquisitions, it became Ultimate Energy Income Trust, then Petrofund Energy, then NCE Petrofund, then Penn West Energy Trust (TSX-PWT.UN). I think I have all the changes. According to Quicken, I have made a total return of 8% per year on my purchase.
The first thing I like to look at is the Insider Buying and Insider Selling reports. What I see for this company is Insider Selling to the tune of $2.8M. There is a very tiny bit of buying. All this selling occurred this year. The company has a Unit Trust Rights incentive plan, and when these rights invest, they seem mostly to be sold off. Although there are some exceptions, most of the insiders have far more Unit Trust Rights than Trust Units (or shares) in this company. I know that granting of options, rights etc was to align the management’s interest with the shareholders. I do not think this happens.
First of all, in valuing this company, looking at the P/E Ratio does not make much sense because it is all over the place. For example, because it is not expected to make much in earnings this year, I get a P/E of 285. The forward P/E ratio at 42 is better, but does not say much except earnings are not expected to be high in 2011 either. The Graham Price is not much better. This is based on earnings and book value and for 2007 it was $17.59, for 2008 was $39.63, for 2009 was $5.44. For 2010, I get $5.40 and for 2011, I get $14.00.
Since the Book Value not only goes up, it also goes down, the Price/Book Value Ratio also has problems, but this ratio is a bit more stable. The 10 year average is 1.54 and the 2010 P/B ratio is 1.08. The current ratio at 70% of the 10 year average shows a relatively good stock price. We also have problems with the dividend yield. The dividends tend to fluctuate with the price of oil. The current rate is 8.4% and the 5 year average is 11.9%.
When I check what analysts say about this company, a lot talk about cash flow, so let’s looks at the Price/Cash Flow Ratios. I track Cash Flow from Operations, and I get a 2009 P/CF of 5.6 and an estimated current P/CF 6.0. The 5 and 10 year averages for the P/CF is 5.9 and 5.6 respectively. So it looks like the current one is around the averages.
When I look at analysts’ recommendations, I find there are Strong Buy, Buy, Hold and Underperform recommendations. (See my site for information on analyst ratings.) The consensus recommendation is a Hold. Not much that is negative is said about this stock. Analysts like their resource assets.
The analysts with Hold recommendations mention that they feel that distributions will be cut when the company changes to a corporation. It is felt that buying after the company converts to a corporation might be better timing. This company has said they will pay the current distributions until August. They do not seem to say what the distribution will be after that. Analysts with Buy and Strong Buy recommendations really like the recent cash infusion from China Investment Corp. This will allow the company to pay off some of their debts and develop their assets.
As I said yesterday, I do not have much invested in this company. I will continue to hold what I have and I will continue to follow this company.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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.
The first thing I like to look at is the Insider Buying and Insider Selling reports. What I see for this company is Insider Selling to the tune of $2.8M. There is a very tiny bit of buying. All this selling occurred this year. The company has a Unit Trust Rights incentive plan, and when these rights invest, they seem mostly to be sold off. Although there are some exceptions, most of the insiders have far more Unit Trust Rights than Trust Units (or shares) in this company. I know that granting of options, rights etc was to align the management’s interest with the shareholders. I do not think this happens.
First of all, in valuing this company, looking at the P/E Ratio does not make much sense because it is all over the place. For example, because it is not expected to make much in earnings this year, I get a P/E of 285. The forward P/E ratio at 42 is better, but does not say much except earnings are not expected to be high in 2011 either. The Graham Price is not much better. This is based on earnings and book value and for 2007 it was $17.59, for 2008 was $39.63, for 2009 was $5.44. For 2010, I get $5.40 and for 2011, I get $14.00.
Since the Book Value not only goes up, it also goes down, the Price/Book Value Ratio also has problems, but this ratio is a bit more stable. The 10 year average is 1.54 and the 2010 P/B ratio is 1.08. The current ratio at 70% of the 10 year average shows a relatively good stock price. We also have problems with the dividend yield. The dividends tend to fluctuate with the price of oil. The current rate is 8.4% and the 5 year average is 11.9%.
When I check what analysts say about this company, a lot talk about cash flow, so let’s looks at the Price/Cash Flow Ratios. I track Cash Flow from Operations, and I get a 2009 P/CF of 5.6 and an estimated current P/CF 6.0. The 5 and 10 year averages for the P/CF is 5.9 and 5.6 respectively. So it looks like the current one is around the averages.
When I look at analysts’ recommendations, I find there are Strong Buy, Buy, Hold and Underperform recommendations. (See my site for information on analyst ratings.) The consensus recommendation is a Hold. Not much that is negative is said about this stock. Analysts like their resource assets.
The analysts with Hold recommendations mention that they feel that distributions will be cut when the company changes to a corporation. It is felt that buying after the company converts to a corporation might be better timing. This company has said they will pay the current distributions until August. They do not seem to say what the distribution will be after that. Analysts with Buy and Strong Buy recommendations really like the recent cash infusion from China Investment Corp. This will allow the company to pay off some of their debts and develop their assets.
As I said yesterday, I do not have much invested in this company. I will continue to hold what I have and I will continue to follow this company.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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.
Wednesday, May 19, 2010
Penn West Energy Trust
I am going back to reviewing the stocks that I own for which I have received an annual report in 2009. In 1998, I bought a stock called Maximum Energy Trust. Over the years what I had has merged and been bought out etc and what I have left is this stock, Penn West Energy Trust (TSX-PWT.UN). According to Quicken, I have made a total return of 8% per year on my purchase.
I have very little of this stock and the initial purchase as small. Why I have any oil and gas stock is to try to get track of what is happening in this Canadian resource. Although I do not buy much in resource stock, I feel that it is important to keep track of what is happening in this area, as resources do affect greatly the Canadian economy.
The first thing to talk about is that I have apparently done better with my investment then this spreadsheet shows. The spreadsheet tracks Petrofund into the current Penn West Company. Penn West and Petrofund merged in 2006. With this stock, you have to track some past stock into this one because of the past amalgamations and buyouts, and I chose Petrofund because that is what I had prior to the changes in 2006. My 5 year total return is 11.7% per year and this spreadsheet shows a 5 year total return of 8.8% per year.
All the past buyouts and amalgamations has caused the number of shares to increase at a high rate of 60% per year. When you look at growth values per shares, this stock has done poorly compared to the growth in the particular values. For example, the book value over the past 10 years has increased by just over 8,000%, but the growth in book value per share has only increased by 88% or 6.5% per year. I think in the final analysis, the growth per share is what really counts. When you buy a company, you are buying shares in the company. Therefore, value on a per share basis is what really counts to you.
The other thing that is very noticeable on this stock is that the stock’s value has not increased over the past 5 and 10 years. The only reason that the total return is positive and good is because of the dividend payments received. The capital gain portion of the total return over the last 5 and 10 years is -.6.5% per year and - .5% respectively, compared with the total returns of 8.8% per year and 23.9% per year, respectively. Another way of putting this is that the return over the past 10 years is all dividends, nothing else. However, we are in a recession and oil prices are low.
Although the Liquidity Ratio is low at 0.68, the Asset/Liability Ratio is very good at 2.43. The Leverage Ratio (Asset to Book Value) is fine at rather low of 1.70. It would be nice if the cash flow statement had some positive value, but it was 0 for both 2008 and 2009. For the 1st quarter of 2010, the cash flow (and therefore the deficit) was equal to the distributions paid out.
It will be interesting to see what the analysts say about this stock. I shall look at this tomorrow. I will continue to keep this stock and track it at present.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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.
I have very little of this stock and the initial purchase as small. Why I have any oil and gas stock is to try to get track of what is happening in this Canadian resource. Although I do not buy much in resource stock, I feel that it is important to keep track of what is happening in this area, as resources do affect greatly the Canadian economy.
The first thing to talk about is that I have apparently done better with my investment then this spreadsheet shows. The spreadsheet tracks Petrofund into the current Penn West Company. Penn West and Petrofund merged in 2006. With this stock, you have to track some past stock into this one because of the past amalgamations and buyouts, and I chose Petrofund because that is what I had prior to the changes in 2006. My 5 year total return is 11.7% per year and this spreadsheet shows a 5 year total return of 8.8% per year.
All the past buyouts and amalgamations has caused the number of shares to increase at a high rate of 60% per year. When you look at growth values per shares, this stock has done poorly compared to the growth in the particular values. For example, the book value over the past 10 years has increased by just over 8,000%, but the growth in book value per share has only increased by 88% or 6.5% per year. I think in the final analysis, the growth per share is what really counts. When you buy a company, you are buying shares in the company. Therefore, value on a per share basis is what really counts to you.
The other thing that is very noticeable on this stock is that the stock’s value has not increased over the past 5 and 10 years. The only reason that the total return is positive and good is because of the dividend payments received. The capital gain portion of the total return over the last 5 and 10 years is -.6.5% per year and - .5% respectively, compared with the total returns of 8.8% per year and 23.9% per year, respectively. Another way of putting this is that the return over the past 10 years is all dividends, nothing else. However, we are in a recession and oil prices are low.
Although the Liquidity Ratio is low at 0.68, the Asset/Liability Ratio is very good at 2.43. The Leverage Ratio (Asset to Book Value) is fine at rather low of 1.70. It would be nice if the cash flow statement had some positive value, but it was 0 for both 2008 and 2009. For the 1st quarter of 2010, the cash flow (and therefore the deficit) was equal to the distributions paid out.
It will be interesting to see what the analysts say about this stock. I shall look at this tomorrow. I will continue to keep this stock and track it at present.
It is the largest conventional oil and natural gas producing trust in North America. They operate only in Alberta. Its web site is here Penn West. See my spreadsheet at pwt.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.
Tuesday, May 18, 2010
Marsulex Inc 2
I am continuing my review of the small cap dividend paying stock, Marsulex Inc (TSX-MLX) today for which I have recently done a spreadsheet on. I did a spreadsheet after reading a good investment report. I do not own any of this stock. The report said they liked the strong financial performance of this stock and the strong dividend.
When I look at Insider Buying and Insider Selling, I find that there has been no activity during the past year. From what I can gleam, the President of this company Laurie Tugman, owns some 204,000 shares and at $12, a share is worth about $2.4M. The management seems to have confidence in this company as they have raised their dividend by just over 15% in mid 2009.
The 5 year average low P/E Ratio is high at 38 and the 5 year average high is even higher at 49.7. The main reason being, but not the only one, is that the P/E ratios for 2005 are very high because of the strong dip in earnings for that year. Without 2005, the low P/E is 17 and the high 25. These P/E are still high. The current P/E is much more reasonable at 15. I get a current P/E based on earning estimates.
For this year, I get a Graham Price of $7.82. The current stock price of $12.03 is some 58% above the Graham Price. This stock has a tendency of being above the Graham Price. When I look at the Price/Book Value Ratio, I get a current one of 3.5 and this is some 37% above the 10 year average of 2.55. The current yield of 6.2% is a good one, and the average yield is slightly below at 6.1%. However, the yield, especially in 2008 was better when it had a high yield of 9.9%.
The analysts’ recommendations range from Strong Buy to Buy to Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Analysts’ do not seem to expect a great financial year for 2010, but expect much better results in 2011. It is also expected that the company will raise their dividends in 2010. None of the ratios I use shows that the current stock price to be particularly good, but rather reasonable.
As I said yesterday, I not in the market to buy anymore stocks at this time. However, this does look interesting and I will keep an eye on it and follow it.
Marsulex Inc. is a provider of industrial services, primarily environmental compliance solutions for air quality control and industrial hazardous waste streams, and a producer and marketer of sulphur-based industrial and water treatment chemicals. The Company's activities are divided into four reportable segments. The three operating segments are Industrial Services, Western Markets and Marsulex Environmental Technologies. The fourth non-operating segment is Corporate Support, which provides centralized services, such as finance, information systems, human resources and risk management to the operating segments. Its web site is here Marsulex. See my spreadsheet at mlx.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.
When I look at Insider Buying and Insider Selling, I find that there has been no activity during the past year. From what I can gleam, the President of this company Laurie Tugman, owns some 204,000 shares and at $12, a share is worth about $2.4M. The management seems to have confidence in this company as they have raised their dividend by just over 15% in mid 2009.
The 5 year average low P/E Ratio is high at 38 and the 5 year average high is even higher at 49.7. The main reason being, but not the only one, is that the P/E ratios for 2005 are very high because of the strong dip in earnings for that year. Without 2005, the low P/E is 17 and the high 25. These P/E are still high. The current P/E is much more reasonable at 15. I get a current P/E based on earning estimates.
For this year, I get a Graham Price of $7.82. The current stock price of $12.03 is some 58% above the Graham Price. This stock has a tendency of being above the Graham Price. When I look at the Price/Book Value Ratio, I get a current one of 3.5 and this is some 37% above the 10 year average of 2.55. The current yield of 6.2% is a good one, and the average yield is slightly below at 6.1%. However, the yield, especially in 2008 was better when it had a high yield of 9.9%.
The analysts’ recommendations range from Strong Buy to Buy to Hold. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Analysts’ do not seem to expect a great financial year for 2010, but expect much better results in 2011. It is also expected that the company will raise their dividends in 2010. None of the ratios I use shows that the current stock price to be particularly good, but rather reasonable.
As I said yesterday, I not in the market to buy anymore stocks at this time. However, this does look interesting and I will keep an eye on it and follow it.
Marsulex Inc. is a provider of industrial services, primarily environmental compliance solutions for air quality control and industrial hazardous waste streams, and a producer and marketer of sulphur-based industrial and water treatment chemicals. The Company's activities are divided into four reportable segments. The three operating segments are Industrial Services, Western Markets and Marsulex Environmental Technologies. The fourth non-operating segment is Corporate Support, which provides centralized services, such as finance, information systems, human resources and risk management to the operating segments. Its web site is here Marsulex. See my spreadsheet at mlx.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.
Monday, May 17, 2010
Marsulex Inc
Instead of continuing my review of stock that have published their annual statements, I thought I would review a small cap dividend paying stock, Marsulex Inc (TSX-MLX) today for which I have recently done a spreadsheet on. I did a spreadsheet after reading a good investment report. I do not own any of this stock. The report said they liked the strong financial performance of this stock and the strong dividend.
I have not got complete 10 year figures on this company as their website has limited financial information. From what I got, the 10 year figures for revenue and earnings are not good. However, the 5 year figures for these items are. The 5 year growth in revenue per share is 17% per year, and the 5 year growth in earnings is 45% per year.
The total return growth for the last 5 and 10 years are the best with growth of 14.7% and 15.8% per year respectively. The last growth figures for Cash Flow and Book Value are mixed. The 10 year growth for cash flow shows no growth, but the 5 year growth is 22.4% per year. The Book Value in basically the reverse and shows a 12% growth per year for the last 10 years, but a growth of only 3% per year for the last 5 years. This is a small cap company, so it is not unusual to have growth that is rather mixed.
The Liquidity Ratio is rather low at 0.86. This means that the current assets cannot cover the current liabilities. However, the cash flow statements have a positive flow for both 2008 and 2009. The Asset/Liability Ratio is much better at 1.46, but I would prefer this to be higher at 1.50. The last thing to mention is the Asset/Book Value Ratio (or leverage). This ratio is a bit high at 3.16, but it has been coming down since a peak in 2006 at 3.91.
The first quarterly results are in and the company has reported an 8.5% decline in Revenues, but a 150% increase in earnings. However, the estimates given by analysts still seem to expect that the final earnings for 2010 and 2011 will be lower than that for 2009. The Book Value for this quarter is down slightly. The last thing to mention is that the Accrual Ratio is at a very good -7.6%. An Accrual Ratio of -5% or less is great.
Currently, I not in the market to buy anymore stocks, but this does look interesting and I will keep an eye on it and follow it.
Marsulex Inc. is a provider of industrial services, primarily environmental compliance solutions for air quality control and industrial hazardous waste streams, and a producer and marketer of sulfur-based industrial and water treatment chemicals. The Company's activities are divided into four reportable segments. The three operating segments are Industrial Services, Western Markets and Marsulex Environmental Technologies. The fourth non-operating segment is Corporate Support, which provides centralized services, such as finance, information systems, human resources and risk management to the operating segments. Its web site is here Marsulex. See my spreadsheet at mlx.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.
I have not got complete 10 year figures on this company as their website has limited financial information. From what I got, the 10 year figures for revenue and earnings are not good. However, the 5 year figures for these items are. The 5 year growth in revenue per share is 17% per year, and the 5 year growth in earnings is 45% per year.
The total return growth for the last 5 and 10 years are the best with growth of 14.7% and 15.8% per year respectively. The last growth figures for Cash Flow and Book Value are mixed. The 10 year growth for cash flow shows no growth, but the 5 year growth is 22.4% per year. The Book Value in basically the reverse and shows a 12% growth per year for the last 10 years, but a growth of only 3% per year for the last 5 years. This is a small cap company, so it is not unusual to have growth that is rather mixed.
The Liquidity Ratio is rather low at 0.86. This means that the current assets cannot cover the current liabilities. However, the cash flow statements have a positive flow for both 2008 and 2009. The Asset/Liability Ratio is much better at 1.46, but I would prefer this to be higher at 1.50. The last thing to mention is the Asset/Book Value Ratio (or leverage). This ratio is a bit high at 3.16, but it has been coming down since a peak in 2006 at 3.91.
The first quarterly results are in and the company has reported an 8.5% decline in Revenues, but a 150% increase in earnings. However, the estimates given by analysts still seem to expect that the final earnings for 2010 and 2011 will be lower than that for 2009. The Book Value for this quarter is down slightly. The last thing to mention is that the Accrual Ratio is at a very good -7.6%. An Accrual Ratio of -5% or less is great.
Currently, I not in the market to buy anymore stocks, but this does look interesting and I will keep an eye on it and follow it.
Marsulex Inc. is a provider of industrial services, primarily environmental compliance solutions for air quality control and industrial hazardous waste streams, and a producer and marketer of sulfur-based industrial and water treatment chemicals. The Company's activities are divided into four reportable segments. The three operating segments are Industrial Services, Western Markets and Marsulex Environmental Technologies. The fourth non-operating segment is Corporate Support, which provides centralized services, such as finance, information systems, human resources and risk management to the operating segments. Its web site is here Marsulex. See my spreadsheet at mlx.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.
Friday, May 14, 2010
Water by Steven Solomon
The full title of this book is Water: The Epic Struggle for Wealth, Power, and Civilization. This is a great book for anyone concerned with our environment. We never seem to value water. We seem to feel it should be free. Unfortunately, humans place little value on what is free. To state that we abuse our water, fresh or otherwise, is to grossly underestimate the harm we are doing.
I do have on quibble with this book Solomon may understand water and our history with it, but he does not have the same understanding of history. For example, he states that the Islamic Middle East made math discoveries. However, the Islamic Middle East got their math from the Greeks, the Indians and even ancient Egypt. Our “Arabic” numerals came from India. Our Greek knowledge was preserved and transmitted to Europe by Christians in the Middle East. Europe did not recognize the Christians of the Middle East as Christians as they were not Catholic. However, this is way off topic.
Steven Solomon does make an interesting observation about sub-Saharan Africa. Although there was some impressive civilization there that developed around the Niger River, and the headwaters of the Senegal and Gambia Rivers, there just was not the development that occurred in Europe, Asia or the Americas. He talks about how these civilizations were isolated behind barriers of large deserts and the impenetrable ocean that limited their ability to engage with other societies. This could well explain the lack of development in Africa that occurs elsewhere.
One interesting thing he talks about is how the West is currently endowed with a water resource advantage. In most of the Western world, there is generally modest population pressure and a moist, temperate environment, making the West an overall water power. This did not help initiate civilization in our moist temperate areas, but it is now an advantage. As we, all know, civilization started in the relatively dry areas that were river valleys. These areas depended on irrigation systems and now seem to be all in trouble with having enough water.
Our civilization seems to have advanced so much over the last hundred years. So is it now surprising to find that electricity generation has not? I mean that we generate electricity using water in the same old ways. We create steam to move turbines to generate electricity or we use rushing water (i.e. dams or waterfalls) to turn turbines to generate electricity. I know we are trying to do this differently, that is use windmills (actually an old idea) or use the sun, but we have not made that much progress yet.
I knew about the huge water aquifer in the Midwest of the United States. I did not know that Saudi Arabia also has one that they are tapping. The one in Saudi Arabia is much further below the surface at ¼ mile deep. The one thing that is the same as in America, they are taking out far too much water for this to last long. Libya also has a big aquifer called Nubian Sandstone Aquifer. And guess what, Libya is intent on taking as much as they can from it and damn the future also.
Also, I knew about the destruction of the Aral Sea by the Russians. However, I had not heard of Lake Chad’s destruction. I live in Toronto, Ontario, Canada. This city is on a big lake, Lake Ontario, where we get all our drinking water. People always seem to feel that you can not destroy large bodies of water. The problem, of course, is that you can. All the people living a round this lake have acted in the last 30 years to clean up the lake as it got quite polluted. However, to this day, when there is a big storm in Toronto, we still put raw sewage into Lake Ontario. We have not separated our storm sewers from our other sewer system and a big storm will overload our plants that clean the water that is to be put back into the lake. We are no better than anyone else is.
Steven Solomon has his own web page at Waterblog. There is also a site talking about Steven Solomon devoted to the Global Water Crisis. There is an interesting review of this book at WaterWired. There is a book review at the Los Angeles Times.
He is a speaker on Carnegie Council’s website. See videos for Steven Solomon under Resources at Carnegie Council. The video on this site is about 1 hour long. However, it is not very interesting. Steven just reads from prepared notes. However, there are lots of great interviews on this site, so you might want to check it out even if you do not listen to Steven Solomon.
On my website is how to find this book on Amazon if you care to purchase it. See Solomon. 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 for stocks followed and investment notes. Follow me on twitter.
I do have on quibble with this book Solomon may understand water and our history with it, but he does not have the same understanding of history. For example, he states that the Islamic Middle East made math discoveries. However, the Islamic Middle East got their math from the Greeks, the Indians and even ancient Egypt. Our “Arabic” numerals came from India. Our Greek knowledge was preserved and transmitted to Europe by Christians in the Middle East. Europe did not recognize the Christians of the Middle East as Christians as they were not Catholic. However, this is way off topic.
Steven Solomon does make an interesting observation about sub-Saharan Africa. Although there was some impressive civilization there that developed around the Niger River, and the headwaters of the Senegal and Gambia Rivers, there just was not the development that occurred in Europe, Asia or the Americas. He talks about how these civilizations were isolated behind barriers of large deserts and the impenetrable ocean that limited their ability to engage with other societies. This could well explain the lack of development in Africa that occurs elsewhere.
One interesting thing he talks about is how the West is currently endowed with a water resource advantage. In most of the Western world, there is generally modest population pressure and a moist, temperate environment, making the West an overall water power. This did not help initiate civilization in our moist temperate areas, but it is now an advantage. As we, all know, civilization started in the relatively dry areas that were river valleys. These areas depended on irrigation systems and now seem to be all in trouble with having enough water.
Our civilization seems to have advanced so much over the last hundred years. So is it now surprising to find that electricity generation has not? I mean that we generate electricity using water in the same old ways. We create steam to move turbines to generate electricity or we use rushing water (i.e. dams or waterfalls) to turn turbines to generate electricity. I know we are trying to do this differently, that is use windmills (actually an old idea) or use the sun, but we have not made that much progress yet.
I knew about the huge water aquifer in the Midwest of the United States. I did not know that Saudi Arabia also has one that they are tapping. The one in Saudi Arabia is much further below the surface at ¼ mile deep. The one thing that is the same as in America, they are taking out far too much water for this to last long. Libya also has a big aquifer called Nubian Sandstone Aquifer. And guess what, Libya is intent on taking as much as they can from it and damn the future also.
Also, I knew about the destruction of the Aral Sea by the Russians. However, I had not heard of Lake Chad’s destruction. I live in Toronto, Ontario, Canada. This city is on a big lake, Lake Ontario, where we get all our drinking water. People always seem to feel that you can not destroy large bodies of water. The problem, of course, is that you can. All the people living a round this lake have acted in the last 30 years to clean up the lake as it got quite polluted. However, to this day, when there is a big storm in Toronto, we still put raw sewage into Lake Ontario. We have not separated our storm sewers from our other sewer system and a big storm will overload our plants that clean the water that is to be put back into the lake. We are no better than anyone else is.
Steven Solomon has his own web page at Waterblog. There is also a site talking about Steven Solomon devoted to the Global Water Crisis. There is an interesting review of this book at WaterWired. There is a book review at the Los Angeles Times.
He is a speaker on Carnegie Council’s website. See videos for Steven Solomon under Resources at Carnegie Council. The video on this site is about 1 hour long. However, it is not very interesting. Steven just reads from prepared notes. However, there are lots of great interviews on this site, so you might want to check it out even if you do not listen to Steven Solomon.
On my website is how to find this book on Amazon if you care to purchase it. See Solomon. 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 for stocks followed and investment notes. Follow me on twitter.
Thursday, May 13, 2010
Superior Plus Corp 2
I am continuing my review this stock (TSX-SPB) today as the annual report for 2009 has been issued and I follow this stock. The company changed from a Unit Trust to a corporation in 2009. What I want to look at today is the ratios that deal with stock price and look at insider information.
The good think about the Insider Buying and Insider Selling report is that there has been more insider buying than selling. There is not a lot of Insider Buying, at just less than $.4M, but it is good to see. The other thing than I like is that insider have more shares than options. The only place I can find out what the CEO and CFO Officers own is the Information Circular for the annual meetings. Here I find that the CEO owns just over 1.8M shares. The other thing I like coming from management is their promise to maintain the strict management discipline to ensure the continuation of the company’s dividend.
When I look at the P/E ratios, I find this company has a 5 year average low of 11.9 and a 5 year average high of 18.7. The current P/E I get based on earnings estimates is 13.2, a not unreasonable P/E ratio. With the Graham Price, I get a current one of $11.36. This is 15% below the current stock price of $13.16. It would seem that, the stock price, especially in recent years has gone below the Graham Price sometime during the year.
When I look at the Price/Book Value, I get a current ratio of 1.29. This is just above the 10 year average of 2.11. What would signal a good stock price is a P/B Ratio 80% below the 10 year average of 2.11. The last thing to look at is the dividend yield. The current yield is 12.3% and the 5 year average is 11.8%. This is a good yield and it is slightly above the 5 year average. This is the only stock price test that shows a reasonable current stock price.
So, what do the analysts say? When I look at analysts’ recommendations, I see an awful lot of Hold recommendations. There are a few Buy recommendations, but very few. (See my site for information on analyst ratings.) The consensus recommendations would be a Hold. I think that the major reason for the Hold is that analysts think the stock is fully, or overpriced. Those analysts with Buy recommendations mention the very good current dividend yield.
I will not be buying this stock anytime soon. I have enough stocks in the Unit Trust converting to corporation category. I will continue to follow this stock.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior’s Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior’s Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior’s Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior. See my spreadsheet at spb.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.
The good think about the Insider Buying and Insider Selling report is that there has been more insider buying than selling. There is not a lot of Insider Buying, at just less than $.4M, but it is good to see. The other thing than I like is that insider have more shares than options. The only place I can find out what the CEO and CFO Officers own is the Information Circular for the annual meetings. Here I find that the CEO owns just over 1.8M shares. The other thing I like coming from management is their promise to maintain the strict management discipline to ensure the continuation of the company’s dividend.
When I look at the P/E ratios, I find this company has a 5 year average low of 11.9 and a 5 year average high of 18.7. The current P/E I get based on earnings estimates is 13.2, a not unreasonable P/E ratio. With the Graham Price, I get a current one of $11.36. This is 15% below the current stock price of $13.16. It would seem that, the stock price, especially in recent years has gone below the Graham Price sometime during the year.
When I look at the Price/Book Value, I get a current ratio of 1.29. This is just above the 10 year average of 2.11. What would signal a good stock price is a P/B Ratio 80% below the 10 year average of 2.11. The last thing to look at is the dividend yield. The current yield is 12.3% and the 5 year average is 11.8%. This is a good yield and it is slightly above the 5 year average. This is the only stock price test that shows a reasonable current stock price.
So, what do the analysts say? When I look at analysts’ recommendations, I see an awful lot of Hold recommendations. There are a few Buy recommendations, but very few. (See my site for information on analyst ratings.) The consensus recommendations would be a Hold. I think that the major reason for the Hold is that analysts think the stock is fully, or overpriced. Those analysts with Buy recommendations mention the very good current dividend yield.
I will not be buying this stock anytime soon. I have enough stocks in the Unit Trust converting to corporation category. I will continue to follow this stock.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior’s Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior’s Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior’s Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior. See my spreadsheet at spb.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.
Wednesday, May 12, 2010
Superior Plus Corp
I am reviewing this stock (TSX-SPB) today as the annual report for 2009 has been issued and I follow this stock. I moved in up in my review line up because I was asked to by a reader of my blog. I do not own any shares in this company. The company changed from a Unit Trust to a corporation in 2009.
The company has debt covenants that could restrict dividend payments if certain ratios are not within the requirements set forth in such debt covenants. This is normal in debt covenants. The company does not expect any future problems with dividends in regards to their debt covenants. The company says it understands the importance of dividend to their shareholders and they will continue to maintain the strict management discipline of ensuring that their short- and long-term decisions are made with the purpose of providing their shareholders with a stable long-term dividend.
The first thing I noticed when updating the spreadsheet is that 2009 was not a good year for this company as revenues, earnings and book value all declined. This puts the 5 year growth figures for these items in negative (or close to negative) growth. Even with the great dividend yield, the 5 year total return on this stock was also in negative territory.
The 10 year growth figures were much better. For example, the revenue per share grew 9.9% per year and the earnings grew 11.6% per year. Even the 10 year total return growth was quite good, coming in at 14.7% per year. I think the real problem is the volatility in cash flow. Their cash flow problems stretches back a ways, at least to 2003. The best that I can say is that, since 2008, the dividends paid has not been greater than the cash flow.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. Both these ratios are low. The current Liquidity Ratio is at 1.24 and the A/L Ratio is 1.34. These ratios are at least over 1.00; however, I would much prefer these ratios to be at least at 1.50. The point is that the company’s balance sheet is weak. I should note that I am showing the most recent ratios. Both these ratios declined from the end of 2009 when the Liquidity ratio was 1.38 and the A/L Ratio was 1.35. The 2009 ratios were not great ones, but they were at least better.
The first quarterly results of March 2010, has been in many respects quite good, with revenues, earnings and cash flow coming in better than for March 2009. The problem areas are Liquidity and A/L Ratios mentioned above and the decline in Book Value per share. The decline in Book Value per shares has more to do with the increase in shares outstanding, as Book Value increased, but not enough to cover the new outstanding shares.
Tomorrow I will talk about what the analysts say and look at spreadsheet ratios involving the stock price.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior’s Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior’s Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior’s Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior. See my spreadsheet at spb.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.
The company has debt covenants that could restrict dividend payments if certain ratios are not within the requirements set forth in such debt covenants. This is normal in debt covenants. The company does not expect any future problems with dividends in regards to their debt covenants. The company says it understands the importance of dividend to their shareholders and they will continue to maintain the strict management discipline of ensuring that their short- and long-term decisions are made with the purpose of providing their shareholders with a stable long-term dividend.
The first thing I noticed when updating the spreadsheet is that 2009 was not a good year for this company as revenues, earnings and book value all declined. This puts the 5 year growth figures for these items in negative (or close to negative) growth. Even with the great dividend yield, the 5 year total return on this stock was also in negative territory.
The 10 year growth figures were much better. For example, the revenue per share grew 9.9% per year and the earnings grew 11.6% per year. Even the 10 year total return growth was quite good, coming in at 14.7% per year. I think the real problem is the volatility in cash flow. Their cash flow problems stretches back a ways, at least to 2003. The best that I can say is that, since 2008, the dividends paid has not been greater than the cash flow.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. Both these ratios are low. The current Liquidity Ratio is at 1.24 and the A/L Ratio is 1.34. These ratios are at least over 1.00; however, I would much prefer these ratios to be at least at 1.50. The point is that the company’s balance sheet is weak. I should note that I am showing the most recent ratios. Both these ratios declined from the end of 2009 when the Liquidity ratio was 1.38 and the A/L Ratio was 1.35. The 2009 ratios were not great ones, but they were at least better.
The first quarterly results of March 2010, has been in many respects quite good, with revenues, earnings and cash flow coming in better than for March 2009. The problem areas are Liquidity and A/L Ratios mentioned above and the decline in Book Value per share. The decline in Book Value per shares has more to do with the increase in shares outstanding, as Book Value increased, but not enough to cover the new outstanding shares.
Tomorrow I will talk about what the analysts say and look at spreadsheet ratios involving the stock price.
Superior Plus Corp. is a group of diversified businesses that operate within three primary divisions. Superior’s Energy Services division provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels throughout Canada and the North Eastern United States. Superior’s Specialty Chemicals division is a leading supplier of sodium chlorate and related technology to the pulp and paper sector and a regional Midwest supplier of chloralkali and potassium based products. Superior’s Construction Products Distribution division is a leading distributor of walls, ceilings and insulation products to the Canadian and United States construction industry. Its web site is here Superior. See my spreadsheet at spb.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.
Tuesday, May 11, 2010
Pembina Pipelines Inc Fund 2
I would like to continue to talk about this company (TSX-PIF.UN), which I first bought in December 2001. My total return on this company is 15.9% per year. The yield on this stock, like all unit trust companies, is quite high. The current yield is 8.7%. My yield is even higher at about 15.8%. This is because I bought this stock when it was still raising its dividend. The company has said that they plan to pay the same dividend until 2013.
The first discouraging thing about this company is the amount of Insider Selling. Over the past year, there has been Insider Selling to the tune of $2.6M. There has been some Insider Buying, but only about $.5M. Of course, you never know why people are selling. A bright spot is that insiders have more stock than options. The other bright spot, of course, is the plan to retain current dividend until 2013.
Last year, because of the Dividend Reinvestment Plan (DRIP), the number of trust units outstanding increased by about 8%. The company has now suspended the DRIP plan as it says it no longer needs to sell units to fund currently planned capital expenditures and because it now has a strong balance sheet.
When I look at the P/E, the 5 year average low is 14.8 and the 5 year average high is 20. I get a current P/E of 17 on a price of $18.36. When I look at the Graham Price, I get one for 2010 of $13.27. This is some 38% below the current stock price. This is very close to the 10 year average different between the Graham Price and the Stock price. Both the above P/E and the Graham Price are based on earnings estimates for 2010.
When I look at the Price/Book Value Ratio, I find that the current P/B Ratio at 2.53 is some 25% above the 10 year average of 2.02. What you want to see is a current ratio below the 10 year average and that would point at a good current stock price. The last item to look at is the yield. The current year at 8.7% is below the 5 year average of 9.3%. What you usually want is a current yield higher than the 5 year average. However, 8.7% yield is a very good yield. I do not think that any of the above point to a current good stock price.
When I go to look at what the analysts’ recommendations are, I find that they cover all types from Strong Buy, Buy, Hold, Underperform and Sell. By far the most recommendations are in the Hold category, so the consensus recommendation would be a Hold. It would seem that the Underperform and Sell recommendations come with a stock price to be achieved within the next 12 months that is below the current price. That is, they feel the stock is overpriced.
Because I am a long term investor, I do not sell a stock just because it is overpriced. I tend to stick with good stock and not buy and sell a lot. The market has a tendency to over and under price stocks all the time. One good thing I see with analysts comments is that no one seem to feel the dividend is going to be cut. Why some analysts seem to feel this is a good buy is because of the high dividend yield. You can collect a great dividend in the meantime as you wait for this stock, and the market in general, to recover.
As I said yesterday, I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.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.
The first discouraging thing about this company is the amount of Insider Selling. Over the past year, there has been Insider Selling to the tune of $2.6M. There has been some Insider Buying, but only about $.5M. Of course, you never know why people are selling. A bright spot is that insiders have more stock than options. The other bright spot, of course, is the plan to retain current dividend until 2013.
Last year, because of the Dividend Reinvestment Plan (DRIP), the number of trust units outstanding increased by about 8%. The company has now suspended the DRIP plan as it says it no longer needs to sell units to fund currently planned capital expenditures and because it now has a strong balance sheet.
When I look at the P/E, the 5 year average low is 14.8 and the 5 year average high is 20. I get a current P/E of 17 on a price of $18.36. When I look at the Graham Price, I get one for 2010 of $13.27. This is some 38% below the current stock price. This is very close to the 10 year average different between the Graham Price and the Stock price. Both the above P/E and the Graham Price are based on earnings estimates for 2010.
When I look at the Price/Book Value Ratio, I find that the current P/B Ratio at 2.53 is some 25% above the 10 year average of 2.02. What you want to see is a current ratio below the 10 year average and that would point at a good current stock price. The last item to look at is the yield. The current year at 8.7% is below the 5 year average of 9.3%. What you usually want is a current yield higher than the 5 year average. However, 8.7% yield is a very good yield. I do not think that any of the above point to a current good stock price.
When I go to look at what the analysts’ recommendations are, I find that they cover all types from Strong Buy, Buy, Hold, Underperform and Sell. By far the most recommendations are in the Hold category, so the consensus recommendation would be a Hold. It would seem that the Underperform and Sell recommendations come with a stock price to be achieved within the next 12 months that is below the current price. That is, they feel the stock is overpriced.
Because I am a long term investor, I do not sell a stock just because it is overpriced. I tend to stick with good stock and not buy and sell a lot. The market has a tendency to over and under price stocks all the time. One good thing I see with analysts comments is that no one seem to feel the dividend is going to be cut. Why some analysts seem to feel this is a good buy is because of the high dividend yield. You can collect a great dividend in the meantime as you wait for this stock, and the market in general, to recover.
As I said yesterday, I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.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.
Monday, May 10, 2010
Pembina Pipelines Inc Fund
I first bought this company (TSX-PIF.UN) in December 2001 and then a small bit more in 2009. My total return on this company is 15.9% per year. The yield on this stock, like all unit trust companies, is quite high. The current yield is 9%. My yield is even higher at about 15.8%. This is because I bought this stock when it was still raising its dividend. No one expects it to raise the dividend again, any time soon.
First, lest talk about growth figures. I have used purple on the growth in dividends, because, as I said above, they are not going to increase anytime soon. I do not find that a problem, because of the high yield on this stock. However, I think that cash Flow growth is a problem area. It is not that they have not grown the cash flow, but they are issuing a lot of shares, so the cash flow per share has been growing for the last 5 and 10 years only around only 4% per year. This is rather low. Analysts expect better growth for 2010, but I should also state that expected cash flow per share for 2009 was $1.65 and it came in at $1.42.
Also, there has not been much growth in book value. This, unfortunately, is typical of unit trust companies. The 5 and 10 year growth in book value has only been 2.3% and 1.3% per year, respectively. Other growth figures I follow are revenue and earnings and these have been growing fine for this company. There is a big difference in growth in revenue and growth in revenue per share. This is because the company has been issuing shares. Of the 17% increase in shares in 2009, a little over half was for purchasing Cutback Complex. The rest was in connection with this Distribution Reinvestment Plan.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. First, the A/L Ratio is quite high at 1.78 and this ratio has a 5 and 10 year average of 1.86 and 1.89 respectively. When you first look at the Liquidity Ratio, it looks low at only 0.55. This means the current assets cannot cover current liabilities. However, the reason it is so low is because of a portion of the long term debt coming due in 2009. This debt has been rolled over. When this long term debt due in 2009 is excluded, the ratio is better at 1.31.
I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio. Pembina expects to convert to a corporation in July of this year.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.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.
First, lest talk about growth figures. I have used purple on the growth in dividends, because, as I said above, they are not going to increase anytime soon. I do not find that a problem, because of the high yield on this stock. However, I think that cash Flow growth is a problem area. It is not that they have not grown the cash flow, but they are issuing a lot of shares, so the cash flow per share has been growing for the last 5 and 10 years only around only 4% per year. This is rather low. Analysts expect better growth for 2010, but I should also state that expected cash flow per share for 2009 was $1.65 and it came in at $1.42.
Also, there has not been much growth in book value. This, unfortunately, is typical of unit trust companies. The 5 and 10 year growth in book value has only been 2.3% and 1.3% per year, respectively. Other growth figures I follow are revenue and earnings and these have been growing fine for this company. There is a big difference in growth in revenue and growth in revenue per share. This is because the company has been issuing shares. Of the 17% increase in shares in 2009, a little over half was for purchasing Cutback Complex. The rest was in connection with this Distribution Reinvestment Plan.
The next thing to talk about is the Liquidity Ratio and the Asset/Liability Ratio. First, the A/L Ratio is quite high at 1.78 and this ratio has a 5 and 10 year average of 1.86 and 1.89 respectively. When you first look at the Liquidity Ratio, it looks low at only 0.55. This means the current assets cannot cover current liabilities. However, the reason it is so low is because of a portion of the long term debt coming due in 2009. This debt has been rolled over. When this long term debt due in 2009 is excluded, the ratio is better at 1.31.
I feel that I have a solid investment in this stock and I will continue to hold what I have. I will not be buying more because I have enough in my portfolio. I never let any one stock get too large a proportion of portfolio. Pembina expects to convert to a corporation in July of this year.
This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is here Pembina. See my spreadsheet at pif.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.
Friday, May 7, 2010
Pareto Corp 2
I bought this company (TSX-PTO) in June 2009. It is a small cap dividend paying company. I do not have a lot invested in this company, as that is hard to do when the stock price is just around $1. Since I bought this stock, I have earned a Total Return of 125%. The stock has done quite well.
When I look at Insider Buying and Insider Selling, I only find some Insider Buying. This year some officers of the company have brought some $40,000 of this stock. This is not a lot, but it does show confidence in the company. Also, Insiders have been retaining their stock options. The other good thing is that the company has raised their dividends for 2010 and has also given out a special dividend. This shows that the management of this company has confidence in future earnings.
I get a P/E ratio of just 8.8 using the current stock price and estimated earnings for 2010. The 5 year average low P/E ratio is 11.7 and the 5 year average high is 20.5. For the Graham Price, I get $1.57. The stock price at $1.68 is some 7% above the Graham Price. This is not a bad stock price relative to the Graham Price. When you look at averages, the average low is 9% below the Graham Price and the average high is 68% above the Graham Price.
When I look at the dividend yield, I see that the current one of 4.8% is below the average of the last two years. However, the stock price on this company has been quite low over the last two years due to the recession. I should point out that a dividend yield of 4.8% is quite good. The last thing to look at is the Price/Book Value Ratio. The P/BV Ratio at 2.90 is about the same as the 9 year average of 2.93. So, it would seem that the current price is reasonable, but not a low as it has been over the past 2 years.
When I look for analyst recommendations, I seem to be only able to find one and that recommendation is a buy. (See my site for information on analyst ratings.) The only comments I can only find comments about this company is that the dividends are great and the fact that the company has been busy buying back shares. The shares outstanding were reduced by 25% in 2009.
I am pleased with my investment in this company. I will probably buy more in the future. However, I should point out that this is a small cap company, so these shares are not for everyone. The risk level, because it is a small cap is quite high.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.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.
When I look at Insider Buying and Insider Selling, I only find some Insider Buying. This year some officers of the company have brought some $40,000 of this stock. This is not a lot, but it does show confidence in the company. Also, Insiders have been retaining their stock options. The other good thing is that the company has raised their dividends for 2010 and has also given out a special dividend. This shows that the management of this company has confidence in future earnings.
I get a P/E ratio of just 8.8 using the current stock price and estimated earnings for 2010. The 5 year average low P/E ratio is 11.7 and the 5 year average high is 20.5. For the Graham Price, I get $1.57. The stock price at $1.68 is some 7% above the Graham Price. This is not a bad stock price relative to the Graham Price. When you look at averages, the average low is 9% below the Graham Price and the average high is 68% above the Graham Price.
When I look at the dividend yield, I see that the current one of 4.8% is below the average of the last two years. However, the stock price on this company has been quite low over the last two years due to the recession. I should point out that a dividend yield of 4.8% is quite good. The last thing to look at is the Price/Book Value Ratio. The P/BV Ratio at 2.90 is about the same as the 9 year average of 2.93. So, it would seem that the current price is reasonable, but not a low as it has been over the past 2 years.
When I look for analyst recommendations, I seem to be only able to find one and that recommendation is a buy. (See my site for information on analyst ratings.) The only comments I can only find comments about this company is that the dividends are great and the fact that the company has been busy buying back shares. The shares outstanding were reduced by 25% in 2009.
I am pleased with my investment in this company. I will probably buy more in the future. However, I should point out that this is a small cap company, so these shares are not for everyone. The risk level, because it is a small cap is quite high.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.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.
Thursday, May 6, 2010
Pareto Corp
I bought this company (TSX-PTO) in June 2009. It is a small cap dividend paying company. I do not have a lot invested in this company, as that is hard to do when the stock price is just over $1. Since I bought this stock, I have earned a return of 125%. The stock price has risen quite well. The dividend increases have been great. Dividends were first paid in 2008. They were raised 50% in 2009, and another 33% in 2010. Also, in 2010 I received a special dividend of $.04 per share.
When looking at the growth figures, the worst is for Total Return. The 5 and 9 year growth in Total Return are 5.9% and 9% per year respectively. This company has had a number of name changes and I cannot find financial or stock prices before 2001. Also, since some of the figures in 2001 and 2002 were negative, I have only 5 year growth figures for such things as earnings and cash flow. The 5 year growth figures for earnings and cash flow are 8.7% and 14.4% respectively. Book Value growth and revenue growth are also good for the stock.
The Liquidity Ratios is a little low at 1.05 for 2009 and at 1.10 for a 5 year average. The Asset/Liability Ratio is much better at 1.61 for 2009 and 2.03 for a 5 year average. And, on to the last thing I want to talk about, which is the Return on Equity. The ROE for 2009 was 23.7%, a great figure. The 5 year running average ROE is 14.4% and a good figure also.
I am pleased with my investment in this company. I will probably buy some more of this stock as I think it has a great future. However, I should stress that this is a small cap and therefore quite risky for a dividend paying stock.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.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.
When looking at the growth figures, the worst is for Total Return. The 5 and 9 year growth in Total Return are 5.9% and 9% per year respectively. This company has had a number of name changes and I cannot find financial or stock prices before 2001. Also, since some of the figures in 2001 and 2002 were negative, I have only 5 year growth figures for such things as earnings and cash flow. The 5 year growth figures for earnings and cash flow are 8.7% and 14.4% respectively. Book Value growth and revenue growth are also good for the stock.
The Liquidity Ratios is a little low at 1.05 for 2009 and at 1.10 for a 5 year average. The Asset/Liability Ratio is much better at 1.61 for 2009 and 2.03 for a 5 year average. And, on to the last thing I want to talk about, which is the Return on Equity. The ROE for 2009 was 23.7%, a great figure. The 5 year running average ROE is 14.4% and a good figure also.
I am pleased with my investment in this company. I will probably buy some more of this stock as I think it has a great future. However, I should stress that this is a small cap and therefore quite risky for a dividend paying stock.
Pareto is a Canadian marketing services and execution company committed to helping clients sell more. They service Canada’s most successful businesses through our network of services; Retail Merchandising,
In-Retail Messaging, Direct Marketing, and Incentives. Its web site is here Pareto. See my spreadsheet at pto.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.
Wednesday, May 5, 2010
Melcor Developments Inc 2
I want to continue today to talk about this company (TSX-MRD) that I bought in 2008 and because the price really dropped, I picked up a bit more in 2009. My total return on this stock, including dividends is 12.3% per year. The reason for the great return is because of my purchase in 2009 at a stock low point.
When I look at insider buying and insider selling, I see that there is only insider buying. This amount to only .28M, but it is a good sign. The other good thing is that insiders seem to be retaining their stock options. All the stock purchases were under $12 per share, but then until very recently, this stock has been under $12 since this stock dropped in price at the end of 2008.
The current P/E ratio at 10.7 is quite low. However, the low P/E for this stock seems to have always been quite low. The 5 year average low is just 5.2. The P/E got very low over the past few years, but even looking back further, the low P/E was often 5, 6, 7 and 8. I get a P/E average high of 13.2. However, the P/E high has been the highest ever over the past few years. Over the last 10 years, the P/E high has often been around 9.
When I look at the Graham Price, I get one for 2010 of $17.27. The current price of $13.15 is some 24% below this Graham Price. Looking at the past on this stock, the stock price has often been way below the Graham Price. Over the past 10 years, the stock price has been on average 18% below the Graham Price at market highs and at 57% below the Graham Price at market lows.
When I look at the Price/Book Value Ratio, I find that the current ratio at 1.22 is almost at the 10 year average of 1.24. A good stock price is usually when the current ratio is 80% or less of the 10 year average. The last item to look at is dividend yield. The current yield is 1.9% and the 5 year average is 2.4%. Ideally, the current yield should be higher than the 5 year average. The major reason it is not on this stock is that the dividends have just been cut.
When I look for analysts’ recommendations, I seem to only find one and it is a buy. (See my site for information on analyst ratings.) This stock is not well covered. This stock was really hit hard by the recent recession for it fell from about $30 to $3, which is about a 90% drop in stock price. It has since recovered by 338%, but it is still 57% down from its peak.
It is probably at a relatively good price. Will there be a better price later. This is always hard to say. I think it is a good stock, but a rather risky one, as far as dividend paying stock goes. The dividend was decreased in 2009, so this shows that the management is a bit unsure of the future. However, there is some insider buying which shows some faith in the company by management. Also, just over 50% of the company is owned by the Melton family, which mostly owns this company through Melton Holdings Ltd.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.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.
When I look at insider buying and insider selling, I see that there is only insider buying. This amount to only .28M, but it is a good sign. The other good thing is that insiders seem to be retaining their stock options. All the stock purchases were under $12 per share, but then until very recently, this stock has been under $12 since this stock dropped in price at the end of 2008.
The current P/E ratio at 10.7 is quite low. However, the low P/E for this stock seems to have always been quite low. The 5 year average low is just 5.2. The P/E got very low over the past few years, but even looking back further, the low P/E was often 5, 6, 7 and 8. I get a P/E average high of 13.2. However, the P/E high has been the highest ever over the past few years. Over the last 10 years, the P/E high has often been around 9.
When I look at the Graham Price, I get one for 2010 of $17.27. The current price of $13.15 is some 24% below this Graham Price. Looking at the past on this stock, the stock price has often been way below the Graham Price. Over the past 10 years, the stock price has been on average 18% below the Graham Price at market highs and at 57% below the Graham Price at market lows.
When I look at the Price/Book Value Ratio, I find that the current ratio at 1.22 is almost at the 10 year average of 1.24. A good stock price is usually when the current ratio is 80% or less of the 10 year average. The last item to look at is dividend yield. The current yield is 1.9% and the 5 year average is 2.4%. Ideally, the current yield should be higher than the 5 year average. The major reason it is not on this stock is that the dividends have just been cut.
When I look for analysts’ recommendations, I seem to only find one and it is a buy. (See my site for information on analyst ratings.) This stock is not well covered. This stock was really hit hard by the recent recession for it fell from about $30 to $3, which is about a 90% drop in stock price. It has since recovered by 338%, but it is still 57% down from its peak.
It is probably at a relatively good price. Will there be a better price later. This is always hard to say. I think it is a good stock, but a rather risky one, as far as dividend paying stock goes. The dividend was decreased in 2009, so this shows that the management is a bit unsure of the future. However, there is some insider buying which shows some faith in the company by management. Also, just over 50% of the company is owned by the Melton family, which mostly owns this company through Melton Holdings Ltd.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.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.
Tuesday, May 4, 2010
Melcor Developments Inc
I bought this company (TSX-MRD) in 2008 and because the price really dropped, I picked up a bit more in 2009. My total return on this stock, including dividends is 12.3% per year. However, I have not made any money on the stock I bought in 2008. The reason for the great return is because of my purchase in 2009 at a stock low point. This investment gave me exposure to Western Canada. This stock was on a list of stock for dividend paying growth companies I used to follow, but it is not on the other dividend lists that I follow.
When looking at my spreadsheet on this stock, I see that it has mostly done quite well over the past 5 and 10 year periods. For example, the revenue growth for the last 5 and 10 years are 9.3% and 11.6% per year, respectively. Cash flow growth has also been very good. The cash flow growth for the last 5 and 10 years are 16% and 22% per year, respectively. Good revenue growth and good cash flow growth is what will push good earnings growth in future years.
For the year ending in 2009, I had obtained earning estimate of $.40, but this company earned $.77. This caused the estimate for 2010 to be raised from $.60 to $1.23. However, earnings growth has not been as good as other growth with the 5 and 10 year growth being 4.6% and 12% per year respectively. As you can see the 10 year growth is very good, but the 5 year growth is a little low, but still acceptable.
Dividends are a bit different on this stock. The company declares dividends twice a year, so it is a bit uncertain, exactly what dividends will be received. Until 2009, they had declared progressively higher dividends. In 2009, the dividends declared dropped some 40% from 2008. The growth in dividends, even with this lower dividend for 2009, is quite good. The 5 and 10 year growth in dividends is 15.8% per year and 4.6% per year, respectively. This is good dividend growth, especially, the 5 year growth.
Moving on to the Liquidity Ratio and Asset/Liability Ratio, we find these at very good levels. The Liquidity Ratio is 1.58 and the A/L Ratio is 1.86. Any ratio at 1.50 or above is good. Last year was not a great year for a lot of companies and the Return on Equity for this stock was just 7.1%. However, the 5 year running ROE is 16.9% and this is good.
I am pleased with my investment in this stock. I do not have a lot of it and I will probably buy more in the future.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.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.
When looking at my spreadsheet on this stock, I see that it has mostly done quite well over the past 5 and 10 year periods. For example, the revenue growth for the last 5 and 10 years are 9.3% and 11.6% per year, respectively. Cash flow growth has also been very good. The cash flow growth for the last 5 and 10 years are 16% and 22% per year, respectively. Good revenue growth and good cash flow growth is what will push good earnings growth in future years.
For the year ending in 2009, I had obtained earning estimate of $.40, but this company earned $.77. This caused the estimate for 2010 to be raised from $.60 to $1.23. However, earnings growth has not been as good as other growth with the 5 and 10 year growth being 4.6% and 12% per year respectively. As you can see the 10 year growth is very good, but the 5 year growth is a little low, but still acceptable.
Dividends are a bit different on this stock. The company declares dividends twice a year, so it is a bit uncertain, exactly what dividends will be received. Until 2009, they had declared progressively higher dividends. In 2009, the dividends declared dropped some 40% from 2008. The growth in dividends, even with this lower dividend for 2009, is quite good. The 5 and 10 year growth in dividends is 15.8% per year and 4.6% per year, respectively. This is good dividend growth, especially, the 5 year growth.
Moving on to the Liquidity Ratio and Asset/Liability Ratio, we find these at very good levels. The Liquidity Ratio is 1.58 and the A/L Ratio is 1.86. Any ratio at 1.50 or above is good. Last year was not a great year for a lot of companies and the Return on Equity for this stock was just 7.1%. However, the 5 year running ROE is 16.9% and this is good.
I am pleased with my investment in this stock. I do not have a lot of it and I will probably buy more in the future.
This company is primarily engaged in the acquisition of land for development and sale of residential communities, multi-family sites and commercial sites. It operates mostly in B.C. and Alberta.
The company also develops, owns and manages commercial income properties, as well as two golf courses. Its web site is here Melcor. See my spreadsheet at mrd.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.
Monday, May 3, 2010
IOU by John Lanchester
The full title of this book is IOU: Why Everyone Owes Everyone, and No One Can Pay. Do not take me the wrong way. I think that John Lanchester says some interesting things. However, let’s not mistake him for someone who knows what he is talking about when it comes to finance. The one thing I found most interesting is the change in title between UK’s market and North American’s market.
The UK’s market’s name was IOU: How Capitalism Broke Itself. I am in Canada, and they probably did not change the title for us. We do not matter that much. The change in title is for the US market and it is as I have shown, IOU: Why Everyone Owes Everyone and No One Can Pay. I personally wonder about the title, especially when talking about subprime mortgages. I thought that the whole point about subprime mortgages is that the mortgagor can not pay.
One of my biggest beef about this book is that Lanchester confuses investing and gambling, and also about taking risks and gambling. Sure, you can use the stock market to gamble. You can gamble within a lot of human activities, but investing is not gambling. Placing bets is gambling. Why do I feel this way? Because what I do is investing. I buy shares in real companies that supply goods or services that people want or need to buy. This is what I believe is investing.
However, if you buy stock of a company of which you know nothing about in the hopes that you will make capital gains, I believe that is gambling. There is also a whole lot of gray areas between what I do and those that place bets on stocks. I think that those that buy things they have no understanding of are really gambling and they are just kidding themselves if thing otherwise.
Do I take risks in buying stocks? Of course I do. But we take all sorts of risks, all the time that hardly qualifies as gambling. Crossing the street is taking a risk. Putting money in something “safe” like a bank account is also “taking a risk”. Maybe this is not as risky as investing, but still a risk. In fact, putting money under your mattress is also taking a risk.
John Lancaster talks about the recent boom and bust. However, this has been going on forever. I have been investing since the 70’s and the stock market has not been tame all along until now. Believe, as I have been invested all this time. There have been lots of booms and busts. I believe this is called the business cycle. No matter what we want, we do not seem capable of taming the business Cycle.
I think that taming the business cycle is a big socialist fantasy. Anyone who has tried to seems to just get rid of the booms. The busts always seem to come around. Economic decline seems to be to be one bust after another. I you read history as I do, booms and busts have been around a very long time. Before the industrial revolution and we were all working on the land, there were good years and bad years - booms and busts. I remember as a child reading a bible story about Egypt where someone said that they would have 7 good years followed by 7 bands years. The idea was to save in the good years to help them through the bad years.
This is no different from what we should do now. When times are good, we should save for future bad times. We do not need to go to extremes, but we do need to put something aside for the future. We should not exhaust all we get and expect good times to last forever. I think that is why the busts are so hard for some people. The have created no reserves. Both the government and people need to act more sensibly. Then, perhaps, the bad times will not be so hard.
There is a Wikipedia page about John Lanchester, see Wikipedia. If you want a regular time book review, see Globe and Mail. See John Lanchester on YouTube.
On my website is how to find this book on Amazon if you care to purchase it. See Lanchester. 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 for stocks followed and investment notes. Follow me on twitter.
The UK’s market’s name was IOU: How Capitalism Broke Itself. I am in Canada, and they probably did not change the title for us. We do not matter that much. The change in title is for the US market and it is as I have shown, IOU: Why Everyone Owes Everyone and No One Can Pay. I personally wonder about the title, especially when talking about subprime mortgages. I thought that the whole point about subprime mortgages is that the mortgagor can not pay.
One of my biggest beef about this book is that Lanchester confuses investing and gambling, and also about taking risks and gambling. Sure, you can use the stock market to gamble. You can gamble within a lot of human activities, but investing is not gambling. Placing bets is gambling. Why do I feel this way? Because what I do is investing. I buy shares in real companies that supply goods or services that people want or need to buy. This is what I believe is investing.
However, if you buy stock of a company of which you know nothing about in the hopes that you will make capital gains, I believe that is gambling. There is also a whole lot of gray areas between what I do and those that place bets on stocks. I think that those that buy things they have no understanding of are really gambling and they are just kidding themselves if thing otherwise.
Do I take risks in buying stocks? Of course I do. But we take all sorts of risks, all the time that hardly qualifies as gambling. Crossing the street is taking a risk. Putting money in something “safe” like a bank account is also “taking a risk”. Maybe this is not as risky as investing, but still a risk. In fact, putting money under your mattress is also taking a risk.
John Lancaster talks about the recent boom and bust. However, this has been going on forever. I have been investing since the 70’s and the stock market has not been tame all along until now. Believe, as I have been invested all this time. There have been lots of booms and busts. I believe this is called the business cycle. No matter what we want, we do not seem capable of taming the business Cycle.
I think that taming the business cycle is a big socialist fantasy. Anyone who has tried to seems to just get rid of the booms. The busts always seem to come around. Economic decline seems to be to be one bust after another. I you read history as I do, booms and busts have been around a very long time. Before the industrial revolution and we were all working on the land, there were good years and bad years - booms and busts. I remember as a child reading a bible story about Egypt where someone said that they would have 7 good years followed by 7 bands years. The idea was to save in the good years to help them through the bad years.
This is no different from what we should do now. When times are good, we should save for future bad times. We do not need to go to extremes, but we do need to put something aside for the future. We should not exhaust all we get and expect good times to last forever. I think that is why the busts are so hard for some people. The have created no reserves. Both the government and people need to act more sensibly. Then, perhaps, the bad times will not be so hard.
There is a Wikipedia page about John Lanchester, see Wikipedia. If you want a regular time book review, see Globe and Mail. See John Lanchester on YouTube.
On my website is how to find this book on Amazon if you care to purchase it. See Lanchester. 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 for stocks followed and investment notes. Follow me on twitter.
Saturday, May 1, 2010
Manulife Financial Corp 2
Today, I would like to continue to talk about Manulife Financial Corp (TSX-MFC, NYSE-MFC). I bought this stock in 2005 and 2006, with a bit more purchased in 2009. I have made a negative return, including dividends of -6.8%.
Looking at the Insider Buying and Insider Selling reports, it would appear that everyone, but the directors, have lots more options and shares. There has been a bit of insider buying and a bit more of insider selling for this stock. None of this amounts to much, but there was $.3M net selling over the past year, all by directors.
When I look at the P/E ratio, I find the 5 year average low to be 13 and the 5 year average high to be 20.6. The current P/E ratio that I have, based on earnings estimates for 2010 is 10.4. This is lower than the 5 year average low and it is a low P/E ratio. Looking at the Graham Price, I get one of $26.44 for 2010. This Graham Price is some 26% above the current stock price of $19.60. Both this factors show a current good stock price. Commenting on the Graham Price, this stock is not often at or below the Graham Price.
Moving on to the Price/Book Value Ratio, the current ratio of 1.19 is just 57% of the 5 year average of 2.09. This also shows a good current price. The last item to look at is the yield. The current yield is 2.7% compared to a 5 year average of 2.8%. Of course, the thing to note is that the dividend payments have recently been lowered almost 50%. So, all this seems to show a good current price.
When I look at what the analysts say, I find recommendations of Strong Buy, Buy and Hold. (See my site for information on analyst ratings.) Even the analysts with Hold ratings on this stock say that it has good long term potential. They just do not think that anything will happen in the short term. Some are also worried that the first quarterly earnings reporting that is due soon will not be great. The analysts with Buy and Strong Buy recommendations feel that this company will recover very nicely and produce a good long term return.
Since I buy for the long term, I will currently be holding on to what shares I own. I probably will not buy anymore as I feel I have enough of this stock already.
This is a life insurance company in the financial services business. It offers financial protection products (e.g. Life Insurance) and wealth management services (i.e. segregated funds, mutual funds and pension products). They sell products to individuals and business. They are an international company, selling in Canada, US and Asia. This company is listed on Canadian, US, Hong Kong and Philippines Stock Exchanges. Its web site is www.manulife.com. See my spreadsheet at www.spbrunner.com/stocks/mfc.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.
Looking at the Insider Buying and Insider Selling reports, it would appear that everyone, but the directors, have lots more options and shares. There has been a bit of insider buying and a bit more of insider selling for this stock. None of this amounts to much, but there was $.3M net selling over the past year, all by directors.
When I look at the P/E ratio, I find the 5 year average low to be 13 and the 5 year average high to be 20.6. The current P/E ratio that I have, based on earnings estimates for 2010 is 10.4. This is lower than the 5 year average low and it is a low P/E ratio. Looking at the Graham Price, I get one of $26.44 for 2010. This Graham Price is some 26% above the current stock price of $19.60. Both this factors show a current good stock price. Commenting on the Graham Price, this stock is not often at or below the Graham Price.
Moving on to the Price/Book Value Ratio, the current ratio of 1.19 is just 57% of the 5 year average of 2.09. This also shows a good current price. The last item to look at is the yield. The current yield is 2.7% compared to a 5 year average of 2.8%. Of course, the thing to note is that the dividend payments have recently been lowered almost 50%. So, all this seems to show a good current price.
When I look at what the analysts say, I find recommendations of Strong Buy, Buy and Hold. (See my site for information on analyst ratings.) Even the analysts with Hold ratings on this stock say that it has good long term potential. They just do not think that anything will happen in the short term. Some are also worried that the first quarterly earnings reporting that is due soon will not be great. The analysts with Buy and Strong Buy recommendations feel that this company will recover very nicely and produce a good long term return.
Since I buy for the long term, I will currently be holding on to what shares I own. I probably will not buy anymore as I feel I have enough of this stock already.
This is a life insurance company in the financial services business. It offers financial protection products (e.g. Life Insurance) and wealth management services (i.e. segregated funds, mutual funds and pension products). They sell products to individuals and business. They are an international company, selling in Canada, US and Asia. This company is listed on Canadian, US, Hong Kong and Philippines Stock Exchanges. Its web site is www.manulife.com. See my spreadsheet at www.spbrunner.com/stocks/mfc.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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