Friday, August 27, 2010

Astral Media Inc 2

I never owned this stock (TSX-ACM.A). This is a Canadian Media company that people buy for growth and some dividend income. They have raised their dividends in the past, but generally infrequently and they keep it to a low percentage of their cash flow. If you want to diversity your portfolio into consumer type stock, this stock may be what you are looking for.

Over the past year, there has been some $10M insider selling. This is about ½ of 1% of the outstanding shares. Except for directors, insiders have more stock options than actual shares in the company. Not what I like to see, but it is quite common nowadays.

The 5 year low median P/E ratio is 12.9 and the 5 year high median P/E ratio is 16.6. This puts the current P/E ratio at 12.2 in a good light. Also, I get a current Graham Price of $39.20, so the current stock price of $35.91 looks good as it over 8% lower. The other thing pointing to a good current price is Price/Book Value Ratio. The 10 year average is 1.88 and the current P/B ratio is over 80% lower at 1.55. The last item to look at, which also shows a good current stock price is the dividend yield. The current yield of 1.4% is greater than the 5 year average of 1.2% and the 10 year average low, also at 1.2%.

There are a number of analysts following this stock. It is felt that the company has strong management and a strong balance. When I look at recommendations, I find lots of Strong Buy and lots of Hold, and a few Buy recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.)

Although this stock is not on the dividend lists that I follow, it does have a habit of raising their dividends as they can afford to do so. The reason they are not on dividend lists is because they do not consistently raise their dividends. This does stop this stock from being recognized by analysts as a good dividend paying stock. If you want to diversity into any consumer type stocks, you might want to consider this one as the price is currently very good on a number of measures.

Astral Media is a leading Canadian media company, reaching people through a combination of highly targeted media properties in television, radio, outdoor advertising, and interactive media. The company operates some 20 TV channels and 83 ratio stations across 8 provinces and 100 websites. They focus on specialty and pay television radio, outdoor advertising and interactive media. Ownership: 63% by Greenberg family. Substantial shares owned by Paul Bronfman. Its web site is here Astral Media. See my spreadsheet at acm.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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