I thought today I would talk about the Graham Price or Graham Number as there has been questions about this item. This is based on the principles of Benjamin Graham and it is meant to be used to calculate the maximum price you should pay for a stock. The Dividends Matters website has a tutorial on this subject.
Benjamin Graham wrote a book called The Intelligent Investor and this book is considered to be a classic investment book. On my website, you can find out how to order this book on Amazon if you care to purchase it. See Graham. Also, this book review and other books I have reviewed are on my website at Book Reviews. Benjamin Graham has an entry on Wikipedia. There is also a good review of this book at Motley Fool website.
Why do I look at this number? I want to be able to figure out what a decent price is to pay for a stock. To this end, I not only look at the Graham Number, but also P/E (price/earnings) ratios, P/B (Price/Book Value) ratios and dividend yield. That is why I look at the current ratios, the dividend yield and the Graham Price and compare them to 5 and 10 year averages.
Having invested for many years, I doubt if you can do better than pay a rather average price for a stock. What I am trying to prevent is over paying for a stock. What I have found is that if you over pay for a stock, the dividend yield that you get over the long term can be affected. If you do this too much, I am sure your portfolio will also suffer.
The formula I use is the square root of (22.5 X EPS X BVPS), where EPS is earnings per share and BVPS is Book Value per share. When I am calculating the current Graham Price, I simply use in my formula, the estimate earnings for the current year and the current book value (all from my spreadsheet).
For other years, in the Graham Prices on my spreadsheet I use the diluted reported earnings per share. There is some controversy about what you should use. Some think that you should use net earnings divided by the outstanding shares. I find mostly that there is not much difference and I want a quick and easy way to get a value to match against the current price.
Some site talks about the NCAV (or net current asset value) and have a formula for that, but I do not use this figure. For a discussion on this aspect of Graham’s way of investing, see Daniel Libeskind’s site.
I am not the only blogger who talks about Graham’s methods for valuing stocks. See Stingy Investor’s blog. See Dividend Matters site again for how a company such as Saputo (TSX-SAP) is valued. Also, see the Div-Net site on how they use the Graham Price in valuing Lowes Company (NYSE-LOW). There is also the Tipblog.in site that explains how they use Benjamin Graham Number to determine a fair price to pay for a stock.
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, September 30, 2010
Wednesday, September 29, 2010
Consumers' Waterheater Inc Fund 2
I do not own this stock (TSX-CWI.UN). I started to follow it a few years ago because income trusts were are hot investment idea. In the end, I decided that I rather stick with dividend paying stock. However, I did buy a few income trust, the main one being Pembina Pipelines (TSX-PIF.UN). As are most income trust, Consumers will be converting to a corporation by 2011. They have already cut their dividend payouts in half in anticipation of this.
There is an interesting report on this stock from Contra the Heard. See money show. Contra the Heard tend to be aggressive and rather short term in their investments. I am not saying you should not take their advice seriously, because you should. They are serious investors. They just have a very different style than I have. Another blogger, called Dividend Girl has bought this stock and is pleased with it.
The first thing I like to look when evaluating a stock is Insider Trading. For this company there is a bit more insider selling than insider buying, but both are for very small amounts. We therefore learn nothing here.
For this stock, it is hard to gauge if the current stock price is a good one or not. First, I will talk about the P/E ratio. Since this company’s estimated earnings are expected to be way below what they have been in the past, the current P/E is at 100.8. But this is meaningless if the earnings for 2010 are abnormally low, and earnings will recover. Many analysts feel that earnings will recover.
However, what we can do is look at the trailing P/E Ratio. The trailing P/E ratio uses last year’s earnings. The trailing P/E ratio is 11.5 and this is not a bad ratio. The other thing is to use is the last 12 months earnings in the P/E ratio, which are earnings from Q3 and Q4 of 2009 and Q1 and Q2 of 2010. This gives us earnings of $0.25 and a P/E of 20. A P/E of 20 is high, but not excessive.
With the Graham Price, I get one of $2.00 mainly because earnings for 2010 are expected to be so low. However, the Graham Price has no been below $5.00 before and the one for 2011, because of better earnings is expected to be $4.00. The current yield is very good at 12.9% even after the recent cut in dividends. However, if you read about value investing, you are always warned to not chase dividends. Yields are often very high for good reasons, and usually it is because a company is in financial difficulties. An interesting point on this yield is that the current yield is still higher than the 5 year average for this stock, which is 10.9%.
Surprisingly, the Price/Book Value ratio is not a bad indicator on this stock. The stock is trading at only 1.42 times book value. At a P/B ratio of 1.42, this company is trading at a ratio that is only some 60% of the 7 year average of 2.02. The one good thing under this stock is that for the first time ever, the Book Value increased about 6.5% from the end of 2009 to Q2 2010.
Another thing you might want to check is the Beta number for this stock. This number tells you how well a stock will do comparable to the market. The market has a Beta of 1.00 and if a stock will do better than the market the Beta number will be higher than 1.00. If the stock will do worse than the market, then the Beta number is less than 1.00. The Globe and Mail gives this stock a Beta number of 0.26. See Globe and Mail. For an explanation of Beta, you can look at Investopedia.
The negative thing that analysts say about this stock is that they have had a hard time retaining customers. A few remark that this company, like a lot of income trusts, had an unsustainable payout ratio and that the current payout in dividends is now sustainable. Of the analysts giving recommendations on this stock, I find a couple of Hold and 1 Sell recommendation. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.)
Currently, I plan to continue to track this stock. I find it interesting to see how some of the income trusts will do as corporations.
Consumers' Waterheater Income Fund owns a portfolio of waterheaters and other portfolio assets, which they rent to primarily residential customers. They rent out waterheaters in the GTA and southern Ontario and it is considered a Business Trust. Its web site is here Consumers. See my spreadsheet at cwi.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.
There is an interesting report on this stock from Contra the Heard. See money show. Contra the Heard tend to be aggressive and rather short term in their investments. I am not saying you should not take their advice seriously, because you should. They are serious investors. They just have a very different style than I have. Another blogger, called Dividend Girl has bought this stock and is pleased with it.
The first thing I like to look when evaluating a stock is Insider Trading. For this company there is a bit more insider selling than insider buying, but both are for very small amounts. We therefore learn nothing here.
For this stock, it is hard to gauge if the current stock price is a good one or not. First, I will talk about the P/E ratio. Since this company’s estimated earnings are expected to be way below what they have been in the past, the current P/E is at 100.8. But this is meaningless if the earnings for 2010 are abnormally low, and earnings will recover. Many analysts feel that earnings will recover.
However, what we can do is look at the trailing P/E Ratio. The trailing P/E ratio uses last year’s earnings. The trailing P/E ratio is 11.5 and this is not a bad ratio. The other thing is to use is the last 12 months earnings in the P/E ratio, which are earnings from Q3 and Q4 of 2009 and Q1 and Q2 of 2010. This gives us earnings of $0.25 and a P/E of 20. A P/E of 20 is high, but not excessive.
With the Graham Price, I get one of $2.00 mainly because earnings for 2010 are expected to be so low. However, the Graham Price has no been below $5.00 before and the one for 2011, because of better earnings is expected to be $4.00. The current yield is very good at 12.9% even after the recent cut in dividends. However, if you read about value investing, you are always warned to not chase dividends. Yields are often very high for good reasons, and usually it is because a company is in financial difficulties. An interesting point on this yield is that the current yield is still higher than the 5 year average for this stock, which is 10.9%.
Surprisingly, the Price/Book Value ratio is not a bad indicator on this stock. The stock is trading at only 1.42 times book value. At a P/B ratio of 1.42, this company is trading at a ratio that is only some 60% of the 7 year average of 2.02. The one good thing under this stock is that for the first time ever, the Book Value increased about 6.5% from the end of 2009 to Q2 2010.
Another thing you might want to check is the Beta number for this stock. This number tells you how well a stock will do comparable to the market. The market has a Beta of 1.00 and if a stock will do better than the market the Beta number will be higher than 1.00. If the stock will do worse than the market, then the Beta number is less than 1.00. The Globe and Mail gives this stock a Beta number of 0.26. See Globe and Mail. For an explanation of Beta, you can look at Investopedia.
The negative thing that analysts say about this stock is that they have had a hard time retaining customers. A few remark that this company, like a lot of income trusts, had an unsustainable payout ratio and that the current payout in dividends is now sustainable. Of the analysts giving recommendations on this stock, I find a couple of Hold and 1 Sell recommendation. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.)
Currently, I plan to continue to track this stock. I find it interesting to see how some of the income trusts will do as corporations.
Consumers' Waterheater Income Fund owns a portfolio of waterheaters and other portfolio assets, which they rent to primarily residential customers. They rent out waterheaters in the GTA and southern Ontario and it is considered a Business Trust. Its web site is here Consumers. See my spreadsheet at cwi.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, September 28, 2010
Consumers' Waterheater Inc Fund
I do not own this stock (TSX-CWI.UN). I started to follow it a few years ago because income trusts were are hot investment idea. In the end, I decided that I rather stick with dividend paying stock. However, I did buy a few income trust, the main one being Pembina Pipelines (TSX-PIF.UN). As are most income trust, Consumers will be converting to a corporation by 2011. They have already cut their dividend payouts in half in anticipation of this.
Their cut in dividend is not an uncommon move for stock converting to corporations. All the income trust companies will have to ensure that they distribute a reason percentage of their cash flow. The company had been paying out about 50% of their cash flow. This is a little high. It is anticipated that the dividend payout ratio from CF will decrease to a better ratio of around 30% for this year. Another problem with this stock is that it is not expected to earn much this year and next. Some analyst even think that the company will have loses over the next two years. Others are more hopeful.
In the growth area, this company has done not badly over the past 10 years, but the 5 year figures are not good. I think that being in a recession only partly explains the company’s problems. Also, the one big reason why I did not like income trusts were their lack of ability to grow their book value. This stock was particularly bad in this area. The book value has a negative growth of 14% per year. I can find no year where the book value grew.
The growth in stock price was flat then steadily downward over the past 5 years. Investors would not have made much in total return. Over the last 5 years, what you might have made in distributions was all lost in big capital losses. The company had a habit of increasing their distributions over until 2009 and it will be interesting to see if they will do that again.
The company growth in revenue seems to be the best. The growth in revenue over the last 5 and 10 years is 5.7% and 25% per year, respectively. It is hopeful that they can grow revenue. However, I think they will have to do a better job if their company is to be a good investment. There is an interesting news item on CBC about door to door salesman in the rental Water heaters business. See CBC Canada.
The Liquidity Ratio for this company has recently improved from a dismal 0.16 to a great 2.49. This is because they have been able to get a loan to cover the majority of their current debt. They also got a revolving credit facility. The Asset/Liability Ratio is still quite low at 1.22. I would rather see this at 1.50.
Some people feel this will become an interesting investment in the future and I will continue to track it. Tomorrow, I will talk about what the analysts have to say on this stock.
Consumers' Waterheater Income Fund owns a portfolio of waterheaters and other portfolio assets, which they rent to primarily residential customers. They rent out waterheaters in the GTA and southern Ontario and it is considered a Business Trust. Its web site is here Consumers. See my spreadsheet at cwi.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.
Their cut in dividend is not an uncommon move for stock converting to corporations. All the income trust companies will have to ensure that they distribute a reason percentage of their cash flow. The company had been paying out about 50% of their cash flow. This is a little high. It is anticipated that the dividend payout ratio from CF will decrease to a better ratio of around 30% for this year. Another problem with this stock is that it is not expected to earn much this year and next. Some analyst even think that the company will have loses over the next two years. Others are more hopeful.
In the growth area, this company has done not badly over the past 10 years, but the 5 year figures are not good. I think that being in a recession only partly explains the company’s problems. Also, the one big reason why I did not like income trusts were their lack of ability to grow their book value. This stock was particularly bad in this area. The book value has a negative growth of 14% per year. I can find no year where the book value grew.
The growth in stock price was flat then steadily downward over the past 5 years. Investors would not have made much in total return. Over the last 5 years, what you might have made in distributions was all lost in big capital losses. The company had a habit of increasing their distributions over until 2009 and it will be interesting to see if they will do that again.
The company growth in revenue seems to be the best. The growth in revenue over the last 5 and 10 years is 5.7% and 25% per year, respectively. It is hopeful that they can grow revenue. However, I think they will have to do a better job if their company is to be a good investment. There is an interesting news item on CBC about door to door salesman in the rental Water heaters business. See CBC Canada.
The Liquidity Ratio for this company has recently improved from a dismal 0.16 to a great 2.49. This is because they have been able to get a loan to cover the majority of their current debt. They also got a revolving credit facility. The Asset/Liability Ratio is still quite low at 1.22. I would rather see this at 1.50.
Some people feel this will become an interesting investment in the future and I will continue to track it. Tomorrow, I will talk about what the analysts have to say on this stock.
Consumers' Waterheater Income Fund owns a portfolio of waterheaters and other portfolio assets, which they rent to primarily residential customers. They rent out waterheaters in the GTA and southern Ontario and it is considered a Business Trust. Its web site is here Consumers. See my spreadsheet at cwi.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, September 27, 2010
TransCanada Corp 2
I own this stock (TSX-TRP). I first bought this stock in February 2000, and purchased more in 2006. To date, I have made a total return on this stock of 11.6% per year. They on the dividend lists that I follow and this is the sort of stock you want to buy when starting a portfolio, see Setting Up A portfolio.
There is an entry on Wikipedia for this stock. There is a recent article on pipelines in Reuters. Also see Equedia site for some analysts talking about this company. Analysts interviewed are David Baskin, John Stephenson and Andrew McCreath earlier this year. See also an interview by MacLeans magazine of TransCanada Corp.’s CEO, Russ Girling.
In the Insider Trading report, we find that there has been some $30M of insider selling. Company insiders get a lot of their compensation in options. This sell off is about .1% of the total market capital of this company. The actual number of shares insider hold in this company has not really changed over the past year. Also, Hal Kvisle has just retired (September 2010) from the President and CEO position of this company.
The 5 year median low P/E Ratio is 13.8 and the 5 year median high P/E Ratio is 17.2. This puts the current P/E ratio of 18.8 on the high side. However, earnings are not expected to be strong this year, so this causes the P/E ratio to be high. Earnings are expected to be better next year, and the forward P/E is a better 15.6. I get a Graham Price of $33.22. The current price of 38.16 is some 15% higher. Generally, for this stock the stock price is lower than the Graham Price is at some point during the year. However, on average the stock price is 25% above the graham price during the year.
When looking at the Dividend Yield, I get a current one of 4.2% and a 5 year average of 3.9%. So, this shows a relatively good stock price. Some people feel that the best way of judging the stock price on dividend paying stock is just using the dividend yield. If you look at my spreadsheet on any stock, you will get 10 years of data. You can use your cursor to highlight any dividend line of data showing the yield on high, low and average stock prices. This could be a quick way of judging the current stock price of a stock you are looking to purchase.
Another good way to judge a stock is using the Price/Book Value ratio. The 10 year average P/B ratio is 1.95 and the current P/B ratio is just 1.58. That is just 80% of the 10 year average and this point to a very good stock price. As with the Dividend Yield, when you use the P/B ratio to judge the current stock price you are not using any estimates.
The other advantage of both the Dividend Yield and P/B ratio is that you are also not using earnings. Earnings can fluctuate a lot more than Book Value or Dividends. Earnings can be depressed in a recession and quite high when the economy expands. At both these times, the P/E ratio or the Graham Price might not be a good way to tell how good the current stock price is.
So what do the analysts say? There are a lot of Strong Buy recommendations, fewer Buy recommendations and then some Hold recommendations. The consensus maybe a toss up between Strong Buy and Buy, but is probably narrowly in the Buy area. (See my site for information on analyst ratings.) Analysts talk about it good yield and its increasing dividend and cash flows. It is recommended as a long term buy.
I, of course, will continue to hold my shares and track this company. I will not be buying any more as I have enough of it in my portfolio.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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.
There is an entry on Wikipedia for this stock. There is a recent article on pipelines in Reuters. Also see Equedia site for some analysts talking about this company. Analysts interviewed are David Baskin, John Stephenson and Andrew McCreath earlier this year. See also an interview by MacLeans magazine of TransCanada Corp.’s CEO, Russ Girling.
In the Insider Trading report, we find that there has been some $30M of insider selling. Company insiders get a lot of their compensation in options. This sell off is about .1% of the total market capital of this company. The actual number of shares insider hold in this company has not really changed over the past year. Also, Hal Kvisle has just retired (September 2010) from the President and CEO position of this company.
The 5 year median low P/E Ratio is 13.8 and the 5 year median high P/E Ratio is 17.2. This puts the current P/E ratio of 18.8 on the high side. However, earnings are not expected to be strong this year, so this causes the P/E ratio to be high. Earnings are expected to be better next year, and the forward P/E is a better 15.6. I get a Graham Price of $33.22. The current price of 38.16 is some 15% higher. Generally, for this stock the stock price is lower than the Graham Price is at some point during the year. However, on average the stock price is 25% above the graham price during the year.
When looking at the Dividend Yield, I get a current one of 4.2% and a 5 year average of 3.9%. So, this shows a relatively good stock price. Some people feel that the best way of judging the stock price on dividend paying stock is just using the dividend yield. If you look at my spreadsheet on any stock, you will get 10 years of data. You can use your cursor to highlight any dividend line of data showing the yield on high, low and average stock prices. This could be a quick way of judging the current stock price of a stock you are looking to purchase.
Another good way to judge a stock is using the Price/Book Value ratio. The 10 year average P/B ratio is 1.95 and the current P/B ratio is just 1.58. That is just 80% of the 10 year average and this point to a very good stock price. As with the Dividend Yield, when you use the P/B ratio to judge the current stock price you are not using any estimates.
The other advantage of both the Dividend Yield and P/B ratio is that you are also not using earnings. Earnings can fluctuate a lot more than Book Value or Dividends. Earnings can be depressed in a recession and quite high when the economy expands. At both these times, the P/E ratio or the Graham Price might not be a good way to tell how good the current stock price is.
So what do the analysts say? There are a lot of Strong Buy recommendations, fewer Buy recommendations and then some Hold recommendations. The consensus maybe a toss up between Strong Buy and Buy, but is probably narrowly in the Buy area. (See my site for information on analyst ratings.) Analysts talk about it good yield and its increasing dividend and cash flows. It is recommended as a long term buy.
I, of course, will continue to hold my shares and track this company. I will not be buying any more as I have enough of it in my portfolio.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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, September 24, 2010
TransCanada Corp
I own this stock (TSX-TRP). I first bought this stock in February 2000, and purchased more in 2006. To date, I have made a total return on this stock of 11.6% per year. They on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). This is the sort of stock you want to buy when starting a portfolio, see Setting Up A portfolio.
This is great utility stock. The total return over the last 5 years has not been as good as my average yearly return as we are in recession. The dividend portion of the return averages between 4 and 5%. The 5 year average dividend yield is 3.9% and this is a good yield. I have just been reading a review of a book called “The Little Book of Big Dividends”. One thing the author says is that you should look at what a stock will be paying you in 5or 10 years time. This is the dividend growth potential of a stock.
This book is by Charles B. Carlson. Read about him at Carlson. Unfortunately, I was reading this review in a newspaper and I cannot find the same review on line. There is a good review of this book at Amazon. Unfortunately, this review does not cover dividend growth potential of a stock, but the reviewer still makes some good points on investing in dividend paying stock.
Now, let’s get back to dividend growth potential. For this stock, the current yield on the stock price of $38.16 is 4.2%. If we assume that the dividends will grow the same as they have for the past 5 years that is at a compound rate of 5.3% then the dividend yield would be 5.5% in 5 years and 7% in 10 years. According to the review, Carlson says you should look at a stock’s dividend growth potential as well as the current size of the stock’s dividend yield.
The reason to buy utility stocks is that they tend to hold their value. They will not soar with the market, nor will they lose as much. We are in a recession, so you will not find good growth rates in revenue, or in earnings and cash flows. Utilities tend to payout a reasonable portion of their cash flow, which this stock is doing. The best growth rates are in book value and for the last 5 and 10 years, this has grown 11 and 8.3% per year.
Utilities tend to have lots of debt because of acquisitions and capital expenditures. This is normal with utilities. You will always want to look to see if they have any problems rolling over their debt. The Liquidity ratio is seldom great on utility stock, as it is in this case, which is at 0.64. The Asset/Liability Ratio is much better at 1.63.
The current 5 year average Return on Equity is 10.5% and this is a good figures. It has been coming down recently. The ROE at the end of 2009 was 8.7%. For the first 2 quarters of 2010, it is lower at 7.2%. However, you would expect this to come down in a recession.
I will continue to hold this stock and track it. On Monday, I will look and see what analysts say about it.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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.
This is great utility stock. The total return over the last 5 years has not been as good as my average yearly return as we are in recession. The dividend portion of the return averages between 4 and 5%. The 5 year average dividend yield is 3.9% and this is a good yield. I have just been reading a review of a book called “The Little Book of Big Dividends”. One thing the author says is that you should look at what a stock will be paying you in 5or 10 years time. This is the dividend growth potential of a stock.
This book is by Charles B. Carlson. Read about him at Carlson. Unfortunately, I was reading this review in a newspaper and I cannot find the same review on line. There is a good review of this book at Amazon. Unfortunately, this review does not cover dividend growth potential of a stock, but the reviewer still makes some good points on investing in dividend paying stock.
Now, let’s get back to dividend growth potential. For this stock, the current yield on the stock price of $38.16 is 4.2%. If we assume that the dividends will grow the same as they have for the past 5 years that is at a compound rate of 5.3% then the dividend yield would be 5.5% in 5 years and 7% in 10 years. According to the review, Carlson says you should look at a stock’s dividend growth potential as well as the current size of the stock’s dividend yield.
The reason to buy utility stocks is that they tend to hold their value. They will not soar with the market, nor will they lose as much. We are in a recession, so you will not find good growth rates in revenue, or in earnings and cash flows. Utilities tend to payout a reasonable portion of their cash flow, which this stock is doing. The best growth rates are in book value and for the last 5 and 10 years, this has grown 11 and 8.3% per year.
Utilities tend to have lots of debt because of acquisitions and capital expenditures. This is normal with utilities. You will always want to look to see if they have any problems rolling over their debt. The Liquidity ratio is seldom great on utility stock, as it is in this case, which is at 0.64. The Asset/Liability Ratio is much better at 1.63.
The current 5 year average Return on Equity is 10.5% and this is a good figures. It has been coming down recently. The ROE at the end of 2009 was 8.7%. For the first 2 quarters of 2010, it is lower at 7.2%. However, you would expect this to come down in a recession.
I will continue to hold this stock and track it. On Monday, I will look and see what analysts say about it.
TransCanada is a leader in energy infrastructure. Their network of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services. It is a growing independent power producer. Its web site is here TransCanada. See my spreadsheet at trp.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, September 23, 2010
Cinram Intl Inc 2
I do not currently own this stock (TSX-CRW.UN). However, I did own stock in this company from February 2000 to Jun 2007 and I made a return of 19% per year. This is a company in manufacturing, and it has a habit of reinventing itself. It has manufactured the different mediums that we have used over the years to record music and films etc (that is home entertainment). It started with 8-track and cassette tapes and has is currently manufacturing CDs and DVDs. It might just reinvent itself again.
One thing that this company strongly points out is the peril of investing in companies that have a few big clients. When Warner Home Video ended their relationship to this company, the shares price took a 60% pounding. See articles in the Canoe, Globe and Mail and Toronto Star, . With severed relationship, Cinram lost about 30% of its revenue. The moral here is to be very careful when investing in a company with a few big clients.
The other interesting thing about this episode is the amount of insider buying was $10M before this happen and no insider buying since. I must admit, there is no insider selling neither, and maybe this could be interpreted as a good sign. A lot of the insider buying took place in November of 2009, when the stock price fell, as most stocks do, in the fall. Almost all the buying was by one director, who now owns 12% of this business. Two other directors own just over 3% each. Also, Clarke Inc, an investment company owns just about 15% of the company. (See their website at Clarke Inc.)
The company has no P/E ratio, as it has made no money over the last few years and it is not expected to make anything over the next 2 years. The dividends have been stopped, so there is no dividend yield. I cannot calculate a Graham Price, as the earnings and book value are negative. There is also no way to calculate the Price/Book Value Ratio as the book value is negative.
So, what do the analysts say? There are few analysts following this stock, and what I get is Hold, Underperform and Sell recommendations. The consensus would be an Underperform. (See my site for information on analyst ratings.) I must admit, I have seen far worse recommendations than this. However, this company still has business in Canada, US and Europe and had $255,000 of revenue in the 2nd quarter.
Perhaps the company will make a recovery. The analyst ratings certainly imply some hope. I think the one most important thing is for it to be able to finance its debts. In any event, I will continue to track this company. Tomorrow, I will be looking at TransCanada Corp. This is a utility and one of my favorites.
Cinram is the world's largest provider of pre-recorded optical discs and related logistics services for leading motion picture studios, music labels, publishers and computer software companies. Cinram also provides distribution and logistics services to the telecommunications industry in North America and Europe through its wireless subsidiaries. Their major customers include New Line Home Entertainment, Twentieth Century Fox Home Entertainment (Fox), Metro-Goldwyn-Mayer Home Entertainment (MGM), Artisan Entertainment/Lions Gate, Alliance Atlantis and EMI Group plc (EMI). Its web site is here Cinram. See my spreadsheet at crw.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.
One thing that this company strongly points out is the peril of investing in companies that have a few big clients. When Warner Home Video ended their relationship to this company, the shares price took a 60% pounding. See articles in the Canoe, Globe and Mail and Toronto Star, . With severed relationship, Cinram lost about 30% of its revenue. The moral here is to be very careful when investing in a company with a few big clients.
The other interesting thing about this episode is the amount of insider buying was $10M before this happen and no insider buying since. I must admit, there is no insider selling neither, and maybe this could be interpreted as a good sign. A lot of the insider buying took place in November of 2009, when the stock price fell, as most stocks do, in the fall. Almost all the buying was by one director, who now owns 12% of this business. Two other directors own just over 3% each. Also, Clarke Inc, an investment company owns just about 15% of the company. (See their website at Clarke Inc.)
The company has no P/E ratio, as it has made no money over the last few years and it is not expected to make anything over the next 2 years. The dividends have been stopped, so there is no dividend yield. I cannot calculate a Graham Price, as the earnings and book value are negative. There is also no way to calculate the Price/Book Value Ratio as the book value is negative.
So, what do the analysts say? There are few analysts following this stock, and what I get is Hold, Underperform and Sell recommendations. The consensus would be an Underperform. (See my site for information on analyst ratings.) I must admit, I have seen far worse recommendations than this. However, this company still has business in Canada, US and Europe and had $255,000 of revenue in the 2nd quarter.
Perhaps the company will make a recovery. The analyst ratings certainly imply some hope. I think the one most important thing is for it to be able to finance its debts. In any event, I will continue to track this company. Tomorrow, I will be looking at TransCanada Corp. This is a utility and one of my favorites.
Cinram is the world's largest provider of pre-recorded optical discs and related logistics services for leading motion picture studios, music labels, publishers and computer software companies. Cinram also provides distribution and logistics services to the telecommunications industry in North America and Europe through its wireless subsidiaries. Their major customers include New Line Home Entertainment, Twentieth Century Fox Home Entertainment (Fox), Metro-Goldwyn-Mayer Home Entertainment (MGM), Artisan Entertainment/Lions Gate, Alliance Atlantis and EMI Group plc (EMI). Its web site is here Cinram. See my spreadsheet at crw.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, September 22, 2010
Cinram Intl Inc
I do not currently own this stock (TSX-CRW.UN). However, I did own stock in this company from February 2000 to Jun 2007 and I made a return of 19% per year. This is a company in manufacturing, and it has a habit of reinventing itself. It has manufactured the different mediums that we have used over the years to record music and films etc (that is home entertainment). It started with 8-track and cassette tapes and has is currently manufacturing CDs and DVDs. It might just reinvent itself again.
So, that is why I am continuing to track this company. You never know when it might be a good investment in the future. It is also good to look at companies that have problem was well as those that have none currently. I think that once you invest in a manufacturing firm, you may be getting some good diversification, but you probably cannot buy the shares and ignore them. There are some parts of the market where you can make good money, but that you have to watch more carefully.
The reason why I sold this stock when I did was that they got into some difficulties. They are in a business that has a habit of getting into difficulty as the medium that is used in home entertainment continues to change and will so in the foreseeable future, as far as I can see. The share price is down to a $1.00 currently, so needless to say, anyone who has invested in this stock over the past 5 or 10 years has lost money.
There are some bright points. For example, this company is still has a cash flow. This is a better indicator of how a company is doing than the earnings or EPS figure. Also, over the past 3 years they have been adding to their cash.
However, the company does have some problems. The biggest is their long term debt that is due in May of 2011. They have found no refinancing for this yet. We are in a recession, and refinancing in a recession is always difficult, especially if the company has problems. The other thing to affect investors is that this company has no book value (the book value is negative).
As I have said, I will continue to track this company. Tomorrow, I will look at what the analysts are saying about it.
Cinram is the world's largest provider of pre-recorded optical discs and related logistics services for leading motion picture studios, music labels, publishers and computer software companies. Cinram also provides distribution and logistics services to the telecommunications industry in North America and Europe through its wireless subsidiaries. Its web site is here Cinram. See my spreadsheet at crw.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.
So, that is why I am continuing to track this company. You never know when it might be a good investment in the future. It is also good to look at companies that have problem was well as those that have none currently. I think that once you invest in a manufacturing firm, you may be getting some good diversification, but you probably cannot buy the shares and ignore them. There are some parts of the market where you can make good money, but that you have to watch more carefully.
The reason why I sold this stock when I did was that they got into some difficulties. They are in a business that has a habit of getting into difficulty as the medium that is used in home entertainment continues to change and will so in the foreseeable future, as far as I can see. The share price is down to a $1.00 currently, so needless to say, anyone who has invested in this stock over the past 5 or 10 years has lost money.
There are some bright points. For example, this company is still has a cash flow. This is a better indicator of how a company is doing than the earnings or EPS figure. Also, over the past 3 years they have been adding to their cash.
However, the company does have some problems. The biggest is their long term debt that is due in May of 2011. They have found no refinancing for this yet. We are in a recession, and refinancing in a recession is always difficult, especially if the company has problems. The other thing to affect investors is that this company has no book value (the book value is negative).
As I have said, I will continue to track this company. Tomorrow, I will look at what the analysts are saying about it.
Cinram is the world's largest provider of pre-recorded optical discs and related logistics services for leading motion picture studios, music labels, publishers and computer software companies. Cinram also provides distribution and logistics services to the telecommunications industry in North America and Europe through its wireless subsidiaries. Its web site is here Cinram. See my spreadsheet at crw.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, September 21, 2010
CI Financial Corp 2
I do not currently own this stock (TSX-CIX). This company is not on the dividend lists that I follow, but it is a dividend paying company. When they became a Unit Trust in 2006, dividends were significantly increased, but these dividends proved to be unsustainable, so dividends where decreased. They changed back to a corporation in 2009 and since that time, they have been increasing their dividends.
I looked at the Insiders Trading report. I find that there is about $2M of Insider Buying and $2M of Insider Selling over the past year. The other thing to note is that the company is buying back and cancelling shares. It is good to look at this report, but often it does not tell you much and this is the case here. Another thing to note is the Bank of Nova Scotia is a passive investor in this company.
When I look at the 5 year Median low P/E Ratio, I get one of 11.2 and the 5 year median high P/E ratio is 18.6. The current P/E ratio is 18, so this is a bit high. When I look at the Graham Price, I get one of $11.78. The current price of $20.20 is just over 70% off this. Except for the last couple of year, the stock price on this stock has never been close to the Graham Price. However, like the P/E ratio, it is a little high.
When I look at dividend yield, I get a 5 year average of 5.4%. However, removing the yields for when this company turn into an income trust, I get an average of 3.5%. This is a little lower than the current 3.8%. I must say that it is hard to determine an average or high yield for this company. The company’s dividends started off very low (below 1%) and then got quite high when it was an income trust and now they have been adjusted downward.
The last thing to look at is the Price/Book Value Ratio. Since this ratio has jumped around a lot, I am using the 5 year, rather than the 10 year average. The 5 year average is 4.25 and the current one is 3.67. The current one is some 87% of the 5 year average. This shows a relatively good price, but not a great one.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Reduce recommendations. The consensus will be a Hold recommendation. (See my site for information on analyst ratings.) I do not know the reason for the reduce recommendation, but the main reason for Hold recommendations is that the expected stock price within the next 12 months is not far off the current price. It is still felt that there is a lot of cash on the side waiting to be invested. When it is, mutual companies will benefit. Of course, no one knows when this will happen. There is also the possibility that the company will be bought out by Bank of Nova Scotia. However, that is currently off the table.
As I said yesterday, I am well exposed to the mutual fund business with the Life Insurance and Bank stocks, so I am not currently interested in this stock. However, when the Bank stocks increase their dividends and these stocks take off again, I will probably be selling some banks and then I can revisit this.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is here CI Financial. See my spreadsheet at cix.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 looked at the Insiders Trading report. I find that there is about $2M of Insider Buying and $2M of Insider Selling over the past year. The other thing to note is that the company is buying back and cancelling shares. It is good to look at this report, but often it does not tell you much and this is the case here. Another thing to note is the Bank of Nova Scotia is a passive investor in this company.
When I look at the 5 year Median low P/E Ratio, I get one of 11.2 and the 5 year median high P/E ratio is 18.6. The current P/E ratio is 18, so this is a bit high. When I look at the Graham Price, I get one of $11.78. The current price of $20.20 is just over 70% off this. Except for the last couple of year, the stock price on this stock has never been close to the Graham Price. However, like the P/E ratio, it is a little high.
When I look at dividend yield, I get a 5 year average of 5.4%. However, removing the yields for when this company turn into an income trust, I get an average of 3.5%. This is a little lower than the current 3.8%. I must say that it is hard to determine an average or high yield for this company. The company’s dividends started off very low (below 1%) and then got quite high when it was an income trust and now they have been adjusted downward.
The last thing to look at is the Price/Book Value Ratio. Since this ratio has jumped around a lot, I am using the 5 year, rather than the 10 year average. The 5 year average is 4.25 and the current one is 3.67. The current one is some 87% of the 5 year average. This shows a relatively good price, but not a great one.
When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Reduce recommendations. The consensus will be a Hold recommendation. (See my site for information on analyst ratings.) I do not know the reason for the reduce recommendation, but the main reason for Hold recommendations is that the expected stock price within the next 12 months is not far off the current price. It is still felt that there is a lot of cash on the side waiting to be invested. When it is, mutual companies will benefit. Of course, no one knows when this will happen. There is also the possibility that the company will be bought out by Bank of Nova Scotia. However, that is currently off the table.
As I said yesterday, I am well exposed to the mutual fund business with the Life Insurance and Bank stocks, so I am not currently interested in this stock. However, when the Bank stocks increase their dividends and these stocks take off again, I will probably be selling some banks and then I can revisit this.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is here CI Financial. See my spreadsheet at cix.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, September 20, 2010
CI Financial Corp
I do not currently own this stock (TSX-CIX). This company is not on the dividend lists that I follow. They have significantly increased their dividend over the years, but it started at a very low yield. When they became a Unit Trust in 2006, dividends were significantly increased, but these dividends proved to be unsustainable, so dividends where decreased. They changed back to a corporation in 2009 and since that time, they have been increasing their dividends.
For dividends, over the past 5 years they have raised them by an average of 9.24%. (This ignores the big dividend increases and decreases when the company was an income trust.) So, the company really has not done badly when it comes to dividends. The company paid a reasonable percentage of their cash flow in dividends in 2009 of 33%. It is expected that the payout ratio will increase significantly this year and then moderate in 2011. However, they did very well in cash flow in the first half of this year, although not quite as well as last year. Do not forget, I am picking up on expected cash flows, so these numbers can change.
When you look at growth figures, the 10 year figures are generally better than the 5 year figures. This is not surprising since a lot of a mutual fund’s fees are a percentage of the value of their mutual fund holdings. Two things happen in a bear market for Mutual Funds. One is the value of their holdings go down because the market is down. The other thing is that people tend to pull their funds out because of the bear market. It is also harder to make sales in a bear market.
So the increase in sales and earnings for this company for the past 5 years is acceptable at just over 4% per year. The 10 year growth in earnings is at 32% per year and a lot better than the 17% per year growth for sales over the same period. When I look at the Return on Equity, I find that it has been good for the last 5 years. The ROE for 2009 was 15.2% and the ROE for the first half of this year is still good at 10.3%.
What I do not like about this company is the low Liquidity Ratio, which averages over the last 5 years at 0.88. It is a different story when you look at the Asset/Liability Ratios. The A/L ratio is very good at an average of 2.01 and a current ratio of 2.16. What is good about this company is that when you look at Total Return, it is about 12% per year for the last 5 years and about 22% per year for the last 10 years. The portion of the total return for dividends is around 6% per year. However, dividend yields in the future will be lower than over the past 5 years. Dividend yields on corporations are not as high as on Income Trust companies.
You often hear that it is more profitable to buy shares in a Mutual Fund company than to put your money than in their mutual funds. This is because the Mutual Fund companies get to keep their fees no matter what the stock market does. If you put money into a mutual fund that has 2% management fees, they will get this fee even if you lose money on your mutual fund money. This is one reason why I do not personally buy mutual funds.
Another reason I do not buy mutual funds is that in a bear market, people tend to pull their money from their mutual funds and this forces the fund managers to sell stock at inopportune times. They also pile money into mutual funds when the market is rising, and the fund manager has to buy stocks in a rising market. This can lead to the fund manager being force to buy high and sell low. This is not what he should be doing. Even if you do not behave this way, when other people do, it affects the profitability of the mutual fund.
This is a good stock and I will continue to follow it. However, I currently have enough exposure to the mutual fund industry though my investments in banks and insurance companies.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is here CI Financial. See my spreadsheet at cix.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.
For dividends, over the past 5 years they have raised them by an average of 9.24%. (This ignores the big dividend increases and decreases when the company was an income trust.) So, the company really has not done badly when it comes to dividends. The company paid a reasonable percentage of their cash flow in dividends in 2009 of 33%. It is expected that the payout ratio will increase significantly this year and then moderate in 2011. However, they did very well in cash flow in the first half of this year, although not quite as well as last year. Do not forget, I am picking up on expected cash flows, so these numbers can change.
When you look at growth figures, the 10 year figures are generally better than the 5 year figures. This is not surprising since a lot of a mutual fund’s fees are a percentage of the value of their mutual fund holdings. Two things happen in a bear market for Mutual Funds. One is the value of their holdings go down because the market is down. The other thing is that people tend to pull their funds out because of the bear market. It is also harder to make sales in a bear market.
So the increase in sales and earnings for this company for the past 5 years is acceptable at just over 4% per year. The 10 year growth in earnings is at 32% per year and a lot better than the 17% per year growth for sales over the same period. When I look at the Return on Equity, I find that it has been good for the last 5 years. The ROE for 2009 was 15.2% and the ROE for the first half of this year is still good at 10.3%.
What I do not like about this company is the low Liquidity Ratio, which averages over the last 5 years at 0.88. It is a different story when you look at the Asset/Liability Ratios. The A/L ratio is very good at an average of 2.01 and a current ratio of 2.16. What is good about this company is that when you look at Total Return, it is about 12% per year for the last 5 years and about 22% per year for the last 10 years. The portion of the total return for dividends is around 6% per year. However, dividend yields in the future will be lower than over the past 5 years. Dividend yields on corporations are not as high as on Income Trust companies.
You often hear that it is more profitable to buy shares in a Mutual Fund company than to put your money than in their mutual funds. This is because the Mutual Fund companies get to keep their fees no matter what the stock market does. If you put money into a mutual fund that has 2% management fees, they will get this fee even if you lose money on your mutual fund money. This is one reason why I do not personally buy mutual funds.
Another reason I do not buy mutual funds is that in a bear market, people tend to pull their money from their mutual funds and this forces the fund managers to sell stock at inopportune times. They also pile money into mutual funds when the market is rising, and the fund manager has to buy stocks in a rising market. This can lead to the fund manager being force to buy high and sell low. This is not what he should be doing. Even if you do not behave this way, when other people do, it affects the profitability of the mutual fund.
This is a good stock and I will continue to follow it. However, I currently have enough exposure to the mutual fund industry though my investments in banks and insurance companies.
CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. CI became a public company in June 1994. It was then listed on the Toronto Stock Exchange. They because an Income Trust in 2006 and effective January 1, 2009, CI converted back to a corporation. Its web site is here CI Financial. See my spreadsheet at cix.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, September 17, 2010
CCL Industries Inc. 2
I do not currently own this stock (TSX-CCL.B). This company is on the dividend lists that I follow. This is why I have done a spreadsheet on them. They are a good dividend paying company. Some may have a problem with the fact that this is a company with two classes of shares and the original family owns 94% of the votes.
What I do not like about this company is that insiders have more stock options than shares. This, unfortunately, is not uncommon, but it does not mean I have to like it. There is lots of insider selling to the tune of some $8M. However, to put this into perspective, it is less than 1% (.79%) of the market value of the company. There is no insider buying.
I get a 5 year median low P/E ratio of 11.6 and a 5 year median high P/E ratio of 14.8. So, on a relative basis the current one of 14.3 is high for this stock. The company is expected to earn a decent profit this year and the stock price has been rising. This is not a bad P/E ratio. The problem with this stock is that the earnings tend to fluctuate. When I look at the Graham price, I get one of $33.48 and this is some 8% higher than the current stock price of $30.77. Here again, there is a problem in that the earnings fluctuate, so the Graham Price has fluctuated a lot. Another point is that stock price is often lower than the Graham Price on this stock is.
When I look at the current yield of 2.1%, it is better than the 5 year average of 1.8%. The 10 year average yield is 2.1%. I get a Price/Book Value Ratio of 1.33 and I have a 10 year average P/B of 1.27. The 5 year average P/B is 1.42. So the current ratio is not far off the average. All of this point to the fact that the stock price is no bargain, but neither is it high.
When I look at what the analysts’ recommendations are, I find a Strong Buy, a Buy and a Hold. The consensus would be a Buy. (See my site for information on analyst ratings.) Analysts still seem to feel that the stock price can move up a bit more over the next year, but not by much. If you look at expected stock movement of approximately 4% and a 2% dividend, it would give you a total return over the next year of 6%. This is a little low for a total return. However, do not forget these are estimates and no one knows what the market can throw at us over the next year.
Currently, I plan to continue to track this stock as it is on the dividend stock lists that I follow. It would seem from all the above that if you are interested in this stock, it might be wise to wait for it to drop a bit before buying. But, here is another opinion from a recent Globe and Mail article.
CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world’s largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world’s largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Stuart Lang and Donald Lang own this stock 94%. Its web site is here CCL. See my spreadsheet at cll.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.
What I do not like about this company is that insiders have more stock options than shares. This, unfortunately, is not uncommon, but it does not mean I have to like it. There is lots of insider selling to the tune of some $8M. However, to put this into perspective, it is less than 1% (.79%) of the market value of the company. There is no insider buying.
I get a 5 year median low P/E ratio of 11.6 and a 5 year median high P/E ratio of 14.8. So, on a relative basis the current one of 14.3 is high for this stock. The company is expected to earn a decent profit this year and the stock price has been rising. This is not a bad P/E ratio. The problem with this stock is that the earnings tend to fluctuate. When I look at the Graham price, I get one of $33.48 and this is some 8% higher than the current stock price of $30.77. Here again, there is a problem in that the earnings fluctuate, so the Graham Price has fluctuated a lot. Another point is that stock price is often lower than the Graham Price on this stock is.
When I look at the current yield of 2.1%, it is better than the 5 year average of 1.8%. The 10 year average yield is 2.1%. I get a Price/Book Value Ratio of 1.33 and I have a 10 year average P/B of 1.27. The 5 year average P/B is 1.42. So the current ratio is not far off the average. All of this point to the fact that the stock price is no bargain, but neither is it high.
When I look at what the analysts’ recommendations are, I find a Strong Buy, a Buy and a Hold. The consensus would be a Buy. (See my site for information on analyst ratings.) Analysts still seem to feel that the stock price can move up a bit more over the next year, but not by much. If you look at expected stock movement of approximately 4% and a 2% dividend, it would give you a total return over the next year of 6%. This is a little low for a total return. However, do not forget these are estimates and no one knows what the market can throw at us over the next year.
Currently, I plan to continue to track this stock as it is on the dividend stock lists that I follow. It would seem from all the above that if you are interested in this stock, it might be wise to wait for it to drop a bit before buying. But, here is another opinion from a recent Globe and Mail article.
CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world’s largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world’s largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Stuart Lang and Donald Lang own this stock 94%. Its web site is here CCL. See my spreadsheet at cll.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, September 16, 2010
CCL Industries Inc.
I do not currently own this stock (TSX-CCL.B). They on the dividend lists that I follow of Dividend Achievers and Dividend Aristocrats (see indices). This is why I have done a spreadsheet on them. This is a company with two classes of shares and the original family owns 94% of the votes.
When looking at dividends, they have increased them by 9 and 7% per year over the last 5 and 10 years. This is a good record. I am generally more concerned about the payout ratios from cash flow. Although these ratios have been increasing lately, the ratio is still only about 13%, which is a low one and therefore of no concern. The average payout ratio from CF for the past 5 years is just 10%.
However, as with a lot of industrial stock, the yield is low. The 5 year average is just 1.8%. The current one is a bit better at just over 2%. Considering we are in a recession, the stock has done well in Total Returns. Looking at prices at the year end, the 5 and 10 year Total Returns are both over 10% per year. If I look at average prices, the Total Return for the last 5 and 10 years is just over 7% per year. If you try to do your buying in the fall and selling in April or May, you tend to do a bit better than average. However, why I look at average prices, is that you really, generally, cannot hope to get a better than average price. Once in a while, you might be lucky and get a good sell or buy price on shares, but generally, the best we can do is to get an average price.
When looking at sales, earnings and cash flow, this stock has had its ups and downs and growth figures are not good. Hopefully these figures will improve with the economy. Analysts of this stock certainly expect that both earnings and cash flow will improve this and then do better again in 2011. I must point out that there are not many analysts following this stock, as the company is controlled by the Lang family and not the shareholders. This can limit the interest in a stock.
When Looking at Liquidity Ratios and Asset/Liability Ratios, I find both good. These ratios at the end of 2009 were 1.50 and 1.84 respectively. The same ratios at the end of the 2nd quarter were 1.32 and 1.84. The lower liquidity ratio was due to a portion of the long term debt becoming due. The 5 year averages for these ratios was 1.49 and 1.79 respectively. The Liquidity ratios look at current assets and current liabilities and the Asset/Liability Ratios look at total assets and total liabilities. In both cases, assets can cover liabilities.
The last thing to look at is the Return on Equity. This is looking at net income compared with the company’s book value. The ROE for the 2nd quarter of 2010 is good at 10.9%. The 5 year average is 11.1%. The ROE for 2008 and 2009 were lower at around 6%, but we were or are in a recession. (You only know when you come out of a recession after the fact, and I do not believe any official has yet declared this recession over.)
I am currently not interested in buying this stock, but I like to look at ones on the dividend lists that I follow. That is because the stocks on these lists are often the ones I want to look at first when I do want to buy more shares. Tomorrow I will look at what the analysts say about this stock.
CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world’s largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world’s largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Stuart Lang and Donald Lang own this stock 94%. Its web site is here CCL. See my spreadsheet at cll.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 dividends, they have increased them by 9 and 7% per year over the last 5 and 10 years. This is a good record. I am generally more concerned about the payout ratios from cash flow. Although these ratios have been increasing lately, the ratio is still only about 13%, which is a low one and therefore of no concern. The average payout ratio from CF for the past 5 years is just 10%.
However, as with a lot of industrial stock, the yield is low. The 5 year average is just 1.8%. The current one is a bit better at just over 2%. Considering we are in a recession, the stock has done well in Total Returns. Looking at prices at the year end, the 5 and 10 year Total Returns are both over 10% per year. If I look at average prices, the Total Return for the last 5 and 10 years is just over 7% per year. If you try to do your buying in the fall and selling in April or May, you tend to do a bit better than average. However, why I look at average prices, is that you really, generally, cannot hope to get a better than average price. Once in a while, you might be lucky and get a good sell or buy price on shares, but generally, the best we can do is to get an average price.
When looking at sales, earnings and cash flow, this stock has had its ups and downs and growth figures are not good. Hopefully these figures will improve with the economy. Analysts of this stock certainly expect that both earnings and cash flow will improve this and then do better again in 2011. I must point out that there are not many analysts following this stock, as the company is controlled by the Lang family and not the shareholders. This can limit the interest in a stock.
When Looking at Liquidity Ratios and Asset/Liability Ratios, I find both good. These ratios at the end of 2009 were 1.50 and 1.84 respectively. The same ratios at the end of the 2nd quarter were 1.32 and 1.84. The lower liquidity ratio was due to a portion of the long term debt becoming due. The 5 year averages for these ratios was 1.49 and 1.79 respectively. The Liquidity ratios look at current assets and current liabilities and the Asset/Liability Ratios look at total assets and total liabilities. In both cases, assets can cover liabilities.
The last thing to look at is the Return on Equity. This is looking at net income compared with the company’s book value. The ROE for the 2nd quarter of 2010 is good at 10.9%. The 5 year average is 11.1%. The ROE for 2008 and 2009 were lower at around 6%, but we were or are in a recession. (You only know when you come out of a recession after the fact, and I do not believe any official has yet declared this recession over.)
I am currently not interested in buying this stock, but I like to look at ones on the dividend lists that I follow. That is because the stocks on these lists are often the ones I want to look at first when I do want to buy more shares. Tomorrow I will look at what the analysts say about this stock.
CCL Industries Inc. provides state-of-the-art specialty packaging solutions to some of the world’s largest producers of consumer brands in personal care, cosmetic, healthcare, household and specialty food and beverage products. CCL is the world’s largest supplier of innovative and secure labeling solutions to leading global companies in the consumer product and healthcare sectors and supplies aluminum containers and plastic tubes for major consumer brands of personal care, household products and specialty food and beverages. With headquarters in Toronto, Ontario, Canada, CCL Industries operates production facilities in North America, Europe, Latin America, Asia and Australia. Stuart Lang and Donald Lang own this stock 94%. Its web site is here CCL. See my spreadsheet at cll.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, September 15, 2010
Canam Group Inc 2
I do not currently own this stock (TSX-CAM). It is not on the dividend lists that I follow. The closes companies that I do own (and follow) are SNC-Lavalin and Stantec. Both these companies are in infrastructure, internationally. However, what you invest in can a lot to do with where you are in your life cycle. I do not find this attractive, because I live off my dividends. However, if you are young and far from quitting work you might think differently.
When I look at the Insider Trading under this company, I find over the past year that there has been very little of either, so that we learn nothing here. Of note is that Marcel Dutil, the CEO and founder of this company has 35% of the outstanding shares. However, only 12% seems to be common (voting shares) and the rest in Class A, subordinate voting shares. In the annual report for 2009, it says he owns 17% of the company shares. The company is in the process of buying back shares, and plan to buy back about 10% of the common shares outstanding.
The first ratio I should talk about today is the Price/Book Value Ratio. This is because the P/BV is probably the best and most solid indicator that the current stock price is a good one. Another plus is that it is not built on any estimates. I get a 10 year average of 1.08 and a current one of .84, which is only 77% of the 10 year average. The other thing to note is that the P/B is below 1.00. That is the stock is selling below the book value.
Because the company is expected to earn little this year, the current P/E is too high to even consider in the analysis of this stock. The forward P/E is 14. The 5 year median high P/E is 14 and the 5 year median how P/E is 8. However, the P/E on this stock has been increasing steadily over the past 5 years. For example, the low has gone from 5 to 10.7. The high P/E has gone from 8 to 18. On an absolute basis, a P/E of 10 is low and one of 14 is not bad.
You run into the same problem in looking at the Graham Price. I get only $2.43 for the 2010 Graham Price because of the low earnings expected this year. However, the Graham Price was $9.42 in 2009 and I have one of $10.12 for 2011. I get a current dividend yield of 2.2%. The 5 year average is lower at 1.5%. However, the 10 year average low is 3%. So, this year is good in average terms, but the yield has been higher in the past.
When I look at analysts recommendations, I find lots of Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) According to Google Finance, this stock has a Beta Ratio of 1.26. (TSX would be a beta of 1.00, so this stock is expected to do better than the TSX.)
When I look for analysts comments, I find nothing bad said about this company. Many think it is well managed and like the fact that it has low debt. In periods of financial problems, like the current one we are in, a good company to invest in would be one with low debt as they are less likely to get into financial difficulties. They are also better positioned to ride out recessions.
As I said yesterday, I am currently not interested in this stock because of the uneven dividend payment history. I live off my dividends, so I want companies that pay consistently. However, if you are in a different part of your life cycle, you might want to consider this company.
ABC funds sometime put out full reports on stocks they hold or have held. See their report on this stock. On the 2009 report, it says that I. A. Michael Investment Counsel Ltd owns 11% of the outstanding shares. This is ABC funds. Also, see a report by Portsmouth Equity Research at eResearch. However, I find it interesting that this second report just mentions dividends being paid from 2006. They do not mention that dividends had been paid previously and then discontinued in 2004.
Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, Saudi Arabia, United Arab Emirates, India, Romania France and China. Marcel Dutil owns 35% of this company. Its web site is here Canam. See my spreadsheet at cam.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 the Insider Trading under this company, I find over the past year that there has been very little of either, so that we learn nothing here. Of note is that Marcel Dutil, the CEO and founder of this company has 35% of the outstanding shares. However, only 12% seems to be common (voting shares) and the rest in Class A, subordinate voting shares. In the annual report for 2009, it says he owns 17% of the company shares. The company is in the process of buying back shares, and plan to buy back about 10% of the common shares outstanding.
The first ratio I should talk about today is the Price/Book Value Ratio. This is because the P/BV is probably the best and most solid indicator that the current stock price is a good one. Another plus is that it is not built on any estimates. I get a 10 year average of 1.08 and a current one of .84, which is only 77% of the 10 year average. The other thing to note is that the P/B is below 1.00. That is the stock is selling below the book value.
Because the company is expected to earn little this year, the current P/E is too high to even consider in the analysis of this stock. The forward P/E is 14. The 5 year median high P/E is 14 and the 5 year median how P/E is 8. However, the P/E on this stock has been increasing steadily over the past 5 years. For example, the low has gone from 5 to 10.7. The high P/E has gone from 8 to 18. On an absolute basis, a P/E of 10 is low and one of 14 is not bad.
You run into the same problem in looking at the Graham Price. I get only $2.43 for the 2010 Graham Price because of the low earnings expected this year. However, the Graham Price was $9.42 in 2009 and I have one of $10.12 for 2011. I get a current dividend yield of 2.2%. The 5 year average is lower at 1.5%. However, the 10 year average low is 3%. So, this year is good in average terms, but the yield has been higher in the past.
When I look at analysts recommendations, I find lots of Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) According to Google Finance, this stock has a Beta Ratio of 1.26. (TSX would be a beta of 1.00, so this stock is expected to do better than the TSX.)
When I look for analysts comments, I find nothing bad said about this company. Many think it is well managed and like the fact that it has low debt. In periods of financial problems, like the current one we are in, a good company to invest in would be one with low debt as they are less likely to get into financial difficulties. They are also better positioned to ride out recessions.
As I said yesterday, I am currently not interested in this stock because of the uneven dividend payment history. I live off my dividends, so I want companies that pay consistently. However, if you are in a different part of your life cycle, you might want to consider this company.
ABC funds sometime put out full reports on stocks they hold or have held. See their report on this stock. On the 2009 report, it says that I. A. Michael Investment Counsel Ltd owns 11% of the outstanding shares. This is ABC funds. Also, see a report by Portsmouth Equity Research at eResearch. However, I find it interesting that this second report just mentions dividends being paid from 2006. They do not mention that dividends had been paid previously and then discontinued in 2004.
Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, Saudi Arabia, United Arab Emirates, India, Romania France and China. Marcel Dutil owns 35% of this company. Its web site is here Canam. See my spreadsheet at cam.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, September 14, 2010
Canam Group Inc
I do not currently own this stock (TSX-CAM). It is not on the dividend lists that I follow. I started to follow it when I was looking for a company that was into infrastructure and supporting industries. This company is in the later sector. It is also an international company. I do not follow a comparable company. The closes companies that I do follow are SNC-Lavalin and Stantec. Both these companies are in infrastructure, internationally.
Probably the main reason I would not buy this company is that the dividend payments are all over the place. The dividends go up and they go down, and they are sometimes not even paid. Over the last 10 years, there were 2 years in which dividends were not paid, in 2004 and 2005. However, over the past 5 and 10 years, dividends have added some 2 to 3% to the total return of this company. The company is responsible in that they only pay dividends when they can afford to. If I did not live off my dividends, I might look differently on this company.
This recent recession seems to have hit this company hard. When you look at the growth figures, however, what is most noticeable is that, in most cases, they are worse over than last 10 years than over the last 5 years. If you had held this stock over the past 5 years, the total return would have been just over 8% per year. This is a good return. However, if you had held this stock for the past 10 years, the total return would be 2 or 3% per year. One of the things to note is that the price of the stock has been close to or below the stock’s book value over the past few years.
A good thing about this stock is that it has a very strong balance sheet. The Liquidity Ratio is currently at 2.12. It has a 5 year average of 2.38. The Asset/Liability Ratio is also currently good at 2.21 and a 5 year average of 2.61. For these ratios, anything over 1.50 is good. This stock has not always made a profit, but the 5 year running average for Return on Equity to 2009 is 10.8% and this is good. For the first two quarters of 2010, the company has been running a small loss, but it is expected to make some sort of profit by the end of this year.
Tomorrow I will look at what the analysts are saying about this stock.
Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, Saudi Arabia, United Arab Emirates, India, Romania France and China. Marcel Dutil owns 16% of this company. Its web site is here Canam. See my spreadsheet at cam.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.
Probably the main reason I would not buy this company is that the dividend payments are all over the place. The dividends go up and they go down, and they are sometimes not even paid. Over the last 10 years, there were 2 years in which dividends were not paid, in 2004 and 2005. However, over the past 5 and 10 years, dividends have added some 2 to 3% to the total return of this company. The company is responsible in that they only pay dividends when they can afford to. If I did not live off my dividends, I might look differently on this company.
This recent recession seems to have hit this company hard. When you look at the growth figures, however, what is most noticeable is that, in most cases, they are worse over than last 10 years than over the last 5 years. If you had held this stock over the past 5 years, the total return would have been just over 8% per year. This is a good return. However, if you had held this stock for the past 10 years, the total return would be 2 or 3% per year. One of the things to note is that the price of the stock has been close to or below the stock’s book value over the past few years.
A good thing about this stock is that it has a very strong balance sheet. The Liquidity Ratio is currently at 2.12. It has a 5 year average of 2.38. The Asset/Liability Ratio is also currently good at 2.21 and a 5 year average of 2.61. For these ratios, anything over 1.50 is good. This stock has not always made a profit, but the 5 year running average for Return on Equity to 2009 is 10.8% and this is good. For the first two quarters of 2010, the company has been running a small loss, but it is expected to make some sort of profit by the end of this year.
Tomorrow I will look at what the analysts are saying about this stock.
Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, Saudi Arabia, United Arab Emirates, India, Romania France and China. Marcel Dutil owns 16% of this company. Its web site is here Canam. See my spreadsheet at cam.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, September 13, 2010
A little Web advice can be a dangerous thing
I was reading this column of the same title by Jonathan Chevreau of the Financial Post on the weekend and I would like to make some comments.
We all know we cannot count on people being smart all the time. That is rather dangerous. On the other hand, you cannot assume that Joe Q or Jane Q public is dumb. This is just as dangerous. People very often forget this, and it is especially common in politicians, but it can be found in lots of other places as well. I do not know about you, but I read blogs etc to get ideas and learn about other people approaches to such subjects as investing. I rather think this is common.
I must admit that I do not often talk about fixed income as I have very little of this at the moment, interest rates being so low being a main reason. However, the same rules apply to fixed income as to other investment. Do not invest in what you do not understand. Also, you want to make sure you understand how any entity you investment is going to pay out what you expect. This applies to a bond as well as any stock.
Maybe bloggers that talk about stocks do not talk about fixed income because that is a whole other world that is probably more complex than stock investing. I have had some experience in bonds, GICs, etc, and just because something is labeled fixed income, you cannot assume that it is a safe investment. Do not let anyone fool you into thinking this, because it is wrong. You still need to know what you are doing, or you should get help.
As far as investing in dividend funds, I would not do so, as I do not invest in Mutual Funds or ETFs that contain stocks. However, I do invest in dividend stocks. Are they for everyone? Of course, not. As I have pointed out, do not invest in what you do not understand. Do not invest in anything that prevents you from getting a good night sleep.
I have not come across any blogger that says to “avoid foreign markets because of currency risk/currency conversion fees”. However, I think that it is worth pointing out that if you invest in a Canadian company that has overseas business, you do have a currency risk. It is just the company you invest in that helps you to manage this risk. I do seek out Canadian International companies to invest in because of this and I have dabbled a bit in foreign stock. Never made much in foreign stock, but it was a learning experience.
And if you happen to come across a blog that says, “Follow my lead because I made 30% returns every year in the last seven years", remember what your mother said. If something sounds too good to be true, it probably is. My mother was not very sophisticated, but she certainly knew a tall tale when she saw one. But, really, however, many people are going to believe such a claim and for how? And, this gets back to my first point. Do not underestimate the general public.
Personally, I have learned as much from other bloggers as I have from newspaper columnist, books, and other so called experts. I think the main thing to keep in mind is to use your common sense. I do not know of any dividendman etc blogger, but I do know a blogger called “Dividend Girl”. I have referred to her site previously at Dividend Girl. She basically talks about what she is personally doing. She may not say her name, but I can understand that. In this day and age, as a woman, you still must be careful. If I give the sort of information out on what I am doing as she is, I would not put my name to the blog either.
You never know from whom you might learn something useful. So, do not let anyone put you off reading your favorite blogger, whoever that should be.
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.
We all know we cannot count on people being smart all the time. That is rather dangerous. On the other hand, you cannot assume that Joe Q or Jane Q public is dumb. This is just as dangerous. People very often forget this, and it is especially common in politicians, but it can be found in lots of other places as well. I do not know about you, but I read blogs etc to get ideas and learn about other people approaches to such subjects as investing. I rather think this is common.
I must admit that I do not often talk about fixed income as I have very little of this at the moment, interest rates being so low being a main reason. However, the same rules apply to fixed income as to other investment. Do not invest in what you do not understand. Also, you want to make sure you understand how any entity you investment is going to pay out what you expect. This applies to a bond as well as any stock.
Maybe bloggers that talk about stocks do not talk about fixed income because that is a whole other world that is probably more complex than stock investing. I have had some experience in bonds, GICs, etc, and just because something is labeled fixed income, you cannot assume that it is a safe investment. Do not let anyone fool you into thinking this, because it is wrong. You still need to know what you are doing, or you should get help.
As far as investing in dividend funds, I would not do so, as I do not invest in Mutual Funds or ETFs that contain stocks. However, I do invest in dividend stocks. Are they for everyone? Of course, not. As I have pointed out, do not invest in what you do not understand. Do not invest in anything that prevents you from getting a good night sleep.
I have not come across any blogger that says to “avoid foreign markets because of currency risk/currency conversion fees”. However, I think that it is worth pointing out that if you invest in a Canadian company that has overseas business, you do have a currency risk. It is just the company you invest in that helps you to manage this risk. I do seek out Canadian International companies to invest in because of this and I have dabbled a bit in foreign stock. Never made much in foreign stock, but it was a learning experience.
And if you happen to come across a blog that says, “Follow my lead because I made 30% returns every year in the last seven years", remember what your mother said. If something sounds too good to be true, it probably is. My mother was not very sophisticated, but she certainly knew a tall tale when she saw one. But, really, however, many people are going to believe such a claim and for how? And, this gets back to my first point. Do not underestimate the general public.
Personally, I have learned as much from other bloggers as I have from newspaper columnist, books, and other so called experts. I think the main thing to keep in mind is to use your common sense. I do not know of any dividendman etc blogger, but I do know a blogger called “Dividend Girl”. I have referred to her site previously at Dividend Girl. She basically talks about what she is personally doing. She may not say her name, but I can understand that. In this day and age, as a woman, you still must be careful. If I give the sort of information out on what I am doing as she is, I would not put my name to the blog either.
You never know from whom you might learn something useful. So, do not let anyone put you off reading your favorite blogger, whoever that should be.
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, September 10, 2010
Canadian Utilities Ltd 2
I do not currently own this stock (TSX-CU). It is on the dividend lists that I follow, of Dividend Achievers and Dividend Aristocrats (see indices). This is a stock you buy for increasing dividend income and some capital gain. Possible problems are that it is 75% owned by ATCO and shares on TSX are non-voting.
Over the past year, there has been 2.1M of Insider Selling, mostly at the end of 2009. There has been minimal Insider Buying. Both the CEO and the CFO have more stock options than shares. The opposite is true of the officers and the directors, but they also have lots of stock options. The company is buying back non-voting shares for cancellation. I know that some analysts like buy backs, but I am not keen on them and recently analysts have been changing their minds on whether buy backs are good.
When I look at the 5 year median low P/E, I get one of 13.7 and when I look at the 5 year median high P/E, I get one of 17.7. On a relative basis, the current P/E ratio of 14.5 is a good one. It is a little high for a utility, but it is not high on a relative basis. The next thing, of course, is the Graham Price. I get one of $42.39 and this about 13% below the current stock price of $47.91. However, generally over the past 10 years the stock price has been lowered than the Graham Price by an average of almost 8.9%. The stock price has also been lower than the Graham price, 7 of the past 10 years.
When I look at the Price/Book Value, I get a 10 year average of 2.05 and a current ratio of 1.98. This current one is 96% of the 10 year average. This shows a good stock price, but a buy signal is when the current one is 80% below the 10 year average. The current yield at 3.2% is just higher than the 3% average yield. However, the 10 year average high yield is 4%. All this shows a fair, but not great stock price.
This company has preferred shares. There has been some controversy on whether preferred shares are equity or liabilities. I think basically, the debate has them as liabilities, but I show the effect of treating preferred shares as not a liability. See my spreadsheet notes at cu.htm.
When I look at analyst recommendations, I find a few Strong Buys, lots of Holds and one Sell recommendations. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.) I do not know why the one sell. Most analysts like the strong management and good record of dividend increases. Some feel that this stock is fully valued (that is there is not much current room for the stock price to move up). Others feel it is cheaper than other utilities at this time.
I have enough utilities in my stock portfolio, so I will not be adding this one. I will continue to track it, as it is a good utility stock.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns 74% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here CDN Utilities. See my spreadsheet at cu.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.
Over the past year, there has been 2.1M of Insider Selling, mostly at the end of 2009. There has been minimal Insider Buying. Both the CEO and the CFO have more stock options than shares. The opposite is true of the officers and the directors, but they also have lots of stock options. The company is buying back non-voting shares for cancellation. I know that some analysts like buy backs, but I am not keen on them and recently analysts have been changing their minds on whether buy backs are good.
When I look at the 5 year median low P/E, I get one of 13.7 and when I look at the 5 year median high P/E, I get one of 17.7. On a relative basis, the current P/E ratio of 14.5 is a good one. It is a little high for a utility, but it is not high on a relative basis. The next thing, of course, is the Graham Price. I get one of $42.39 and this about 13% below the current stock price of $47.91. However, generally over the past 10 years the stock price has been lowered than the Graham Price by an average of almost 8.9%. The stock price has also been lower than the Graham price, 7 of the past 10 years.
When I look at the Price/Book Value, I get a 10 year average of 2.05 and a current ratio of 1.98. This current one is 96% of the 10 year average. This shows a good stock price, but a buy signal is when the current one is 80% below the 10 year average. The current yield at 3.2% is just higher than the 3% average yield. However, the 10 year average high yield is 4%. All this shows a fair, but not great stock price.
This company has preferred shares. There has been some controversy on whether preferred shares are equity or liabilities. I think basically, the debate has them as liabilities, but I show the effect of treating preferred shares as not a liability. See my spreadsheet notes at cu.htm.
When I look at analyst recommendations, I find a few Strong Buys, lots of Holds and one Sell recommendations. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.) I do not know why the one sell. Most analysts like the strong management and good record of dividend increases. Some feel that this stock is fully valued (that is there is not much current room for the stock price to move up). Others feel it is cheaper than other utilities at this time.
I have enough utilities in my stock portfolio, so I will not be adding this one. I will continue to track it, as it is a good utility stock.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns 74% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here CDN Utilities. See my spreadsheet at cu.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, September 9, 2010
Canadian Utilities Ltd
I do not currently own this stock (TSX-CU). It is on the dividend lists that I follow, of Dividend Achievers and Dividend Aristocrats (see indices). They certainly deserve to be on such as they pay good dividends and over the past 10 year have raised their dividends by more than the rate of inflation. I do not own this stock as I already have enough utility type stocks. This is a stock you buy for increasing dividend income and some capital gain.
This stock currently pays a good dividend of 3.2%. The 5 year average dividend is 3%. I remember reading a US study that says the best returns on stocks was achieved by stocks that pay a dividend between 2.5% and 4%. This stock would certainly prove this thesis. Looking at total returns, using closing prices, for the last 5 and 10 year periods, I get returns of 11.3% and 12.4% per year, respectively. When I use average yearly prices in this calculation, I get total returns of 10.3% and 10.9% per year respectively. Within the total returns, the amount generated by dividend is between 3.5% and 4% per year.
We might hit it lucky by buying a stock at its lowest and then sell it at its highest, but this is unlikely. Perhaps the best we can hope for it to buy and sell at rather average prices. If you are holding and valuating stocks on a calendar year, the total returns at the closing price will give you an idea of what to expect of this stock in your portfolio. This stock has a financial year ending at 31 December each year.
The growth in dividend has been very good at 5.8% and 5% for the last 5 and 10 years. The company’s dividend increases have been higher lately then was previously the case. Most other growth figures are good except for revenues, which have not increased much or have gone down. However, in the 2009 report, the president has this to say about revenues, and I quote “Due to the diverse nature of Canadian Utilities’ operations and inclusion in revenues of certain costs that are flow through in nature (particularly natural gas), changes in revenues are not necessarily indicative of changes in earnings.” See the 2009 report to see the rest of his comments.
As I said earlier, this is a good utility stock to own. It has a strong balance sheet, with a current Liquidity Ratio of 2.87 and a 5 year average return on equity of 14.4%. Tomorrow, I will look at what analysts think about purchasing this stock currently.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns 74% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here CDN Utilities. See my spreadsheet at cu.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.
This stock currently pays a good dividend of 3.2%. The 5 year average dividend is 3%. I remember reading a US study that says the best returns on stocks was achieved by stocks that pay a dividend between 2.5% and 4%. This stock would certainly prove this thesis. Looking at total returns, using closing prices, for the last 5 and 10 year periods, I get returns of 11.3% and 12.4% per year, respectively. When I use average yearly prices in this calculation, I get total returns of 10.3% and 10.9% per year respectively. Within the total returns, the amount generated by dividend is between 3.5% and 4% per year.
We might hit it lucky by buying a stock at its lowest and then sell it at its highest, but this is unlikely. Perhaps the best we can hope for it to buy and sell at rather average prices. If you are holding and valuating stocks on a calendar year, the total returns at the closing price will give you an idea of what to expect of this stock in your portfolio. This stock has a financial year ending at 31 December each year.
The growth in dividend has been very good at 5.8% and 5% for the last 5 and 10 years. The company’s dividend increases have been higher lately then was previously the case. Most other growth figures are good except for revenues, which have not increased much or have gone down. However, in the 2009 report, the president has this to say about revenues, and I quote “Due to the diverse nature of Canadian Utilities’ operations and inclusion in revenues of certain costs that are flow through in nature (particularly natural gas), changes in revenues are not necessarily indicative of changes in earnings.” See the 2009 report to see the rest of his comments.
As I said earlier, this is a good utility stock to own. It has a strong balance sheet, with a current Liquidity Ratio of 2.87 and a 5 year average return on equity of 14.4%. Tomorrow, I will look at what analysts think about purchasing this stock currently.
Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO (ACO.X) owns 74% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here CDN Utilities. See my spreadsheet at cu.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, September 8, 2010
Canada Bread Co. 2
I do not currently own this stock (TSX-CBY). It is not on the dividend lists that I follow, but it is recommended as a conservative investment by some newsletters than I look at occasionally. They feel it is a good buy for long term capital gains. Perhaps so, but I have no interest in it as it is not dividend paying. However, the newsletter does mention that they have not raised their meager dividend for years. There is also the possibility the parent company, Maple Leaf Foods will buy out the 10.2 per cent of Canada Bread that it doesn't already own.
How good is the current price for this stock? First, this is considered to be a growth company, so it should tend to have a higher P/E ratio. The median 5 year low is 13.7 and the median 5 year high is 20.9. On a relative basis, the current P/E at 12.9 therefore shows a good price. The next thing is the Price/Book Value Ratio and at 1.47, it is about 75% of the 10 year average of 1.95. There is no point in talking about relative yield, because the dividend does not change.
I am changing some “average” calculations to “median” calculations as I have notice some analysts are switching from average figures to median figures. I talked to a friend of mine that knows math (an actuary) and he suggested that there might be some very good reasons for the change. However, I must admit, that the change does not make a lot of difference most of the time.
I get a Graham Price of $48.73 and the current price of $44.89 is some 7.9% lower. This shows a good current stock price also. I should mention that with the Graham Price, I simply use in my formula, the estimate earnings for the current year and the current book value (all from my spreadsheet). The formula I use is the square root of (22.5 X EPS X BVPS), where EPS is earnings per share and BVPS is Book Value per share.
For other Graham Prices on my spreadsheet I use the diluted reported earnings per share. There is some controversy about what you should use. Some think that you should use net earnings divided by the outstanding shares. I find mostly that there is not much difference and I want a quick and easy way to get a value to match against the current price. Some site talks about the NCAV (or net current asset value) and have a formula for that, but I do not use this figure. If you Google Graham Number or Graham Price, you get a lot of sites, which talk a lot about Graham, but I think the formula I use is a common one.
So, on to what the analysts say about this stock. There are few analysts following this stock. I would think the reason for this is that there is not a lot of stock available. What I find is one Strong Buy and one Buy, so probably this is a Buy. (See my site for information on analyst ratings.) And, I guess the last thing to mention is that there is some (minimal) Insider Buying. There is no Insider Selling as far as Insider Trading over the past year is concerned.
Canada Bread is a leading manufacturer and marketer of value-added flour based products, including fresh bread, rolls, bagels and sweet goods, frozen partially baked or par-baked breads and bagels, and specialty pasta and sauces. The Company markets products under a number of leading brand names, including Dempster’s, Olafson’s, POM, Ben’s and Olivieri. Canada Bread has operations in Canada, the United States and the United Kingdom. The Company is 89.8% owned by Maple Leaf Foods Inc. Its web site is here Canada Bread. See my spreadsheet at cby.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.
How good is the current price for this stock? First, this is considered to be a growth company, so it should tend to have a higher P/E ratio. The median 5 year low is 13.7 and the median 5 year high is 20.9. On a relative basis, the current P/E at 12.9 therefore shows a good price. The next thing is the Price/Book Value Ratio and at 1.47, it is about 75% of the 10 year average of 1.95. There is no point in talking about relative yield, because the dividend does not change.
I am changing some “average” calculations to “median” calculations as I have notice some analysts are switching from average figures to median figures. I talked to a friend of mine that knows math (an actuary) and he suggested that there might be some very good reasons for the change. However, I must admit, that the change does not make a lot of difference most of the time.
I get a Graham Price of $48.73 and the current price of $44.89 is some 7.9% lower. This shows a good current stock price also. I should mention that with the Graham Price, I simply use in my formula, the estimate earnings for the current year and the current book value (all from my spreadsheet). The formula I use is the square root of (22.5 X EPS X BVPS), where EPS is earnings per share and BVPS is Book Value per share.
For other Graham Prices on my spreadsheet I use the diluted reported earnings per share. There is some controversy about what you should use. Some think that you should use net earnings divided by the outstanding shares. I find mostly that there is not much difference and I want a quick and easy way to get a value to match against the current price. Some site talks about the NCAV (or net current asset value) and have a formula for that, but I do not use this figure. If you Google Graham Number or Graham Price, you get a lot of sites, which talk a lot about Graham, but I think the formula I use is a common one.
So, on to what the analysts say about this stock. There are few analysts following this stock. I would think the reason for this is that there is not a lot of stock available. What I find is one Strong Buy and one Buy, so probably this is a Buy. (See my site for information on analyst ratings.) And, I guess the last thing to mention is that there is some (minimal) Insider Buying. There is no Insider Selling as far as Insider Trading over the past year is concerned.
Canada Bread is a leading manufacturer and marketer of value-added flour based products, including fresh bread, rolls, bagels and sweet goods, frozen partially baked or par-baked breads and bagels, and specialty pasta and sauces. The Company markets products under a number of leading brand names, including Dempster’s, Olafson’s, POM, Ben’s and Olivieri. Canada Bread has operations in Canada, the United States and the United Kingdom. The Company is 89.8% owned by Maple Leaf Foods Inc. Its web site is here Canada Bread. See my spreadsheet at cby.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, September 7, 2010
Canada Bread Co.
I do not currently own this stock (TSX-CBY). It is not on the dividend lists that I follow. I held it for a short period of time from October 1999 to September 2000 because I had read it was a dividend paying growth stock and a great investment. I lost some 30% on my investment. I sold because it doing badly and there was another stock I was interested in buying. Stock prices are relative. Yes, I sold this at a loss, but was able buy another stock for a very good price.
The problems I find with this stock is that it is just masquerading as dividend paying stock and it is almost 90% owned now by Maple Leaf Foods. Why I say it is masquerading as a dividend paying stock? This company last increased it dividend in 1992. I live off my dividends income, so if I stock cannot over the long term increase their dividends at least in line with inflation; I do not consider them to be a true dividend paying stock. I do not insist that stock I own raise their dividends yearly, but I do expect them to be raised over the long term.
I still follow this stock as it is recommended by investment newsletters that I like, but currently I personally would not buy it. This stock has not done well over the last 5 years, but has done much better over the last 10 years. If you look at total returns for the last 5 and 10 years, the returns are 2.6% and 13.9% per year respectively. However, the portion of the total returns due to dividend income is about ½ of 1% for the last 5 years and just under 1% for the last 10 years.
For this stock, the Liquidity Ratio has often been low, but for the 2nd quarter of 2010 it is at a more respectable 1.11. The Asset/Liability Ratio has always been much, much better and is currently 4.15, although the 5 year average is lower at 3.29. Anything over 1.50 is good. The last thing to mention today is that the Return on Equity has a 5 year average at 11%, which is quite good. The current one, for the 2nd quarter is lower at 8.6%.
As I said previous, I am not interested in this stock because it is not a exactly dividend paying one, but I am following it as it is one mentioned by a number of conservative investment newsletters.
Canada Bread is a leading manufacturer and marketer of value-added flour based products, including fresh bread, rolls, bagels and sweet goods, frozen partially baked or par-baked breads and bagels, and specialty pasta and sauces. The Company markets products under a number of leading brand names, including Dempster’s, Olafson’s, POM, Ben’s and Olivieri. Canada Bread has operations in Canada, the United States and the United Kingdom. The Company is 89.8% owned by Maple Leaf Foods Inc. Its web site is here Canada Bread. See my spreadsheet at cby.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 problems I find with this stock is that it is just masquerading as dividend paying stock and it is almost 90% owned now by Maple Leaf Foods. Why I say it is masquerading as a dividend paying stock? This company last increased it dividend in 1992. I live off my dividends income, so if I stock cannot over the long term increase their dividends at least in line with inflation; I do not consider them to be a true dividend paying stock. I do not insist that stock I own raise their dividends yearly, but I do expect them to be raised over the long term.
I still follow this stock as it is recommended by investment newsletters that I like, but currently I personally would not buy it. This stock has not done well over the last 5 years, but has done much better over the last 10 years. If you look at total returns for the last 5 and 10 years, the returns are 2.6% and 13.9% per year respectively. However, the portion of the total returns due to dividend income is about ½ of 1% for the last 5 years and just under 1% for the last 10 years.
For this stock, the Liquidity Ratio has often been low, but for the 2nd quarter of 2010 it is at a more respectable 1.11. The Asset/Liability Ratio has always been much, much better and is currently 4.15, although the 5 year average is lower at 3.29. Anything over 1.50 is good. The last thing to mention today is that the Return on Equity has a 5 year average at 11%, which is quite good. The current one, for the 2nd quarter is lower at 8.6%.
As I said previous, I am not interested in this stock because it is not a exactly dividend paying one, but I am following it as it is one mentioned by a number of conservative investment newsletters.
Canada Bread is a leading manufacturer and marketer of value-added flour based products, including fresh bread, rolls, bagels and sweet goods, frozen partially baked or par-baked breads and bagels, and specialty pasta and sauces. The Company markets products under a number of leading brand names, including Dempster’s, Olafson’s, POM, Ben’s and Olivieri. Canada Bread has operations in Canada, the United States and the United Kingdom. The Company is 89.8% owned by Maple Leaf Foods Inc. Its web site is here Canada Bread. See my spreadsheet at cby.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.
Saturday, September 4, 2010
Friday, September 3, 2010
Calloway Real Estate Inv Trust 2
I do not own this stock (TSX-CWT.UN). I already have enough REITs stocks, as I currently hold both RioCan (TSX-REI.UN) and CDN Real Estate (TSX-REF.UN). These two are still on the dividend lists I follow of Dividend Achievers and Dividend Aristocrats (see indices). I also follow H&R Real Estate (TSX-HR.UN). See my website for stocks followed for all these companies.
Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. Calloway and CDN have DBRS ratings of STA-3H and RioCan has a rating of STA-2M. DBRS rates bonds and income trust companies on a scale from 1 to 5, 1 being the highest rating. You can go to DBRS to find their ratings. Enter your company’s name and do a search to see if the company you are interested in has been rated. In depth research cost money, but you can get a simple rating from them for free.
If you invest in a REIT, you will want one that increases their dividend at least as high as inflation over the last 5 years. You would want one with a DBRS rating of at least STA-3. In addition to the scale from 1 to 5, you get a qualifier of H (high), M (medium) and L (low). You also do not want one that pays out too high a percentage of its Distributable Cash (DI) or Funds from Operations (FFO). Over 90% is too high.
Now, back to the REIT I am discussing today. The Insider Trading report shows that there is a bit of Insider Buying and a bit of Insider Selling. There is slightly more selling, but this report does not really tell us anything. The real thing of note is that Calloway has just issued 6.9M shares at $21.60 as of August 5, 2010.
When talking about the P/E ratio, it is so high it is not worth talking about. The Price/FFO ratio is 14 when the 5 year average is 13.5. I get a Graham Price of $10.27 and a stock price of $23.25. So the stock price is some 55% above the Graham Price. When looking at the Price/Book Value Ratio, I get one of 1.74 and the 10 year average of 1.25 is about 40% lower. The current yield of 6.7% is lower than the 5 year average of 7.7%. So, on all these points, the stock price is rather high.
When I look at analysts recommendations, there are a few Strong Buy, a few Buy and lots of Hold recommendations. (See my site for information on analyst ratings.) The main reason for Hold recommendations is that a lot of analysts feel that the stock is fully valued. They give a 12 month stock price below or at the current stock price. One thing that is liked about this company is its relationship with Wal-Mart. Calloway is expanding in Canada, which has at present a better economy than the US. (RioCan in contrast is currently expanding in the US.)
Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway. See my spreadsheet at cwt.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.
Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. Calloway and CDN have DBRS ratings of STA-3H and RioCan has a rating of STA-2M. DBRS rates bonds and income trust companies on a scale from 1 to 5, 1 being the highest rating. You can go to DBRS to find their ratings. Enter your company’s name and do a search to see if the company you are interested in has been rated. In depth research cost money, but you can get a simple rating from them for free.
If you invest in a REIT, you will want one that increases their dividend at least as high as inflation over the last 5 years. You would want one with a DBRS rating of at least STA-3. In addition to the scale from 1 to 5, you get a qualifier of H (high), M (medium) and L (low). You also do not want one that pays out too high a percentage of its Distributable Cash (DI) or Funds from Operations (FFO). Over 90% is too high.
Now, back to the REIT I am discussing today. The Insider Trading report shows that there is a bit of Insider Buying and a bit of Insider Selling. There is slightly more selling, but this report does not really tell us anything. The real thing of note is that Calloway has just issued 6.9M shares at $21.60 as of August 5, 2010.
When talking about the P/E ratio, it is so high it is not worth talking about. The Price/FFO ratio is 14 when the 5 year average is 13.5. I get a Graham Price of $10.27 and a stock price of $23.25. So the stock price is some 55% above the Graham Price. When looking at the Price/Book Value Ratio, I get one of 1.74 and the 10 year average of 1.25 is about 40% lower. The current yield of 6.7% is lower than the 5 year average of 7.7%. So, on all these points, the stock price is rather high.
When I look at analysts recommendations, there are a few Strong Buy, a few Buy and lots of Hold recommendations. (See my site for information on analyst ratings.) The main reason for Hold recommendations is that a lot of analysts feel that the stock is fully valued. They give a 12 month stock price below or at the current stock price. One thing that is liked about this company is its relationship with Wal-Mart. Calloway is expanding in Canada, which has at present a better economy than the US. (RioCan in contrast is currently expanding in the US.)
Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway. See my spreadsheet at cwt.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, September 2, 2010
Calloway Real Estate Inv Trust
I do not own this stock (TSX-CWT.UN). I already have enough REITs stocks, as I currently hold both RioCan (TSX-REI.UN) and CDN Real Estate (TSX-REF.UN). This stock used to be on the dividend lists that I follow. However, it has been pulled from both of these lists as it has not increase dividends since 2008.
I updated my spreadsheet in June 2010 for the financial year ending in 2009. At that time analysts’ figures suggested that this stock will have just an ok year. The only thing that has changed is that the price of this stock has gone up. None of the estimates for earnings, cash flow or distributable cash has changed.
There are a couple of good things about this stock. One is that they are growing their revenue. Without revenue growth, they cannot grow their dividends, earnings, cash flow etc. Even this year, looking at the revenues for the 2nd quarter, the Revenue per Share has gone from $4.65 to $5.37. The other thing is that the total return on this stock over the last 5 years is over 8% per year. Considering we are in a recession, this is very good.
There are also things that are not so good about this stock. One thing that is not so good is that the Distributable Cash is not expected to grow much over this year and next and therefore, the dividends can not grow either. The other thing is that Book Value has been growing very slowly, at about 3% per year over the past 5 years. This is because the company is paying out a very high proportion of their Distributable Cash (or Funds from Operations as it is now called.) They will have to earn more money to restart dividend increases. Although, I must say that the 6.7% current yield is quite good.
There are a number of analysts following this stock and tomorrow, I will talk about what they say.
Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway. See my spreadsheet at cwt.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 updated my spreadsheet in June 2010 for the financial year ending in 2009. At that time analysts’ figures suggested that this stock will have just an ok year. The only thing that has changed is that the price of this stock has gone up. None of the estimates for earnings, cash flow or distributable cash has changed.
There are a couple of good things about this stock. One is that they are growing their revenue. Without revenue growth, they cannot grow their dividends, earnings, cash flow etc. Even this year, looking at the revenues for the 2nd quarter, the Revenue per Share has gone from $4.65 to $5.37. The other thing is that the total return on this stock over the last 5 years is over 8% per year. Considering we are in a recession, this is very good.
There are also things that are not so good about this stock. One thing that is not so good is that the Distributable Cash is not expected to grow much over this year and next and therefore, the dividends can not grow either. The other thing is that Book Value has been growing very slowly, at about 3% per year over the past 5 years. This is because the company is paying out a very high proportion of their Distributable Cash (or Funds from Operations as it is now called.) They will have to earn more money to restart dividend increases. Although, I must say that the 6.7% current yield is quite good.
There are a number of analysts following this stock and tomorrow, I will talk about what they say.
Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway. See my spreadsheet at cwt.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, September 1, 2010
Bell Aliant Regional Communications Income
I got some of this stock (TSX-BA.UN) from BCE in July 2006. I never bought it. I sold what I got in January of 2008. My total return, including dividends, is a negative 4.8% per year. I did not like this stock then and I still do not like it.
I will not take up a lot of anyone time in reviewing this stock and I will just have one blog entry for it. One thing I do not like is the accounting. I find that some make no sense. You have two companies being reported on, the Income Fund and the Limited Partnership Holdings. I am not sure how to read these reports and what figures to use. Maybe if I spend some more time on their statements, I may be able to figure out more, but there are better companies that have more straightforward accounting in comparison. Point is, is it worth my while to spend more time on this company. Problem is I feel it isn’t.
I know that the distributable cash looks good, but this will not count after this year, as the company will be a corporation. Distribution must come down, because, as a corporation, they cannot give out too much of their cash flow. They are distributing a high percentage, and if analysts are to be believed, they will distribute in 2010 more than 80%. This is not good.
There are a number of analysts following this stock. They give recommendations of Strong Buy, Buy, Hold, Underperform and Sell. The vast majority is a Hold and the consensus recommendation would be a Hold. (See my site for information on analyst ratings.) No analyst expects this company to earn in 2010 what it did in 2009 and ditto for 2011.
This is not a stock I would care to own. I am tracking it because I once had some and there are still lots of analysts following it. If feel that it is sometime good to follow stocks you do not like as well as stocks you do. Investing is always a learning process.
Aliant is one of North America's largest regional communications providers serving customers in six Canadian provinces with information, communications and technology services, including voice, data, Internet, video and value-added business solutions. Through their information technology division, xwave, they also provide IT professional services in Canada and the United States. Bell Aliant derives virtually all of its income from its indirect ownership in Bell Aliant Holdings LP. Its web site is here Bell Aliant. See my spreadsheet at ba.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 will not take up a lot of anyone time in reviewing this stock and I will just have one blog entry for it. One thing I do not like is the accounting. I find that some make no sense. You have two companies being reported on, the Income Fund and the Limited Partnership Holdings. I am not sure how to read these reports and what figures to use. Maybe if I spend some more time on their statements, I may be able to figure out more, but there are better companies that have more straightforward accounting in comparison. Point is, is it worth my while to spend more time on this company. Problem is I feel it isn’t.
I know that the distributable cash looks good, but this will not count after this year, as the company will be a corporation. Distribution must come down, because, as a corporation, they cannot give out too much of their cash flow. They are distributing a high percentage, and if analysts are to be believed, they will distribute in 2010 more than 80%. This is not good.
There are a number of analysts following this stock. They give recommendations of Strong Buy, Buy, Hold, Underperform and Sell. The vast majority is a Hold and the consensus recommendation would be a Hold. (See my site for information on analyst ratings.) No analyst expects this company to earn in 2010 what it did in 2009 and ditto for 2011.
This is not a stock I would care to own. I am tracking it because I once had some and there are still lots of analysts following it. If feel that it is sometime good to follow stocks you do not like as well as stocks you do. Investing is always a learning process.
Aliant is one of North America's largest regional communications providers serving customers in six Canadian provinces with information, communications and technology services, including voice, data, Internet, video and value-added business solutions. Through their information technology division, xwave, they also provide IT professional services in Canada and the United States. Bell Aliant derives virtually all of its income from its indirect ownership in Bell Aliant Holdings LP. Its web site is here Bell Aliant. See my spreadsheet at ba.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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