Friday, February 18, 2011

McCoy Corp 2

This is a stock (TSX-MCB) I have been tracking, but until yesterday, I had not owned. I came across and started to track this stock when I was looking for a filler stock for left over money in my TFSA after I bought the main stock I wanted.

When I look at the insider trading report, there was a tiny amount (less than $1,000) insider buying late last year. There is no other insider buying or insider selling. It would also seem from the report that recent options granted have been retained. The other positive thing is that the dividends have been reinstated. The company feels that have enough cash flow for this.

This is a more positive view than I had for Nordion Inc when it restated its dividend. This is because for Nordion, the dividend was generous and I wondered about affordability of the new dividend for the company. For Nordion, it just seemed that the dividend was a ploy to get conservative investors to buy the stock. I certainly wondered if Nordion would be a good investment or not.

When I look at the Price/Earnings Ratio, I find that there is a 5 year median low of 5.6 and a 5 year median high of 17.5. This is an unusually wide spread. The current P/E Ratio based on a stock price of $4.00 is 10.3 and this is a little lower than the 5 year average of 11.5. I think that this points to a current reasonable stock price.

When I look at the Graham Price, I get a current one of $4.30 and the stock price at $4.00 is some 7% below this. This also points to a current reasonable stock price. The low Graham Price spread is -22%, but the average is 45%. The high Graham Price spread is 114%. So this also points to a reasonable stock price.

The 10 year Price/Book Value Ratio is 2.43 and the current P/B Ratio is 72% lower at 1.76. This points to a reasonable stock price also. The only ratio that does not show a current reasonable stock price is the yield. The current one is 1% and the 5 year average is 1.9%. However, they have just reinstated the dividend, so it is not surprising it is low.

There are not many analysts following this stock. The only recommendations I find is Strong Buy and Buy. The consensus is probably a Buy. (See my site for information on analyst ratings.) I see that analysts remark that this company is the world's largest manufacturer of drilling tongs for oil rigs. They also mention that it has very little debt. This stock gets a mention in the Canadian Tech Letter as a stock that doubled in 2010. See Can Tech.

As I had said before, this is a filler stock for me. It is of interest because it is a small cap dividend paying Canadian Stock.

McCoy provides innovative products and services to the global energy industry. McCoy's two segments, Energy Products & Services and Mobile Solutions, operate internationally through direct sales and distributors with its operations based out of the Western Canadian Sedimentary Basin and the US Gulf Coast. McCoy's corporate office is located in Edmonton, Alberta, Canada with offices in Alberta, British Columbia, Louisiana, and Texas. Its web site is here McCoy. See my spreadsheet at mcb.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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