I have followed this stock (TSX-PFB) for sometime. It is a stock that the Investment Reporter has recommended. The Investment Reporter is an MPL Communications investment letter. See Advise for Investors site and click on publications tab. Personally, I think that this company puts out some of the best in investor newsletters. This is a rather small company with a cap of around $38M. Insiders own just under 80% of the company.
The first think I like to look at is the Insider Trading report. What I find on this stock is that there has been no insider buying or insider selling anytime during the past year. However, there are a couple of things to point out. First both the CEO and the Directors have lots more shares than options. The other thing is that Insiders seem to be retaining the options granted last year. The company also has a share buyback plan and the outstanding stock is being reduced, but only marginally (less than 1%).
When looking at P/E Ratios, I get a 5 year median low P/E Ratio of 12 and a 5 year median high P/E Ratio of 17.5. The current P/E Ratio, based on last 12 months earnings is 17.2. I can find no estimates for 2011 and the company does not provide any guidance. So, on both a relative and absolute basis, a P/E of 17.2 is rather high. I can find nothing to give any indication on where earning might go in 2011.
In regards to the Graham Price, the one at the end of 2010 was $7.41. The current stock price of $6.19 is some 16% lower than this so this points to a current good price. However, the stock price, on average has been about 15% lower than the Graham Price. This makes the stock price look about average. The current yield at 4.2% is higher than the 5 year average of 3.2%. This would show a good current stock price.
The last thing I looked at was the Price/Book Value Ratio. The 10 year average was 1.18 and the current P/B Ratio is 0.85. There are two good things about this Ratio. The current one is some 71% lower than the 10 year average and the current one is below 1.00. This last item shows that the stock price is below the Book Value and this is usually a very good indicator that the stock price is low. So, most of these indicators show me a good current stock price.
I can only find one analyst’s recommendation and that recommendation is a Buy. (See my site for information on analyst ratings.) The comment that I see that the company is improving and is a long term buy for both dividends and capital gains. This company has a lot of insider ownership. The major owners, own some 77%, but there are lots of insiders with shares around 25,000.
Personally, I do not mind companies with lots of insider ownership. I think that they try harder to promote the long term growth for a company. I like companies that look for long term rather than short term growth. I also like companies that have good debt ratios like this company. This gives a company the ability to survive bad times. Let’s face it, there are going to be bad times. When investing in stocks, you only really lose big time when I company goes bankrupt.
It would be a company you would buy for long term gains and dividend income. However, as far a dividend income goes, you would have to be able to stand the inconsistency in dividend increases and special dividend payments.
PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB. See my spreadsheet at pfb.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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