Wednesday, May 4, 2011

Calian Technologies Ltd 2

This is an interesting small cap company (TSX-CTY) with a very nice dividend. As I said yesterday, this stock was on a Globe Investor Number Cruncher is an investment column. See column called Where ‘debt’ is a dirty word . The Financial Blogger has this stock on his Top Ten Canadian Dividend Stocks list.

On the Insider Trading report, you can see several things. First, there has been, over the past year some $3.5M of insider selling. Most of the selling is by one officer who holds just under 3% of the shares of this company. No other insider holds anywhere near this amount of shares. Recent stock options granted have been retained mostly. The company is buying back shares and over the past 3 years has reduced outstanding shares by just under 8% and just under 3% per year.

In looking at this report, I see that insiders have more shares than options and I like this. Another interesting thing is that just under 40% of the shares of this company are held by 7 institutions. Over the past 3 months, institutions have been net buyers of just over 3,000 shares. See Reuters.

When I look at the 5 year median Price/Earnings Ratios, I find them in a very narrow band. The 5 year low median P/E is 9.5 and the 5 year median high is 10.9. The current P/E Ratio at 11 is relatively high, but is not high in absolute terms. The 5 year median trailing P/E Ratios are from a low of 8.8 to a high of 12.2. The current trailing P/E Ratio is 10.8.

I get a current Graham Price of $17.43. The stock price of $18.86 is some 8.2% above this. Over the past 10 years, the median difference between the Graham Price and the stock price is the stock price being from 21% below the Graham Price to 11.1% above. The current difference is a bit closer to the high difference.

I get a 10 year median Price/Book Value Ratio of 2.21 and a current one of 2.27. The current one is almost 9% higher than the median ratio. The best indicator is the dividend yield. The current dividend yield is 5.3% and the 5 year median yield is 4.24. This is the one indicator that shows a relatively good current price. However, the company has just raised the dividend to get it above 5%.

As far as I can tell there is only one analyst that is following this stock and this analyst has a Buy recommendation on it and has had a Buy recommendation on it for sometime. The expected stock price in one year is $22.00. (See my site for information on analyst ratings.) Calian is considered a solid, stable, high-quality company that will grow slowly. This company has a lot of government contracts.

The TSI Network blog talks about Calian on April 11th 2011. This article points out that this company has lots of cash and no debt. There is also a discussion on this stock at Canadian Money Form. In the forum, people mainly talk about how illiquid the stock is. That is there are few buyers and sellers. And, there is an article on this company at Ottawa Business Journal. This article noted that government cost cutting could affect the company’s future revenue. Even Wikipedia has an entry for Calian.

This would be the sort of company you would buy for a decent dividend and decent future growth.

Calian sells technology services to industry and government in Canada and around the world. Calian provides customers with ready access to an exceptional team of engineers, telecommunications and technology professionals, health care professionals and other highly qualified staff. Its web site is here Calian. See my spreadsheet at cty.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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