Thursday, October 27, 2011

Evertz Technologies 2

I now own this stock (TSX-ET). I got idea to investigate this stock from a G&M Article. See G&M. As I mentioned at the end of blog of yesterday, I did buy some of this stock yesterday.

A couple of things stand out. One is that there is lots of insider ownership. Over 73% of this company is owned by insiders (there is two big insider owners). There has been some insiders buying and insider selling, but of very limited amounts. Institutions (some 20) own another 5%. This means that there is not much to trade and it probably makes the company a bit illiquid. Over the past 3 months, institutions have marginally increased their shares in this company. The other thing that stands out is that the company is doing a lot of buying back of company shares.

The stock had a recent low of $11.21 in mid-October and it has been climbing ever since and it is up almost 20% to date. The stock is also up more than 5% just today. I have a 5 year low median Price/Earnings of 13.01 and a 5 year high median P/E of 19.62. For today’s price of $13.34, the P/E is on the low side at 13.75.

I get a Graham Price of $10.43. The stock price of $13.34 is some 28% higher. However, on a relative basis the average difference between the Graham price and the stock price is the stock price being 50% higher. I get a 5 year Price/Book Value Ratio of 4.60 (which I must admit is a bit high). However, the current one of 2.67 is fine. On a relative basis, the current P/B Ratio is lower than the 5 year average by just over 60%, which shows a relatively good stock price.

The current dividend yield of 3.6% is higher than the 5 year median yield of 1.96. However, they have been increasing the dividend quite rapidly and the latest was a 20% increase. (The median dividend increase is 22% per year.) By all these measures the current stock price looks reasonable. How long this will be is hard to determine. However, I would think that the price could go to $20 before the stock would be considered to be a bit pricey.

When I look at analysts’ recommendations I find Strong Buy, Buy and Hold. The consensus recommendation would be a Buy. (There is nothing unusual here.) This is not a well followed stock, but the blog Canadian Dividend Stock has a recent write up on this stock. He feels that the company has good growth potential, but will not have long term stability. (Personally, I think you have to keep an eye on tech stocks, you can make money on them, but their situation can change fast.)

Blogger Tech Vibes has a different opinion. He thinks that Evertz is undervalued and we should buy it because it has a good financial history. He thinks investors looking for long term profitability in a stock should look at this one, as well as 3 other Canadian Tech stocks.

Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz . See my spreadsheet at et.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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