Methanex Corp 2

I do not own this stock (TSX-MX). I first talked about this stock a year ago. It is a Canadian company with a global reach. It is also traded on NASDAQ as MEOH and its annual reports are in US$. They also pay dividends in US$. Today, I want to look at the share price, insider trading and what analysts say about this stock.

When I looked Insider trading last year, there was a bit of insider buying but no insider selling. It is quite different this year, as there is around $14.9M of insider selling and marginal insider buying. Most of the insider selling is by officers of the company. As I remarked last year, all insiders, except directors have lots more options than shares. As far as I can see there are no institutional shareholders.

When I look at Price/Earnings Ratio history, I find a 10 year median low P/E Ratio of 10.71 and 10 year median high P/E Ratio of 16.88. The current P/E Ratio of 12.52 is just lower than the median P/E Ratio of 13.72. I get a Graham Price of $25.35 and the current stock price of $24.34 is just 4% lower. The 10 year median difference between the Graham Price and the stock price is the stock price at 4% lower. Both these tests show an average stock price.

I get a 10 Year median Price/Book Value Ratio of 1.89 and a current P/B Ratio of 1.66. The current one is some 87% of the 10 year median ratio. The current yield is 2.79% and the 5 year median yield is 2.38%. Also, the 10 year median high yield is at 2.78%. My first test shows a good stock price, and my second test shows a very good stock price.

While it is great to pick up a stock you want at a very cheap price, it is not generally possible. What you need to aim at is a median price. This stock is certainly at that. Also, note that some dividend investors feel that the only good test is the dividend yield test, and by this measure, the stock is at a very good price.

When I look at Analysts’ recommendations, I find Strong Buy, Buy and Hold Recommendations. The analysts seem rather evenly spread over these three types. The consensus recommendation would be a Buy. The Buy recommendation comes with a 12 month stock price of $33.25.

Recommendations seem to depend on what analysts feel will happen to the Global economy. A Hold recommendation is made because of the dependence of this stock on the Global economy. A buy recommendations comes with positive comments on US economy (that it will be slowly growing) and the
European Economy will only have a mild recession.

What I did not like on this stock is the lack of growth of revenues, earnings and cash flow. Analysts generally expect this company to do better this year than last year and then do even better in 2012. The 12 months values to September 30, 2011, the 3rd quarterly results would seem to support this. The good thing about this stock is that the debt ratios and Dividend Payout Ratios are good. So, I can see why some analysts think that the stock is currently a buy.

Would Warren Buffett be interested in this company? See article in G&M.

Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex. See my spreadsheet at mx.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.