Wednesday, January 18, 2012

Cinram Intl Inc

I do not own this stock (TSX-CRW.UN), but I used to. This is a company that seems to be able to reinvent itself. It has done this before. I bought it in Feb 2000 for $8.50 when it was recovering from a crash and then sold it $26 in June 2007 because I thought it was in problems again. It sure was as it crashed again by the end of 2007 and stopped the distributions. It is now trading at $.03 per share.

Recently the company has issued new units to pay off part of their debts. See G&M article. The company has also formed another partnership. See G&M article.

There is no point in talking about growth because it has none. However, it still has over a $1B of revenue. It made a profit in 2010, but it is not expected to make one in 2011 or 2012. It also made no profit in 2007, 2008 or 2009. It had cash flow until 2010 when that turn negative also.

The company has had no positive earnings for 2011 so far and not much good news in cash flow either. Analysts expect both negative earnings and negative cash flow in 2011 and 2012.

Book Value is negative in 2010 having turned negative in 2009 and it was also negative with the latest quarterly reported of June 2011.

The 2010 Liquidity Ratio was 1.03 and the Asset/Liability Ratio was 0.99. These have gone down and currently the ratios are 0.74 and 0.81. This means that the assets cannot cover the liabilities.

The company had cash or cash equivalents totaling $164M at the end of 2010. However, the latest statements for the third quarter of 2011 gives cash or cash equivalents as $36.5M. So they are running through their cash.

When I look at analysts’ recommendations, I find Buy, Hold, Underperform and Sell. The consensus would be an Underperform.

However, I intend to keep an eye on it as it might become a good investment in the future again.

Cinram has facilities in North America and Europe. It manufactures and distributes pre-recorded DVDs, Blu-ray Discs, audio CDs, CD-ROMs and digital content for motion picture studios, music labels, publishers and computer software companies around the world. Cinram also provides distribution and logistics services to the telecommunications industry in North America through its wireless subsidiaries. The Cinram group of companies now also incorporates 1K Studios, a digital media firm based in Los Angeles. Its web site is here Cinram. See my spreadsheet at crw.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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