Tuesday, April 10, 2012

Canam Group Inc 2

I took Easter Monday off from blogging because I never got to take it when I was working. You get a double whammy if you work and have children. Schools and daycares are closed (at least daycares in downtown Toronto are because they are run by unionized workers). I always had to scramble to find someone to look after my son on that day. At least now I do not automatically get stress out by the mere mention of Easter Monday.

I have a US Trading Account. I used to have US stocks, but have not had any for some time. I just have one stock in this account, which is ADR of Barclay’s Bank. Barclay’s Bank has restarted dividend payments so I had a bit of cash there. I today put this money into TD Dow Jones Index (US) –E (TSX- TDB953). This is a no load fund with very low MER. TD makes you agree on purchase to a “minimum holding period”, but it does not tell you what that is.

I finally tracked now the prospectuses of TD Mutual Funds on on their web site. This is no easy task. I could not find them on TD’s site and had to Google “Prospectus TD Mutual Funds” to find them. In the “Part A” they talk about Short-Term Trading and there it says how long you need to hold their funds. Which is 90 days for e-series (what I got) or 60 days for all others but MMF and TD Short Term Investment Class. If you have to agree to this before purchasing, you would think that they would make the information easy to find and not practically impossible to find. Nowhere is there the term “minimum holding period” on their site. I could not find it and Google could not find it.

Ok, let us go to the stock I want to talk about today, which is Canam Group Inc. (TSX-CAM) a stock I bought in November 2011 as a short term investment. I wanted to review it after the December 2011 financials were in. Since I bought shares in this company, they are up 30%. These shares, like the TSX has been going down over the past few days. I will probably hold until they start to pay dividends again. I do not expect this to be a permanent investment.

After my November 2011 blog on this company there was lots of insider buying, $3.3M of it and there was a very little of insider selling. When I blogged before on this stock there had been just minor amounts of insider buying and insider selling. The company has been busy buying back shares. (It is not often when a company buys back stock at good prices.) The company has options, but overall, insiders own lots more shares than options. This is what I like to see.

There are 18 institutions who own some 44% of this stock. Over the past 3 months they have bought and sold, but there have been fewer buyers than sellers. Also, institutions shares have decreased by 14.3% over the past 3 months. This is not a good sign, but then institutions have been known to be herd followers.

The 5 year median low and high Price/Earnings Ratios on this stock are 9.38 and 16.60. The current P/E is 33.93. This is because no one expects much in the way of earnings for this company this year. P/E goes to 12.84 and then to 9.13 compared to expected earnings for 2013 and 2014. However, a current P/E of 33 is high.

I get a current Graham Price of $5.11 and the current stock price of $4.75 is 7% lower. The median difference between the Graham price and stock price is the stock price being some 33% lower than the Graham price. So this shows a relatively current high price.

Then we get into some good news on the share price. The 10 year Price/Book Value Ratio is 1.00. The current P/B Ratio of 0.57 shows a very good price. The good price is shown by the fact that the current P/B Ratio is only 57% of the 10 year median ratio. It is also shown by the fact that the book value of $8.60 is higher than the stock price.

I cannot talk about dividend yield as this company has suspended dividends because of financial difficulties.

When I look at analysts’ recommendations, I find Strong Buy, Hold, Underperform and Sell. It is interesting there is no Buy recommendation. The consensus recommendations would be a Hold. A Hold recommendation comes with a 12 months stock price of $5.12. Analysts talk about the strong balance sheet and high book value (compared to stock price). They also talk about the fact that 60 to 70% of the business is in the US. Everyone thinks that the company has excellent management.

The blogger Value Vestor talks about his investment in this company on his blog entry dated December 2011. The blogger Investing Obtusely has an interesting perspective of this company in his blog of November 2011.

At the moment I will hold on to the stock I have.

Canam Group specializes in the design and fabrication of construction products and solutions for the commercial, industrial, institutional, multi-unit residential, and bridge and highway infrastructure markets. This company has offices in Canada, US, Saudi Arabia, United Arab Emirates, India, Romania France and China. Its web site is here Canam. See my spreadsheet at cam.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.


  1. Do you still like Barclay's? It was down more than 5% today, I tried to pick up a little but my order didn't get filled.

  2. Can you say more about why you no longer have US stocks.

  3. US Companies:
    Because of currency fluctuations, I opened a US Currency Trading Account to hold US stocks in 1997. Also, the US stock exchange gave you access to foreign stocks via ADRs. I lost money in 2000 bear market and then from around 2003 our currency made a steady rise against the US currency. I had shares in World Com and that when bankrupt.

    I never had a lot in my US account and it never accounted for more than 10% of my portfolio. It was a lot of work to keep track to the US market as well as the Canadian market. I had always and still do read international news, but you need more than that to invest in a foreign market.

    It is not that I no longer have international exposure. But I have taken a different tack. I invested in Canadian companies that do international business and I had done better in these than US stocks or foreign stocks.

    Barclay’s Bank
    I am still holding on to Barclay’s, but no matter what an individual European Bank does, I cannot imagine any European bank, nor any European bank stock doing well over the short term. Europe is in such deep problems and I do not imagine they are going to get solved anytime soon.

    EU has not even solved the problems in Greece, let alone problems of the rest of Europe. The US and Canada are only relatively better off. We have deep debt problems also.