I own this stock (TSX-TIH). I first bought this stock in 2007 and then some more in 2008. My total return, if I exclude Enerflex is 9% per year. With Enerflex included my return is 7.4% per year. The problem with Enerflex is that Toromont did not have it for very long. Basically, I treating the money I got from it as a special dividend payment.
When I look at insider trading, I find that there is $3.1M of insider selling and a bit of insider buying with net insider selling at $2.7M. This is a lot of insider selling for a company this size. Insiders, not only have options but they have other options type units called Rights Deferred Share Units. Only the CEO and CFO have more options than shares. There are some officers with substantial shares.
There are some 51 institutions that hold 47% of the shares of this company. They have bought and sold shares over the past 3 months and have decreased their holdings by 2.3%. This is a negative.
My 5 year median low and high Price/Earnings Ratios are 11.86 and 15.96. The current P/E ratio of 15.16 would suggest a rather high current stock price. However, I do get a 10 year median P/E ratio of 14.98, which is not far from the current 15.16.
I get a Graham Price of $13.47. The low, median and high difference between the Graham price and stock price is the stock price being 7.9%, 29% and 52% higher than the Graham Price. The current stock price of 23.13 is some 72% higher than the Graham price. This also suggests the current stock price of 23.13 is rather high.
I get a 10 year Price/Book Value of 2.79 and the current P/B Ratio is 4.39. The current one is almost 60% higher than the 10 year ratio and suggests a rather high current stock price. However, you have to wonder how valid this test is for this stock as the book value did decline by 66% in 2011. The decline had mostly to do the purchase and sale of Enerflex.
The current dividend yield is 2.03% and the 5 year median dividend yield is 2.23%, about 7% higher. This would suggest a rather high current stock price. The current yield of 2.03 is not as low as the yield has gone as this stock has a 10 year median low dividend yield of 1.64%. Dividend yield was lower in the past.
When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus would be a Hold. The Hold recommendation comes with a 12 month stock price of $25.69 and a Buy with a 12 months stock price of $27. The price of $27 gives a P/E of 15.88 against the 2013 EPS estimates and within the historical P/E range. (True as my 10 year P/E range is 12.50 to 18.01.)
Some analysts prefer Finning (TSX-FTT) to this stock. Some liked it better before the Enerflex spin-off. There is some ambivalence to the spin-off of Enerflex. Others think it is good long term hold and will have increasing dividends in the future. One mentioned that there has been a recent run up in this stock and he did not expect much upside in the short term.
I am going to hold on to the shares I have. I think that I will do well in the long term on this company. I also do not expect much upside in the near future, but I do expect a good return over the long term.
There are two sections to this company. The Equipment Group is for Caterpillar dealerships. The Compression Group designs, engineers, fabricates and installs compression systems for natural gas, fuel gas and carbon dioxide. This last group also has industrial and recreational refrigeration systems. Its web site is here Husky. See my spreadsheet at tih.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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