Tuesday, June 26, 2012

Evertz Technologies 2

I own this stock (TSX-ET). I bought this stock in November 2011. I have a total return of 17.74% per year, with 3.81 of this return from dividends and 13.93% from capital gain. The dividends comprise of 21.5% of my total return. These values are to the end of May 2012.

According to the insider trading report, there is very minimal of insider buying and no insider selling over the past year. Looking at just the biggest insider holdings, the insider ownership comes 72%.

There are 25 institutions that own 6.41% of the outstanding stock of this company. Over the past 3 months their investment has gone up 0.8%. However, since I last looked at this stock 10 days ago, the institutional investment in this company has gone up 1.3%. These are modest amounts, but they do show confidence in this stock. However, do not forget that institutions have sold and well as bought this stock over the past 3 months.

The 5 year low, median and high Price/Earnings ratios are 11.85, 17.70 and 20.48. The current P/E ratio is 12.61 on a stock price of $12.86. This is between the low and median ratios and shows a reasonable stock price.

I get a Graham price of $9.64 and the 10 year low, median, and high Price/Graham Price Ratios are 1.36, 1.68 and 2.12. The current P/GP Ratio of 1.33 on a stock price of $12.86 shows a very good stock price because it is below the 10 year median low.

The 10 year median Price/Book Value Ratio is 4.03. The current P/B Ratio is 3.17 and only 78% of the 10 year median. When the current P/B Ratio is at 80% of less of the 10 year ratio, it means that the current stock price is very good.

The 5 year median dividend yield is 2.17% and the current one is 4.35%. The current one is double the 5 year median and shows a very good stock price. However, I think that I should point out a couple of things here. First the dividend has increased a lot since it was first issued.

The other thing is that when insiders hold a lot of shares and they have a strong balance sheet, such as the situation on this stock, the dividends may not be safe. If earnings falter, dividends could retreat until better times. I am not saying the earnings will falter and dividends will be cut. I am just saying this is a possibility.

We are in uncertain times and we may be going into another recession. I think that this is a good company and that the management will act prudentially for the long term health of this company. Analysts following this stock do not expect further dividend increases beyond $.56 for year ending April 30, 2013. (Dividends are ready up 21% from 2012).

When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Underperform. The consensus recommendation would be a Buy. Consensus 12 months stock price is $15.50. This implies a 12 months total return of 24.88%.

In Dividends and a dollop of growth: Mix well, Ian McGugan of Number Cruncher mentions this stock at G&M. There is also a March 2012 report by Raymond Jones Ltd.

Market Watch gives a review of April 30, 2012 results, together with financial statements on their blog. The site Seeking Alpha has a February 1st article on this company called “Evertz Technologies: Potential Catalysts, A Healthy Dividend Yield”. See their site.

It would appear that the current price is relatively good. I am pleased with my investment in this company and would be probably buying more in the future when I have some cash.

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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