Tuesday, August 14, 2012


I own this stock (TSX-TCS). I came across it last year when I was looking for a dividend paying small cap stock. Such stocks are, of course, risky.

Since I bought this stock I have made a return of 12.97% per year with 3.42% per year coming from dividends. The capital gain portion is 9.55% per year. This has been held for a short period so per year increases can be misleading. My stock is up 14% since I bought it. This is not bad considering that in the same time period the TSX is down 11.7%.

Dividends have only been paid for 4 years and the growth rate is quite good at 10.7% per year. You should note that this company pays dividend on a semi-annual basis rather than the more common quarterly basis. Dividend yield is moderate at 2.74%. Dividend Payout Ratios are fine with 4 year median DPRs for Earnings at 40% and DPRs for cash flow at 35%. The DPRs have been growing and those for the financial year ending in April 2012 were 67% for earnings and 42% for cash flow.

Revenue growth is ok with growth for the last 5 and 10 years at 4.9% and 6.4%, respectively. The revenue per share growth is better at 8.5% and 9.2% per year, respectively. The difference is because the company has been buying back shares. Shares have decreased by 3.2% and 2.5% per year over the past 5 and 10 years. This means that the per share value growth is probably showing a bit better than actually occurred.

Before 2008, the company showed no profit. Because of this I only have growth statistics for 4 years on this company and last year it made the same amount as it did in 2008 so there is no growth. However, EPS did grow in 2009 and 2010 and then fell. Analysts expect the EPS to grow over the next couple of years.

For cash flow per share, I have a maximum of 8 years of positive data, so the 5 and 8 year growth is at 70% and 13% per year, respectively. The book value per share growth is not great. Book value tends to decline when earnings are negative. The 5 year growth is 5.9% per year. There is no 10 year growth as book value declined at the rate of 3.9% per year over the past 10 years.

The Return on Equity is nothing to write home about. The ROE for the end of April 2012 financial year was 6.8% and the 5 year median ROE is a little higher at 8.6%. Comprehensive income is the same as net income.

The Liquidity Ratio comes in a little low at 1.45. However, a large part of the current liabilities is due to deferred revenue. This is done because it is not certain if all of the deferred revenue will be kept. The result is that Liquidity Ratio is probably showing lower than what it actually is.

The Debt Ratio is very good at 2.24. The reason that this is so good is that the company basically has no debt outside current liabilities. This also reflects what I have found that is common with companies with insider owning large amounts of shares. If you look at insiders with large amount of shares, they collectively hold 37% of the outstanding shares in this company.

I am pleased with the performance of this stock. I have always had a soft spot for tech stocks. At the moment I am going to hold on to this stock.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS. See my spreadsheet at tcs.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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