Tuesday, September 18, 2012

IBI Group Inc 2

I do not own this stock (TSX-IBG). This company used to be Partnership (TDX-IBG.UN), but changed to a corporation structure in January 2011 and decreased the distributions or dividends by 30% at the same time. This company only went public in 2004.

When I look at the insider trading report I find a small amount of Insider buying, mostly by the CEO. There is no insider selling. Net insider buying is $0.768M. This company seems now to give out options, but does have some Rights Deferred Units outstanding. Insiders seem to own more than 75% of outstanding shares.

There are some 9 institutions that own around 6% of the outstanding shares. Over the past 3 month they have increased their shares by 59% and this is a positive.

The 5 year low, median and high median Price/Earnings Ratios for this company is 11.26, 13.61 and 15.95. The current P/E is 9.83 based on 2012 earnings of $0.98 and stock price of $9.63. This would suggest that the stock price is relatively cheap.

I get a current Graham Number of $14.33 and the 10 year low, median and high median Price/Graham Price Ratios are 0.67, 0.88 and 1.11. Based on a stock price of $9.63, the current P/GP Ratio is 0.67. This low P/GP ratio suggests that the stock price is relatively good to cheap.

I get a 10 year Price/Book Value Ratio of 1.33 and a current one of 1.03. The current one is 78% of the 10 year ratio and this suggests that the current stock price is relatively cheap.

I get a 5 year median dividend yield of 9.17 and a current dividend yield of 11.46%. The current one is 25% higher than the 5 year median dividend yield and this suggests a relatively cheap stock price.

When I look at analysts' recommendations, I find that they are all over the place with recommendations of Strong Buy, Buy, Hold, Underperform and Sell. However, most are in the Buy category and the consensus recommendation would be a buy.

12 month stock price consensus is $12.30. The consensus 12 month stock price suggests a total return of 39.19% with 11.46% from dividends and 27.73% from capital gain.

There is an interesting article on a building designed by IBI group in Architecture Week. An article on Arch Daily talks about a building designed by IBI group at Cornell School Of Ecology. Another article at Manchester Evening News talks about IBI group buying a British firm.

I think that the price on this stock is very good. I think that it is a very good and well thought of company. However, I do have a concern about the high Dividend Payout Ratios and because of this I would treat this company with caution. High Dividend Payout Ratios shows that this company is a risky investment.

The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development (urban land, building facilities, transportation networks and systems technology). IBI Group Inc. holds an indirect 77% interest in IBI Group, a partnership (of a subsidiary of IBI Group Inc. and IBI Group Management Partnership). Its web site is here IBI Group. See my spreadsheet at ibg.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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