Tuesday, November 20, 2012

Calian Technologies Ltd 2

I own this stock of Calian Technologies Ltd (TSX-CTY). I first bought this stock in May of 2011 and then bought some more in April of 2012. To date I have made 18.18% per year with 17.6% from capital gain and 0.58% from dividends. It is not that dividends are low, as the 5 year median dividend yield is 5.23%, but it is just that this is a fast rising company.

When I look at the insider trading reporting I find no insider buying and insider selling is at $0.8M. Selling is by everyone but the CFO and it appears to be people cashing in their options. Options are often thought of as part of insider salaries.

There are not only options, but also Deferred Share Units. There are options outstanding and insiders seem to have more options that shares, generally, and there are not a lot of options outstanding. The CEO has shares worth $1.6M and options worth around half that.

The 5 year low, median and high median Price/Earnings Ratios are 9.54, 10.23 and 10.90. There is little variation in these values. The current P/E at 11.28 is a bit higher. However, a P/E of 11.28 is not a high P/E.

I get a Graham Price of $19.11. The 10 year low, median, high median Price/Graham Price Ratios are 0.84, 0.95 and 1.07. The current P/GP Ratio at 1.08 shows that the stock price is slightly high. But here again, a 1.08 P/GP Ratio is not that high.

I get a 10 year Price/Book Value per Share Ratio of 2.25. The current one is 2.33 and is 3% higher. This shows the stock price to be relatively slightly higher than the median stock price.

I get a 5 year median dividend yield of 5.23%. The current yield is 5.42% which is some 3.7% higher. This suggests a slight better than median stock price.

When there is conflict about the price, generally you go with the dividend yield test. However, all these tests show that the stock price is relatively at an median price. So, the stock price would be reasonable.

When I look for analysts' recommendations there seems to be only one analyst following this stock and the recommendation is a Hold. The 12 month stock price is $23 and this implies a total return of 16.8% with 11.38% from capital gains and 5.42% from dividends.

The blogger Smart Amateur explains, in the early part of this year, why he thinks that this stock is a Hold. Recently, Happy Capitalism has said that he thinks the stock will pull back and provide a good entry point.

The Happy Capitalism blogger may have a point. This is November and often stocks pull back in November before a general year end rise.

Calian sells technology services to industry and government in Canada and around the world. Calian provides customers with ready access to an exceptional team of engineers, telecommunications and technology professionals, health care professionals and other highly qualified staff. Its web site is here Calian. See my spreadsheet at cty.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 or StockTwits.

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