Monday, December 31, 2012

Mullen Group Ltd 2

On my other blog I am today writing about being asked for money all the time continue...

I do not own this stock of Mullen Group Ltd (TSX-MTL, OTC-MLLGF). This is a small stock that I saw recommended in 2010. I have not invested in this stock, but I like to look at recommended small cap dividend paying stock to see if they would be a possibly good investment now or in the future. The other thing to mention about this stock is that it has converted from an income trust and has decreased it dividends.

Over the past year according to insider trading report, there was no insider selling and only $0.2M in insider buying. Both the co-CEOs have kept recently exercised options. The co-CEOs have more shares than options with one co-CEO having $53M in shares and $5.3M in options, and the other having $8.9M in shares and $1M in options.

The CFO does not have much in shares or options. The Directors have some shares and no options. Some 74 institutions hold 31% of the outstanding shares. Over the past 3 months they have reduced their shares by around 1%.

The 5 year low, median and high median Price/Earnings Ratios are 8.27, 11.94 and 15.73. The current P/E Ratio is 12.74 based on a stock price of $21.22 and 2012 earnings of $1.64. This shows that the stock price is reasonable, but not cheap.

I get a Graham Price of $19.34. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.09 and 1.35. The current P/GP Ratio is 1.10. This shows that the stock price is reasonable, but not cheap. (See my site for information on calculating Graham Price.)

I get a 10 year median Price/Book Value per Share Ratio of 1.61. The current P/B Ratio is 2.09, a value some 30% higher. This ratio suggests that the stock price is on the high side. However, the book value recently dropped due to the change in accounting rules to IFRS.

I get a 5 year median dividend yield of 4.44%. The current dividend yield at 4.71% is some 6% higher. This suggests that the stock price is relatively reasonable.

When I look at analysts' recommendations, I get Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation is a Hold. Most of the recommendations are in the Hold category. The 12 month consensus stock price is $24.10. This implies total returns of 18.28% with 4.71% from dividends and 13.57% from capital gains.

Even though analysts expect to see growth in earnings and cash flow for 2013, they seem to be cautious because this company is closely tied to the Oil Sands. They think that there is room for an increased dividend, but the company may be cautious about increasing the dividends because of uncertainty surrounding the Oil Sands. Analysts seem to think that the price will rise when this company increases the dividend. Analysts think of this company as being well managed.

However, for the company to do very well in the future oil prices need to rise and there needs to be more demand for gas. The company has recently agreed to provide oilfield services for oil and gas fields in the Northwest Territories. See truckers' forum.

There was some recent downgrades and upgrades to on this stock shown at Daily Political. The happy capitalism blogger also reviewed this stock within the past year.

This stock has a nice dividend of 4.7% and price is reasonable.

Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen. See my spreadsheet at mtl.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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