Monday, January 28, 2013

Metro Inc 2

On my other blog I am today writing about the planning in retirement with stock funds...continue...

I own this stock of Metro Inc. (TSX-MRU, OTC-MTRAF). I bought this stock in 2004 for my Trading account. I have made a return of 18.36% on the stock I bought in 2004. Only 1.95% is attributable to dividends and 16.41% is attributable to capital gains.

When I look at insider trading I find some $6.3M of insider selling and not insider buying. Some 1.7M of this insider selling was by the CEO. It would seem insiders are selling off options. Under this company insiders not only have options but also Performance Share Unit (PSU) and Deferred Stock Units.

The CEO has shares worth $9M and options worth $36.7M. The CFO has no shares worth and options worth $1.7M. An officer has shares worth $0.5M and options worth $2.3M. A director has shares worth $0.2M and has options worth 0.6M. This is just to give you an idea on insider share ownership and option values.

The 5 year low, median and high median Price/Earnings Ratios are 9.08, 10.93 and 12.78. The current P/E is 12.81 based on a stock price of $64.96 and 2013 earnings of $5.07. I get a Graham Price of $54.65. The 10 year low, median and high Price/Graham Price Ratios are 0.88, 1.03 and 1.14. The current P/GP Ratio is 1.19.

I have a 10 year median Price/Book Value per Share Ratio of 2.09 and a current P/B Ratio of 2.48. The current one is some 18% higher than the 10 year median ratio. The 5 year median dividend yield is 1.6% and the current dividend yield is 1.32% a value some 17% lower than the 5 year median.

All my stock price check shows that the current stock price is higher than the historical high median price. It is not a lot higher, but these tests do show that the stock price is relatively high.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation would be a Buy. (But the rating is getting close to a Hold.) (See my site for information on analyst ratings.)

The 12 months consensus stock price is $61.50 and this implies a loss of 4% with capital loss at 5.33% and dividend income at 1.32%. Although one analyst with a Hold rating expected a 12 month stock return of 1.2%.

There is a concern with the partial sale of Alimentation Couche-Tard Inc. (TSX-ATD) stock that Metro will no longer be able to grow their EPS like they have in the past little while. This company is admired, but a couple of analysts with a Hold recommendation thought the stock price was a bit too high.

People are wondering what the company will do with the cash they got from Couche-Tard. See Financial Post article.

I notice that the Accrual Ratio is rather high at 5.83% and this is a negative. It suggests that stock should be sold.

I will hold on to the shares I currently own. I do not sell shares because they are a bit overpriced. The market tends to under and over price stocks all the time and I feel that it would be foolish to sell a stock simply because it is currently overprice. I would end up doing a lot of trades if I did this.

For me this has been a good investment. I feel that it is currently price too high for buying.

Metro is a leader in the food and pharmaceutical sectors. It operates a network of close to 600 food stores under the banners Metro, Metro Plus, Super C, A & P, Dominion, Loeb and Food Basics. It has 250 pharmacies under the banners Brunet, Clini Plus, The Pharmacy and Drug Basics. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro. See my spreadsheet at mru.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.

No comments:

Post a Comment