Wednesday, January 30, 2013

Shaw Communications Inc 2

On my other blog I am today writing about my Canadian Bank picks...continue...

I do not own this stock of Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). They on the dividend lists that I follow of Dividend Achievers (see resources) and Dividend Aristocrats (see indices). I have followed this company for some time.

This is interesting and something I have not seen for a while, there is insider buying at $23.5M. Insider selling is $4.9M and net insider buying is $19.6M. CEO insider's buying is at $9.2M and officers' insider buying is at $14M and there is a small amount of directors' insider buying.

Insider buying is mostly, but not completely was in the early part of 2012 at stock prices of $19 to $20. There also a bunch of insider buying just recently at $23 to $24. Insider selling is by officers at $4.4M and a small amount of directors' insider selling for total insider selling at $4.9M. The insider selling seems to be because of stock options.

I get 5 year low, median and high median Price/Earnings Ratios of 14.06, 16.52 and 17.90. The current P/E ratio is 14.60, towards the low end of this range. The P/E of 14.60 is based on a stock price $23.50 and a 2013 EPS of $1.62. This low P/GP Ratios suggests that the stock price is reasonable.

I get a Graham price of $17.22. The 10 year low, median and high median Price/Graham Price Ratios are 1.47, 1.66 and 1.92. The current P/GP Ratio is 1.36. This ratio is also towards the low end of these ratios. This low P/GP Ratios suggests that the stock price is reasonable.

I get a 10 year median Price/Book Value per share Ratio of 3.39 and a current P/B Ratio of 2.89. The current ratio is some 85% of the 10 year ratio and suggests that the stock price is reasonable. (The current P/B Ratio would have to be just 80% or below of the 10 year ratio for the stock price to be cheap.

The current dividend yield is 4.34% and the 5 year median dividend yield is 4.22%. The current yield is 2.8% higher than the 5 year dividend yield. This suggests that the stock price is reasonable.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. However, most are in the Hold category and the consensus recommendation would be a Hold recommendation. The 12 months consensus stock price is $22.60. This would be zero gains, with dividends covering the capital loss.

There is a financial post article about the chairman and founder J. R. Shaw recently buying shares in this company. There was speculation that he was doing this because some large institutional client may have been selling shares. Zacks says why they think this stock is a buy.

One analyst said he only expects modest growth going forward with the company. One analyst thought Shaw was losing market share to Telus (TSX-T). This is discussed in this Financial Post article and also in this article.

My analysis shows that the stock price is reasonable. Analysts do not expect this company to do well this year. However, the first financial report for November 2012 was good. The 12 months EPS was $1.67 compared to a 2013 consensus EPS from analysts of $1.62. No one can tell the future, but I doubt there is much downside risk for this stock.

Shaw Communications Inc. is a diversified communications company whose core business is providing broadband cable television, Internet, digital phone and satellite direct-to-home services. Industry: Communications & Media (Cable). SJR.B shares are non-voting and the SJR shares are voting shares. Its web site is here Shaw Communications. See my spreadsheet at sjr.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.


  1. Susan, your evaluations are second to none. Thanks for doing what you do. All the best!

  2. I sold out of sjr.b recently. (I guess that means it will spike up sharply any day now!) I just don't see enough room for growth in what they seem to be doing. It was interesting to read your opinions.