Monday, April 29, 2013

Thomson Reuters Corp 2

On my other blog I am today writing about Median Calculations ...continue...

I own this stock of Thomson Reuters Corp (TSX-TRI, NYSE-TRI). I have held this stock since 1985 and have made 7.03% total return per year with 3.21% per year from capital gains and 3.82% per year from dividends. This is not a great showing, but it is acceptable given the current economic climate.

When I look at insider buying, I find $5.8M of insider buying and 1.2M of insider selling. We have net insider buying of $4.6M. All of the buying is by directors and the selling is by officers. Insiders not only have options, but option like vehicles called Deferred Share Units and Restricted Share Units.

The CEO has shares worth $5.9M and has options are worth $78M. The CFO has shares worth $1.4M and has options worth $20.3M. An officer has shares worth $0.2M and has options worth $8M. A director has shares worth $0.6M and has no options. 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 14.46, 18.38 and 22.30. The current P/E Ratio is 25.2 based on 2013 earnings estimates of $1.32 US$ or 1.34 CDN$ and a current stock price of $33.72 CDN$. This would suggest that the stock price is relatively high. (However, P/E Ratios are decreasing as the 10 year high median P/E is 25.93.)

I get a Graham Price of $25.17. The 10 year low, median and high median Price/Graham Price Ratios are 1.26, 1.50 and 1.64. The current P/GP Ratio 1.34 and this suggests a reasonable price.

I get a 10 year median Price/Book Value per Share Ratio of 1.59 and a current P/B Ratio of 1.60. These ratios are almost identical and they suggest that the stock price is reasonable.

I get a 5 year median Dividend Yield of 3.60% and a current dividend yield of 3.91%. The current dividend yield is above the 5 year median dividend yield by 8.5% and this is good. However, the current dividend yield is not higher by a lot and current dividend yield suggests a reasonable stock price.

When I look at the analysts' recommendations, I get Strong Buy, Buy, Hold and Underperform recommendations. There are a lot of analysts following this stock. The consensus would be a Hold and most analysts' recommendation on this stock is a Hold. The 12 month consensus stock price is $31.30. This is below the current stock price and implies a loss of 3.27%, with 3.91% from dividends and a capital loss of 7.18%.

The Wall Cheat Sheet blogger talks about Analysts expectations for earnings declining. This is true as analysts expect both lower earnings and lower revenue for 2013. The Passive Income Earner blogger has reviewed this stock in January of this year and the review is a bit negative also.

I plan to hold on to my current shares. Analysts do feel that 2013 will not be a great year for this company, but expect things to improve in 2014 and 2015. I must admit that I have heard this before on this stock. But we are in tough economic times and the company is holding its own. It may be a buy if things do improve over the next while. I think that you would need to see this company's stock cheap before it would be a good buy at present. It is encouraging to see insider buying. See my spreadsheet at tri.htm.

Thomson Reuters Corp is the leading source of intelligent information for businesses and professionals. The company delivers this must-have insight to the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world's most trusted news organization. They derive the majority of their revenues from selling electronic content and services to professionals, primarily on a subscription basis. Its web site is here Thomson Reuters.

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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