Leon's Furniture Ltd 2

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I own this stock of Leon's Furniture Ltd (TSX-LNF, OTC- LEFUF). I first bought this stock in 2006 and then bought more in 2008, 2009 and 2010. I have made a return on my purchases of 4.61% with 1.28% from capital gains and 3.33% from dividends.

When I look at insider trading I find a small bit of insider buying and no insider selling. There is a large insider ownership of shares. The Leon family seems to own some 66% of the outstanding shares and there may be some 69% of insider ownership. Instead of stock options, insiders seem to get non-voting shares that can be converted to common shares.

The 5 year low, median and high median Price/Earnings Ratios are 11.99, 14.03, and 15.09. The current P/E Ratio is 11.39 based on 2013 EPS of $1.14 and current stock price of $12.99. This shows that the stock is reasonable.

I get a Graham Price of $12.82. The 10 year low, median and high Price/Graham Price Ratios are 1.06, 1.20 and 1.38. The current P/GP Ratio is 1.01 and this shows that the stock price is relatively cheap.

The 10 year Price/Book Value per Share Ratio is 2.33. The current P/B Ratio is 2.03. The current ratio is some 87% of the 10 year ratio. This shows that the stock price is relatively reasonable. (For the stock price to be relatively cheap, the current P/B Ratio should be 80% or less than the 10 year P/B Ratio.)

The dividend yield is 3.08% and the 5 year median Dividend Yield is 2.7%. The current yield is higher than the 5 year median dividend yield and this is good, but it is only some 15% higher, so this test is pointing to a reasonable stock price.

When I look for analysts' recommendations, I can only find one analysts' recommendation and that is a hold. However a number of people have remarked on its purchase of The Brick furniture company and feel that this is a very good move for the company.

The blogger Average Dividend Yield just added some more Leon's stock to his portfolio.

Leon's has purchased the outstanding shares of The Brick (TSX-BRK). There is also a story in the Calgary Herald on this take over. As a result Revenue (or Sales) and EPS is expected to increase in 2013 and 2014.

I know that I am not currently making much money on this stock, but it is a retail stock and we are in a tough economic climate at present. I feel that the stock price is low to reasonable, but it is not cheap. It is expected that Leon's will do not any special dividends until they have completed the integration of their Brick purchase. See my spreadsheet at lnf.htm.

This company sells home furnishings, appliances and electronics through a chain of retail facilities and franchises located in Canada. Leon family owns 68% of this company. Its web site is here Leon's.

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.