Wednesday, June 19, 2013

Lassonde Industries 2

On my other blog I am today writing about Investment Woes...continue...

I do not own this stock of Lassonde Industries (TSX- LAS.A, OTC- LSDAF). I started to follow this stock in February 2010 because of a favorable report I read about this stock in the Advice Hotline emails from MPL Communications. Their site is here where you can subscribe to this email.

When I look at insider trading I find no insider selling and no insider buying. There are two classes of shares. Class A shares, which are sold on the stock exchange, are single voting shares. Class B shares are multiple voting shares. Pierre-Paul Lassonde owns 100% of the Class B shares. If valued at the same price as Class A shares, they would be worth around $322M.

There seems to be no stock options. Other insider own some Class A shares, but not very much of these shares. The main insider owner is Pierre-Paul Lassonde.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.06, 11.13 and 12.34. The current P/E Ratio is 12.98, based on a stock price of $85.70 and a 2013 earnings estimate of $6.60. The current Graham Price is $82.00. The 10 year low, median and high median Price/Graham Price Ratios are 0.83, 0.93 and 1.05. The current P/GP Ratio is 1.05. Both these measure put the stock price just north of the reasonable range.

The 10 year median Price/Book Value per Share Ratio is 1.79. The current P/B Ratio is 1.87. The current ratio is just 6% higher than the P/B Ratio. The 5 year median dividend yield is 1.95%. The current dividend yield is at 1.82%, a value just 6.5% higher. Both these test place the stock price within the reasonable range and just a bit higher than the median.

Since the P/B Ratios and Dividend Yield test do not use estimates like the P/E Ratio and the P/GP Ratio, they often are considered more reliable. These tests suggest that the stock price is just above the median level and would be considered reasonable.

I can only find one report on this stock, dated May 8, 2013 from MPL Communications which says that "Lassonde remains a buy for long-term share price gains and increasing dividends". It also appears the stock price is reasonable. This is a dividend growth company and that is good. It is also a family owned company. Family owned companies often have solid balance sheets as this one does.

However, it is small, so it is more risky than other consumer staple stocks. See my spreadsheet at las.htm.

This is the second of two parts. The first part was posted on Tuesday, June 18th, 2013 and is available here.

Lassonde Industries Inc. is a leading manufacturer of pure fruit juices and fruit drinks in Canada, and the largest manufacturer and distributor of apple juice in Eastern Canada. Through its subsidiaries, Lassonde is active in the processing, packaging and marketing of food products such as pure fruit juices, fruit and citrus drinks, the canning of corn on the cob for foreign markets as well as dipping sauces, fondue bouillon, meat marinades, barbecue sauces and baked beans. The Company also markets its know-how in Canada and abroad. Its web site is here Lassonde.

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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