Friday, July 26, 2013

Evertz Technologies 2

On my other blog I am today writing about a silly anti-capitalist statement ...continue...

I own this stock of Evertz Technologies (TSX-ET, OTC-EVTZF). This company was founded in 1966, but it only went public in 2006. They started to pay dividends in 2008. I bought this stock in October 2011for my trading account. I have made a total return of 14.23% per year with 4.79% from dividends and with 9.44% from capital gains.

When I look at insider trading, I find $2M of insider selling and no insider buying. The CEO has shares worth $335.7M and has no options. The CFO has shares worth $0.1M and has options worth $0.6M. An officer has shares worth $32M and has options worth $1.4M. Another officer has shares worth $336.4M and has no options. A director has shares worth $0.4M and has options worth $0.6M. This is just to give you an idea on insider share ownership and option values. As you can see, there is a lot of insider ownership by a few insiders.

The 5 year low, median and high median Price/Earnings Ratios are 13.84, 16.47 and 19.02. The current P/E Ratio is 17.19. This ratio suggests that the current price is relatively reasonable. This is based on a stock price of $13.92 and EPS for 2013 of $0.81.

I get a Graham Price of $10.03. The 10 year low, median and high median Price/Graham Price Ratios are 1.30, 1.67 and 2.03. The current P/GP Ratio would be 1.39. This ratio also suggests a relatively reasonable price.

The 10 year Price/Book Value per Share Ratio is 3.46 and the current P/B Ratio is 2.52 a value some 73% of the 10 year ratio. This suggests a relatively cheap stock price. However, a P/B Ratio is not particularly low, so stock price might be considered to be reasonable.

The 5 year median dividend yield is 2.27% and the current dividend yield at 4.6% is 102% higher. This suggests that the stock price is very cheap. The dividends have been increasing faster than the stock price. Generally, stock prices tend to increase at the dividend increase rate. However, in this case, the dividend increases has coincided with increasing Dividend Payout Ratios. The DPR for earnings has increased by 30% and for cash flow by 26%. So the increase in dividend yield may not be as good as it first appears. So we might be back to a reasonable stock price.

When I look at the analysts' recommendations, I find Buy and Hold Recommendations. There are more Hold recommendations, so the consensus recommendation is a Hold. The 12 month stock price consensus is $15.40. This implies a total return of 15.23% with 4.6% from dividends and 10.63% from capital gains.

There are comments on this stock by blogger FSYard. A couple of analysts issued downgrades for this stock. CanTech has also recently commented on Evertz. Joe Zaller of Devoncroft comments on the most recent financial results.

I plan to hold on to my current shares. I expect to do well in the longer term on this tech stock. I feel that the current price is a reasonable one. See my spreadsheet at et.htm.

This is the second of two parts. The first part was posted on Thursday, July 25, 2013 and is available here.

Evertz Technologies Limited designs, manufactures and markets video and audio infrastructure equipment for the production, post production, broadcast and internet protocol television ("IPTV") industry. Its web site is here Evertz.

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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