TECSYS Inc 2

I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have. However, in the end I did not buy it was a filler stock, I bought it for my trading accounting as a small cap dividend paying growth stock.

When I look at insider trading, I find $0.5M of insider selling and no insider buying. The Brereton family owes some 46% of the outstanding stock. The biggest holder is David Brereton with 31% of the outstanding shares. The company has been buying back shares.

The CEO has shares worth $1.7M and has options worth $0.3M. The CFO has shares worth $0.2M and has no options. An officer has shares worth $14.3M and has no options. The other officer has shares worth $0.2M and has some options. A director has no shares and has some 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 per Share Ratios are 13.33, 15.21 and 17.08. The current P/E Ratio is 21.26 based on a stock price of $4.04 and 2014 earnings of $0.19. (Note that the annual financial year is April each year so last financial year was April 2013 and next is April 2014.)

I get a Graham Price of 2.39. The 10 year low, median and high median Price/Graham Price Ratios are 0.94, 1.19 and 1.46. The current P/GP Ratio is 1.69 based on a $4.04 stock price. The 10 year median Price/Book Value per Share ratio is 1.60. The current one is 3.03, a value some $90% higher.

The 5 year median dividend yield is 2.71%. The current dividend yield based on no increase in dividends this year is just 1.73, a value some 30% lower. If you consider a dividend increase for this year of 10% you have a current dividend of 1.91%, a value some 23% lower than the 5 year median dividend yield. If you consider a dividend increase for this year of 16.67 (same as last year), the dividend yield would be 2.02%, a value some 18% lower than the 5 year median dividend yield.

This article talks about a $.4m overrun on an LCBO warehouse system that was to cost $1.55M. This is a huge overrun. However, the article sights LCBO changing specs. I worked on IT projects and I know from experience that if you want to bring in a project on time and on budget, you never allow users to change specs once you have a budget and timing set. (I was in a company where this happened on a project. We ended up calling the project a black hole.)

There is an article on So-Co-IT site about TECSYS expanding its footprint in hospitals with a major product for the operating room. This company also got a positive review on CanTech.

There is only one analyst following this stock and he gives the stock a Buy recommendation. The 12 months consensus stock price is $4.75. This implies at least a 19.31% return with 17.57% from capital gains and at least 1.73% from dividends.

It would seem no matter how you look at this stock, the price is relatively high. This is a tech stock and maybe setting some new highs. The P/E high last year was 45.63 and the P/E low was 26.38. On the other hand, the fall is coming and for the stock market the fall can be a time of new stock market lows. I am not, at present, in a hurry to buy more of this stock.

I would pay more attention to dividend yield than other measures. This company gives out a dividend in mid-September each year. It is this dividend that generally has the increase. So stay tuned. See my spreadsheet at tcs.htm.

This is the second of two parts. The first part was posted on Monday, August 12th, 2013 and is available here.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

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.