TransForce Inc 2

I am putting up on my other blog my notes from the World Money Show 2013 in Toronto. I will put up these notes as I transcribe them here.

I do not own this stock TransForce Inc. (TSX-TFI, OTC-TFIFF). I read a report called "6 Canadian Dividend Stocks That Fly Under the Radar" by John Heinzl in April of 2013. See the report here. This is one of the stocks mentioned. There was also a good review of this stock by Advice Hotline by MPL Communications. This Advice Hotline emails can be subscribed for free at MPL Communication's site.

When I look at insider trading, I find $0.8M of insider buying and $1.8M of insider selling with a net insider selling of $1.0M. Lately insiders have been retaining their options. The company has been buying back shares for cancellation. The only significant item in shares and options is the CEO who has shares worth $96.7M and options worth $49.3M.

The 5 year low, median and high median Price/Earnings ratios are 8.84, 10.79 and 12.75. The current P/E ratio is 15.60 based on a stock price of $23.09 and 2013 earnings estimate of $1.48. This stock test shows that the stock price is relatively high.

I get a Graham Price of $16.64. The 10 year low, median and high median Price/Graham Price Ratios are 0.80, 1.02 and 1.20. The current P/GP Ratio based on a stock price of $23.09 is 1.39. This stock test also shows that the stock price is relatively high.

The 10 year Price/Book Value per Share Ratio is 1.99. The current P/B Ratio is 2.78 a value some 40% higher. This stock test says that the stock price is relatively high.

It is only really fair to look at the dividend yield after the decrease for the change of the company to a corporation. The 3 year median dividend yield is 3.33%. The current dividend yield at 2.25% is 33% lower. This stock price test also says that the stock is relatively high.

When I look at the analysts' recommendations, I find Buy and Hold recommendations. There are more Buy recommendations that Hold recommendations. The consensus recommendation would be a Buy. The 12 months stock price consensus is $23.50. This is a total return of 4.03%, with 2.25% from dividends and 1.78% from capital gains.

An article in the G&M says that TransForce is exiting the Canadian oil rig-moving business to focus on U.S. This is to stem losses. The company just announced 3rd quarterly result in a newswire release.

They also just announced an 11.5% increase in dividends start in 2014. However the new dividend yield at 2.51% is still 25% lower than the 3 year median dividend yield of 3.33%. So the stock price is still relatively high. The blogger Average Dividend Yield thought that the stock price in September 2013 was too high.

I think that that the stock price is too high. See my spreadsheet at tfi.htm.

This is the second of two parts. The first part was posted on Wednesday, October 30, 2013 and is available here.

TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce companies service the following segments: Package and Courier; Less-Than-Truckload; Truckload, which includes specialized truckload and dedicated services; Specialized Services, which includes services to the energy sector, waste management, logistics and ancillary transportation services. Its web site is here TransForce.

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.