Tuesday, November 5, 2013

PFB Corp 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 PFB Corp (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term if the company is successful.

The insider trading report says that there was no activity over the past year. This does not tell us much. Most people quote insider ownership at 70%. I cannot find any analysts that follow this stock, so I do not have any estimates for this year or next.

I looked at Price/Earnings Ratios without those for 2012 as the P/E was very high in 2012 on account of the fact that earnings were extremely low for 2012. These are close to the 10 year P/E Ratios, so I am using the 10 year low, median and high median P/E Ratios which are 12.26, 14.28 and 17.23. The current P/E Ratio, based on last 12 months earnings to June 2013 is 6.08. This shows a cheap current stock price.

I get a Graham Price of $10.72. The 10 year low, median and high median Price/Graham Price Ratios are 0.75, 0.93 and 1.10. The current P/GP Ratio is 0.47. This low ratio suggests that the stock price is relatively low.

The 10 year median Price/Book Value per Share Ratio is 1.17 and the current P/B Ratio at 0.82 is some 70% of the 10 year P/B Ratio. This stock price test suggests that the stock price is relatively cheap. It is also cheap on absolute terms as the stock is selling below the book value.

The 5 year median dividend yield is 3.98% and the current dividend yield is 4.75%, a value that is 19.5% higher. This stock test suggests that the stock price is a relatively good or cheap stock price. If you look at the historical dividend yield, the stock price is cheap on a historical median basis, but not on an historical low basis.

There is a Forbes item on this stock in May of this year that gives a positive view of this stock. There is a rather negative remark on Stockhouse about their company. The comment is basically that the current management has no clue how to build this company. If they did they would have done so by now. This stock is talked about by Tom Konrad Altenergy Stock site. He said that he added to his position with the stock price at $5.00.

If you are going to take a chance on a struggling company that will probably recover, this would be a much better one that IBI Group that I recently reviewed. The company is acting more sensibly. Debt Ratios are good. Goodwill is very low as a percentage of Market Cap. They have kept the dividend level until they are sure that they can raise it permanently. However, they did give out a special dividend in 2013 as they felt they could afford to. See my spreadsheet at pfb.htm.

This is the second of two parts. The first part was posted on November 4, 2013 and is available here.

PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. Its web site is here PFB Corp.

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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