Friday, May 30, 2014

Automodular Corp. 2

I own this stock of Automodular Corp. (TSX-AM, OTC-AMZKF). I went looking for some dividend paying small cap to soak up extra money in the TFSA. This is one of the stocks that I found.

The insider trading report for the past year shows $0.4M of insider buying and $0.4M of insider selling. There is a bit of extra selling so there is a net of sales. There is some insider ownership with a director owning around 13% of the outstanding shares worth around $6.3M and the CEO owning 2% of the company worth around $1.0M. Also Franklin Templeton Investments Corp. owns around 4.5M shares worth around $11M and around 23% of the outstanding shares.

It is hard to do a price analysis based on Price/Earnings per Share Ratios. The P/E has been very low lately range from 1.33 to 4.69. The current one is probably around 4.33, a very low P/E also. This is based on a current stock price of $2.25 and the 12 month EPS of $0.50 ending at the first quarter of 2014.

I get a current Graham Price of $5.47. The 10 year low, median and high median Price/Graham Price Ratios are 0.21, 0.41 and 0.61. These are very low numbers. The current P/GP Ratio is 0.41 based on a stock price $2.25. This stock price test would suggest that the stock price is relatively reasonable. On an absolute basis, any P/GP Ratio at 1.00 and below says that the stock is at a very good price.

I get a 10 year Price/Book Value per Share Ratio of 0.90. The current P/B Ratio is 0.96 a value some 7% higher. The P/B Ratios are quite low. This stock price test would suggest that the stock price is relatively reasonable. On an absolute basis, a P/B Ratio below 1.00 says that the stock is cheap.

The 5 year median dividend yield is 10.56% and the current dividend yield is about 1% higher at 10.67%. This stock price test would suggest that the stock price is relatively reasonable. The dividend yield is quite high. On an absolute basis, a dividend yield of 10.56% says that the stock is cheap.

On an historical basis, the average dividend yield is 6.5% a value some 64% below today's dividend yield. The historical median dividend yield is 5.45% a value even lower and some 95% lower than today dividend yield. This stock price testing says that the stock is relatively cheap.

There is a wonderful analysis of this company at Wikinvest. There is another good article on this stock at Seeking Alpha by Alec Mazo. Elliot Luchansky on Guru Focus give this stock a Strong Buy rating and a 12 month stock price of $5.65.

I am very interested to see how this all plays out. I am keeping my shares because that will make what happens to the company all the more interesting to me. Both the Wikinvest and Seeking Alpha analysis see this stock producing a nice return for shareholders. We will see. See my spreadsheet at am.htm.

This is the second of two parts. The first part was posted on Thursday, May 30, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

Automodular Corporation is a sequencer and sub-assembler of components and modules that are installed in cars and trucks made by North American Original Equipment Manufacturers ("OEMs"), at plants in Canada. Its web site is here Automodular 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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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