Automodular Corp.

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.

First, I have invested very little in this stock, only around $1,000. It is small and it might be broken up when the Ford contract ends. However, the management is looking around for things to invest in. Most of the money I have made on this stock has been in dividends.

I have made a total return of 21.49% per year with 18.42% from dividends and 3.07% from capital gains. The 5 and 10 year total return on this stock is 87.71% and 13.15% per year. Of the total return 33.53% and 4.14% per year is attributable to capital gains over the past 5 and 10 years. Of the total return 54.18% and 9.01% per year is attributable to dividends over the past 5 and 10 years.

As far as dividends go, the company has been inconsistent. They have paid dividends when they can and have paid special dividends when they can. However, I would not consider dividends from this stock dependable. And there is that other thing that it might go out of business soon.

The outstanding shares have decreased by 5.7% and increased by 3.6% per year over the past 5 and 10 years. Outstanding shares have increased due to stock options and decreased due to Buy Backs. Revenue has fluctuated, but they have done well in increasing EPS and CFPS over the past 5 years, but not so much over the past 10 years.

If you use 5 year running average revenue per share is up by 1.1% and down by 1.3% per year over the past 5 and 10 years. EPS is up by 76% and 2.4% per year if you use 5 year running averages. CFPS is up by 8.2% and 1.1% per year over the past 5 and 10 year using 5 year running averages.

This company has had a number of years with earning losses. When they have had income, the Return on Equity has been good. The ROE for 2013 was 24%. The ROE on comprehensive income was close at 24.5%.

This small cap has great debt ratios. The Liquidity Ratio for 2013 is 3.75 and the Debt Ratio is 4.07. The Leverage and Debt/Equity Ratio are 1.35 and 0.35.

I plan to hold on to my shares until the end. The other thing is that they have in cash around $2.05 per share. With a current share price at $2.25, the cash is equal to 91.2% of the share price. See my spreadsheet at am.htm.

This is the first of two parts. The second part will be posted on Friday, May 29, 2014 and will be 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.

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