McCoy Global 2

On my other blog I am today writing about the next market crash continue...

I own this stock of McCoy Corp. (TSX-MCB, OTC-MCCRF). I decided to try out McCoy. They had just restored their dividend. I want to use it as a fuller stock in my TFSA account. For me a fuller stock is one that uses up bits of extra money in an account.

When I look at insider trading, I find insider selling at $3.1M and insider buying at $0.6M with net insider selling at $2.5M. Insider selling represents 1.4% of the outstanding shares and is higher than what you generally see. (Insider selling is usually represents less a 1% of outstanding shares, normally.)

Insiders not only have options but Rights DSU (Deferred Stock Units). There is some insider ownership with the CEO having shares worth around $2.6M, a director having shares worth $1.4M and the Chairman having shares worth $0.4M.

The 5 year low, median and high median Price/Earnings Ratios are 6.78, 8.52 and 10.20. These are low P/E Ratios and lower than the 10 year P/E Ratios which are 6.82, 14.13 and 19.66. The 2013 P/E Ratio low, median and high median ratios were 11.53, 12.93 and 16.43. These ratios include ones that are negative, because there were some years of no earnings.

The current P/E Ratio is 12.52. This is not a very high P/E Ratio, but it is higher than the 5 year median high, but not the 10 year median high. In fact it is lower than the 10 year median value. It would appear that perhaps the P/E Ratio of 12.52 is reasonable. This ratio is based on a stock price of $6.51 and 2014 EPS estimate of $0.52. On an absolute basis, the P/E Ratio is 12.52 is a reasonable one. For it to be cheap, the P/E Ratio would have to be below 10.

I get a Graham Price of $6.17. The 10 year low, median and high median Price/Graham Price Ratios are 0.54, 0.95 and 1.40. The current P/GP Ratio is 1.06. By this stock price measurement, the stock price is relatively reasonable. On an absolute basis, the P/GP Ratio of 1.06 is reasonable. To be cheap, the P/GP would have to be 1.00 or lower.

The 10 year Price/Book Value per Share is 1.53. The current P/B Ratio is 2.02, a value some 31% higher. By this stock price measurement, the stock price is relatively high. On an absolute basis, a P/B Ratio is 1.50 shows a stock to be cheap. The P/B Ratio of 2.02 is a reasonable one.

The 5 year median dividend yield is 2.34% and the current dividend yield at 3.07% is some 31% higher. The historical average dividend yield is 3.02% a value 2% lower than the current dividend yield of 3.07%. The historical median dividend yield is even lower at 1.93% and 60% lower than the current dividend yield of 3.07%. These tests show that the stock price could be considered to be relatively expensive to relatively cheap.

If you look at the Price/Sales Ratio, the 10 year P/S Ratio is 0.74 and the current P/S Ratio is 78% higher at 1.31. This test says the stock price is relatively expensive. On an absolute basis the P/S Ratio would have to be 1.00 or lower for the stock price to be cheap. The P/S Ratio of 1.31 is a reasonable one.

Looking at the Price/Cash Flow per Share Ratio, the 10 year median P/CF Ratio is 8.07 and the current one is 11% higher at 8.92. This test says that the price is relatively reasonable but in the higher end of the reasonableness range. On an absolute basis, the P/CF Ratio would have to be 5.00 or less for the stock to be cheap. The P/CF Ratio of 8.92 is a little high.

The analysts' recommendations are Strong Buy and Buy. The consensus is a Buy. The 12 month consensus stock price is $7.85 and this implies a total return of 23.66% with 3.07% from dividends and 20.58% from capital gains.

The Edmonton Journal reports that after some disappointing quarters net earnings improve in the first quarter of 2014 for McCoy. The site Watch List News says that Raymond James restated their Buy (or Outperform) rating for McCoy recently. There is a two minute YouTube video from McCoy.

On a number of measures, the stock price comes out looking rather reasonable. See my spreadsheet at mcb.htm.

This is the second of two parts. The first part was posted on Tuesday, June 10, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

McCoy provides innovative products and services to the global energy industry. McCoy's two segments, Energy Products & Services and Mobile Solutions, operate internationally through direct sales and distributors with its operations based out of the Western Canadian Sedimentary Basin and the US Gulf Coast. McCoy's corporate office is located in Edmonton, Alberta, Canada with offices in Alberta, British Columbia, Louisiana, and Texas. They are growing internationally. Its web site is here McCoy.

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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