Thursday, August 21, 2014


I own this stock of TECSYS Inc. (TSX-TCS, OTC-TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

Dividends were started in 2008 and they have grown at 13.4% and 11% per year over the past 5 and 7 years. The current dividend yield is 1.31% and the 5 year median dividend yield is 2.64%. So the dividends are moderate to low and the increases are moderate. The last dividend increases was in 2014 and it was for 12.5%. At the same time dividends payments were changed from semi-annual to quarterly.

The 5 year median Dividend Payout Ratios for EPS was 47% and for CFPS was at 26.5%. The DPRs for 2014 was at 47% and 22% for EPS and CFPS. (Note that the financial year ends in April each year and the last financial year was for April 2014.)

I bought this stock in 2011 and I have made a total return of 46.65% per year with 43.66% from capital gains and 2.99% from dividends. I have had this stock for under just 3 years. The 5 and 10 year total return for shareholders is at 29.18% and 17.53% per year. The portion of these returns attributed to dividends is at 2.04% and 1.20% per year over these periods. The portion of these returns attributed to capital gains is at 27.14% and 16.33%per year over these periods.

The outstanding shares have decreased by 1.7% and 2% per year over the past 5 and 10 years. Shares have increased for Stock Options and decreased by Buy Backs. There has been growth in revenues, earnings and cash flow and the best growth is over the past 10 years, not the past 5 years.

Revenue growth is at 2.6% and 10.25% per year over the past 5 and 10 years. Revenue per Share is up by 4.3% and 12.5% per year over these periods. Revenue hit a high in 2009 and did not surpass this high until 2013.

Earnings are up by 2.5% and 15.8% per year over the past 5 and 10 years. EPS is up by 5.9% and 18.2% per year over these periods. Earnings hit a high in 2010 and are expected to pass this high in the April 2015 financial year.

Cash Flow up by 10% and 11.6% per year over the past 5 and 10 years. CFPS is up by 11.8% and 12.8% per year over these periods. Cash flows hit a high in 2008 and just pass this high with the financial year of April 2014.

As far as Return on Equity goes, it has been at 10% or above only 3 times in the past 10 years and only twice in the past 5 years. The ROE for the financial year ending April 2014 was 10.8% and the 5 year median is 8.6%. The ROE on comprehensive income is the same as for net income so this suggests that the EPS are of good quality.

There was a lot of earning losses prior to 2008. The company was hit by the last recession and did not return to ROEs above 10% until this year. The ROE is expected to be above 10% also in next year.

The debt ratios are good, but I would like to see the Leverage and Debt/Equity Ratios a bit lower. The Liquidity Ratio is 1.53. The Debt Ratio is 1.95, quite a good value. The Leverage and Debt/Equity Ratios are at 2.06 and 1.06.

Sound bit for Twitter and StockTwits is: Dividend Growth Stock, Tech Small Cap. This stock got hit with hard by the last recessions and revenue, earnings and cash flows fell. The share price also tanked and that is why I have done so well in this stock. I got it at a rather cheap price. See my spreadsheet at tcs.htm.

This is the first of two parts. The second part will be posted on Friday, August 22, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

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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