Friday, October 31, 2014

TransForce Inc. 2

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Kelley Wright.

I do not own this stock of TransForce Inc. (TSX-TFI, OTC-TFIFF). I read a report called "6 Canadian Dividend Stocks That Fly Under the Radar" by John Heinzl in April of 2013. This is one of the stocks mentioned. There was also a good review of this stock by Advice Hotline by MPL Communications.

When I look at insider trading I find net insider selling at $2.4M. This is around 0.1% of the stock's market cap and therefore is a small amount. There is some insider owner by the Chairman and CEO of the company which is worth around $110.9M. This is around 4.7% of the outstanding shares.

Outstanding shares were increase by around 463,000 in 2013 in connection with stock options. This number of shares is 0.5% of the outstanding shares and is therefore a small amount. The book value of these shares is $6M and the market value of these shares was around $11.7M at the end of 2013.

The 5 year low, median and high median Price/Earnings per Share Ratios are 9.53, 12.18 and 14.84. The 10 year corresponding ratios are a bit lower at 8.45, 10.77 and 13.09. The current P/E ratio is 18.62 based on a stock price of $27.74 and EPS estimate of $1.49 for 2014. This stock price test suggests that the stock price is relatively expensive. However, a P/E Ratio of 18.62 is not a particularly high P/E Ratios.

I get a Graham Price of $17.47. The 10 year low, median and high Price/Graham Price Ratios are 0.80, 1.02 and 1.20. The current P/GP Ratio is 1.59. . This stock price test suggests that the stock price is relatively expensive. However, a P/GP Ratio of 1.59 is not a particularly high P/GP Ratio.

The 10 year Price/Book Value per Share Ratio is 1.99 and the current P/B Ratio at 3.05 is some 53% higher. The P/B Ratio is based on a stock price $27.74 and PBPS of $9.10. This stock price test suggests that the stock price is relatively expensive.

The 5 year median dividend yield is 3.33% and the current dividend yield of 2.09% is some 37% lower. This stock price test suggests that the stock price is relatively expensive. It does not make sense to look at the historical dividend yields as this stock used to be an income trust. Income Trust companies had high dividend yields.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. Most recommendations are a Buy. The 12 month consensus stock price is $31.30. This implies a total return of 14.92% with 2.09% from dividends and 12.83% from capital gains.

A CTV News item talks about TransForce's takeover offer for the Ontario-based Contrans trucking group. An WKRB article talks about this company getting Buy ratings from 14 analysts. An article in Truck News talks about consolidation in the trucking industry, including TransForce making an acquisition.

Sound bit for Twitter and StockTwits is: Currently relatively expensive. Although stock price testing shows that that this company is currently relatively expensive, on an absolute basis, the ratios are not that high. See my spreadsheet at tfi.htm.

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

TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce companies service the following segments: Package and Courier; Less-Than-Truckload; Truckload, which includes specialized truckload and dedicated services; Specialized Services, which includes services to the energy sector, waste management, logistics and ancillary transportation services. Its web site is here TransForce.

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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