IBI Group Inc.

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

I do not own this stock of IBI Group Inc. (TSX-IBG, OTC-IBIBF). I have had this stock on my list to investigate for some time. What finally prompted me set up a spreadsheet on this stock was an investment report I read in March of 2011. I will continue to follow this stock to see how it all turns out.

This first thing to discuss is dividends. This firm was started in 1974 and it had its IPO in 2004, when they also started to declare dividends. At that time it was an income trust so the initial dividend yield was high with the yield being in the 9% to 11% range. They changed to a corporation in 2011 and decreased the dividend by some 31%. Unfortunately, they had negatives earnings in 2012 and 2013 and cut their dividends to zero in 2013.

Of course dividends are not the main problem. In 2013, the liabilities were higher than the assets and so this company has a negative book value. In 2014 the company renegotiated their credit facilities and revised the terms of their outstanding debentures.

On the other hand, analysts seem to feel that the company is moving forward. It is felt it will again have positive earnings. They also feel that the company will have a positive book value again in 2016. Most seem to feel by the estimates given that 2013 was the bottom for this company.

The third quarter results seem to bear this out, with rising revenue, positive earnings and cash flow. The stock price has also begun to rise with it up by some 177% this year.

This company has been beaten up. The P/E Ratio is 12.84 based on a stock price of $2.44 and 2014 earnings of $0.19. They have a good chance of getting to this EPS as the EPS so far this year , at the end of the third quarter is $0.17.The P/E Ratio for 2015 is very low at 6.10 based on a stock price of $2.44 and EPS estimate of $0.40.

At the end of their third quarter, the company has cash that equals 24% of the stock price with $0.53 cash per share and share price at $2.44. This would effectively make the stock price $1.91 with a P/E of 4.78.

The structure of this company is rather complex, but basically there is an Management Partnership that effectively holds some 40% of voting shares of the company on a partially diluted basis, assuming the exchange of the Class B partnership units for common shares of the company.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $3.42. This implies a 40% total return, all from capital gains.

On the Digital Journal site there is an announcement of IBI Group's third quarter results for 2014. According to Market Watch investors of IBI Group are organizing for the purpose of determining whether IBG's management exercised its fiduciary duty. According to Sleek Money BNS lowered their price objective on this stock.

Sound bit for Twitter and StockTwits is: Beaten up company. Anyone buying shares in this company are, of course, taking a risk. However, if all works out, there could be nice profits to have. See my spreadsheet at ibg.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

IBI Group Inc. is an international, multi-disciplinary provider of a range of professional services focused on the physical development of cities. The Company through IBI Group provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development (urban land, building facilities, transportation networks and systems technology.) Its web site is here IBI Group.

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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