Tuesday, December 2, 2014

PFB Corp. 2

I do not own this stock of PFB Corp. (TSX-PFB, OTC-PFBOF). I am following this stock as I read a positive article on this stock in November 2009 and thought I would do a spreadsheet on it. This stock is a dividend paying small cap stock. The article said that this stock would be good for long-term gains and rising dividends. This is the thing with small cap stock; you can get a blend of capital gains and rising dividends in the long term if the company is successful.

When I look at insider trading I find no insider selling and no insider buying. There is some insider ownership with the Chairman and CEO owning shares worth around $14M, a director owning shares worth around 2.8M and Edward James Kernaghan, a 10% holding owning shares worth around $6M.

The 5 year low, median and high median Price/Earnings Ratios are 10.23, 12.51 and 14.79. The 10 year corresponding P/E Ratios are a bit higher at 11.16, 14.04 and 17.23. The current P/E ratio, using the last 3 months EPS and a stock price of $4.31 is at 18.74. This test suggests that the stock price is relatively high. On an absolute basis a P/E Ratio of 18.74 is not a high P/E Ratio.

I get a Graham price of $5.65. The 10 year low, median and high median Price/Graham Price Ratios are 0.72, 0.93 and 1.10. The current P/GP Ratio at 0.76 based on a stock price $4.31 says that the stock price is relatively cheap. However, the Graham Price has varied a lot with the last 3 years at $8.39, $1.02 and $12.03. If you remove the special gain from 2013's GP you get one of $4.29.

I get a 10 year Price/Book Value per Share Ratio of 0.90 and a current P/B Ratio of 0.70. The current P/B Ratio is based on a stock price of $4.31 and a BVPS of $6.17. The current P/B Ratio is 27% lower than the 10 year P/B Ratio. This test suggests that the stock price is cheap. Also a P/B Ratio of 0.70 is very low. It means that the stock price is lower than the company's theoretical break up price.

One problem with the P/B Ratios is that the Book Value (and BVPS) hit a peak in 2010 and has been tracking down hill since then. The BVPS is up by 2.7% per year over the past 10 years but it is essentially flat over the past 5 years.

The dividend yield test tells a good price story. The historically high Dividend Yield is 5.44% and the current Dividend yield is higher by 2.4% at 5.57% based on dividend of $0.24 and a stock price of $4.31. This test suggests that the stock is historically cheap.

There does not appear to be any analysts following this stock.

In June of this year, this company was named as one of 10 clean energy stocks for 2014 by Alternative Energy Stocks Alternative Energy Stocks site. There was recent insider buying by insider Edward James Kernaghan. This has not seemed to have shown up in the insider trading report.

Sound bit for Twitter and StockTwits is: Stock price is relatively cheap. This company has good debt ratios so it can withstand some hard times. The other notable thing is its willingness to reward shareholders when it has money as shown by a history of special dividends. See my spreadsheet at pfb.htm.

This is the second of two parts. The first part was posted on Monday, December 01, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

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.

PFB Corporation, through its wholly-owned subsidiaries, is a vertically-integrated manufacturer of proprietary insulating building products that are based on expanded polystyrene (EPS) technology. This expanded polystyrene (EPS) rigid insulation is used in a wide variety of residential and commercial construction projects across North America. It was founded in 1968 as Plasti-Fab Ltd, now a subsidiary of PFB. Directors and officers own 57% of the issued and outstanding common shares as of December 31, 2008. Its web site is here PFB 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.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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