McCoy Global Inc. 2

On my other blog I am today writing about taxes on dividend income continue...

Sound bite for Twitter and StockTwits is: Stock price is probably reasonable. I would be inclined to go with the P/B Ratio test at present for this stock. Most of the other tests are based on estimates. For 2013 and 2014 analysts overestimated the Revenue and EPS values. Could they now be underestimating these values for 2015? See my spreadsheet at mcb.htm.

I own this stock of McCoy Global Inc. (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.

Over the past year there was in insider trading, $0.3M of insider buying and $3.3M of insider selling for a net of insider selling at $3M. This is some 2.3% of the outstanding market cap of this stock. This is a relatively high percentage for insider selling. Most of this selling was by Foundation Equity Corporation which is a Venture Capital investment fund.

There is some insider ownership with the CEO owing shares worth around $1.7M or 1.5% of the outstanding share and the chairman owing shares worth $0.3M and some 0.23% of the outstanding shares. Foundation Equity Corporation says they own 43% of this company. Burgundy Asset Management Ltd. also own shares and they have 9.67% of McCoy shares in their Canadian Small Cap Fund according to Morningstar Canada.

The 5 year low, median and high median Price/Earnings per Share Ratios are 6.78, 8.52 and 11.63. The 10 year corresponding figures are higher at 6.82, 11.30 and 15.44. The current P/E Ratio is 22.86 based on a stock price of $4.80 and 2015 EPS estimate of $0.21. This EPS estimate for 2015 I some 68% lower than the 2014 EPS of $0.65. The Trailing P/E Ratio is just 7.38, based on 2014 EPS of $0.65. The stock price testing using 2015 EPS estimate suggests that the stock price is relatively expensive.

I get a Graham Price of $4.27. The 10 year low, median and high median Price/Graham Price Ratios are 0.54, 0.86 and 1.35. The current P/GP Ratio is 1.12. This stock price testing suggests that the stock price is relatively reasonable.

I get a 10 year median Price/Book Value per Share Ratio of 1.41. The current P/B Ratio is 1.24 based on a stock price of $4.80 and BVPS of $3.87. This current P/B Ratio is some 12% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable.

I determine BVPS based on the Book Value divided by outstanding shares at the end of the year. I know that different sites show different BVPS and most of the differences can be explained by the number of shares that are divided into the Book Value. A number of sites use the Average Number of Share and some use the Diluted Number of Shares. These two different values for outstanding shares are used to calculate EPS. There are valid reasons to use different outstanding share values, but I have not changed my calculation yet.

The 5 year median Dividend Yield is 3.51%. The current Dividend Yield is 4.17% based on a stock price of $4.80 and a dividend of $0.20 per share. This stock price testing suggests that the stock price is relatively reasonable. I do not think any other testing concerning dividend yield is worthwhile because of the volatility of the dividends for this stock.

The 10 year Price/Cash Flow per Share Ratio is 6.19 and the current P/CF Ratio is 11.16 a values some 80% higher. The current P/CF Ratio is based on a stock price of $4.80 and 2015 CFPS estimate of $0.43. The 10 year Price/Sales Ratio is 0.74 and the current P/S Ratio is 1.35 based on 2015 Revenue estimate of $98.5 and a stock price of $4.80. Both these stock price tests suggest that the stock price is relatively expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month consensus stock price is $5.29. This price suggests a total return of $14.38% with 10.21% from capital gains and $4.17% from dividends based on a current stock price of $4.80.

This article at Stockhouse talks about McCoy's first quarterly report of 2015. At the Legacy site there is information on how analysts are rating this stock currently. Edmonton forum on energy issues is talked about in this article in the Edmonton Journal.

This is the second of two parts. The first part was posted on Tuesday, June 09, 2015 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 Global.

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.