Savaria Corporation 2

Sound bite for Twitter and StockTwits is: Stock is expensive. However, the stock current has upwards momentum. There is a lot of insider ownership. There is a large cash balance under this company. See my spreadsheet at sis.htm.

I do not own this stock of Savaria Corporation (TSX-SIS, OTC-SISXF). I got this stock off the Dividend Blogger site that no longer exists. I am always interested in dividend growth small cap stock. The first few years of accounting were rather confusing, but I think I figured them out in the end.

The CEO/Chairman owns shares worth some $65.3M and some 46% of the outstanding shares. The CFO owns shares worth around 87.3M and some 45% of the outstanding shares. It would seem that a lot of the shares are owned by insiders so that there would not be a lot of shares trading on the TSX. According a chart I looked at there is mostly less than 100K a day traded, but there was a peak of 400K traded in November of 2014.

In 2014 the outstanding shares were increased by some 394K shares for stock options which is an increase of 1.33%. This is relatively large amount. Of the stocks I follow the median increase in shares for stock options is 0.27% and 70% of the companies had increases of 0.57% or less.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.04, 15.98 and 18.91. The 10 year corresponding ratios are similar at 10.94, 15.40 and 19.40. The current P/E Ratio is 21.93 based on a stock price of $5.92 and 2015 EPS estimate of $0.27. This stock price testing suggests that the stock is relatively expensive.

If you consider the cash on hand of $0.98 per share, that would lower the stock price to$4.94 and give a P/E of 18.31. This would allow the stock to sneak into the reasonableness zone as far a stock price goes. This is just another way at looking a P/E Ratios.

I get a Graham price of $3.20. The 10 year low, median and high median Price/Graham Price Ratios are 0.93, 1.17 and 1.42. The current P/GP Ratio is 1.85 based on a stock price of $5.92. This stock price testing suggests that the stock is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 1.85. The current P/B Ratio is 3.51 a value some 90% higher. The current P/B Ratio is based on a BVPS of $1.69 and a stock price of $5.92.

Using the Dividend Yield we do not get any different results. The 5 year median dividend yield is 6.91% a value some 60% higher than the current dividend yield of 2.70%. The current dividend yield is based on dividends of $0.16 and a stock price of $5.92. The historical median dividend yield is 3.62% which is still some 25% higher than the current dividend yield. This stock price testing suggests that the stock is relatively expensive.

When I look at analysts' recommendations I find Strong Buy and Buy recommendations. The 12 month stock price consensus is $6.42. This implies a total return of 11.15% with 8.45% from capital gains and 2.70% from dividends. The stock currently has an upwards momentum.

Stephen Takacsy at BNN likes Savaria. There is a positive news item on this company in the Brampton Guardian.

This is the second of two parts. The first part was posted on Monday, August 10, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Savaria Corporation is North America's leader in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures, installs and distributes primarily elevators for home and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts minivans to be wheelchair accessible. Its web site is here Savaria.

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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