Wednesday, August 19, 2015


On my other blog I am today writing about cash flows and working capital continue...

Sound bite for Twitter and StockTwits is: Stock price is expensive, momentum lost. This stock has recently lost its upward momentum. I still like this stock and will be holding on to what I have, but it seems a little pricey at present. Tech stocks have often been pricey and gain can be made on short term momentum, but this stock seems to have lost that lately. See my spreadsheet at tcs.htm.

I own this stock of TECSYS Inc. (TSX-TCS, OTC- TCYSF). I came across this stock when I was looking for a dividend paying small cap stock as a filler stock. I consider a filler stock to be one to soak up small amounts of investment money that I have left over in my account, especially in the TFSA after I have made my main purchase for the year.

There is a lot of insider ownership by the Brereton family and a cursory view I come up with some 40% ownership by this family. The Chairman owns stock worth some $30.3M and about 27% of the outstanding stock. The CFO owns shares worth $4.2M and some 3.8% of the outstanding stock. They are both members of the Brereton family. Insider selling was at $0.04M and some 0.03% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 21.69, 29.91 and 37.13. The corresponding 10 years values are a lot lower at 19.65, 16.41 and 19.65. The current P/E Ratio is 34.62 based on a stock price of $9.00. Based on 5 year P/E Ratios the stock price is relatively reasonable, but above the median.

I get a Graham Price of $3.33. The 10 year low, median and high median Price/Graham Price Ratios are 0.94, 1.19 and 1.46. The current P/GP Ratio is 2.70 based on a stock price of $9.00. This stock price testing suggests that the stock price is expensive. On an absolute basis, a P/GP Ratio of 2.70 is high.

The 10 year Price/Book Value per Share Ratio is 1.47. The current P/B Ratio at 4.74 is some 223% higher. This stock price testing suggests that the stock price is expensive. On an absolute basis, a P/B Ratio of 4.74 is high.

The current dividend yield is 1.11%. The historical low is 1.09% and so the current one is getting close to historical low. However, history on this stocks dividend only goes back 7 years. The 5 year median is 2.43% and the historical median is 2.64%. The current one is some 54% and 58% lower than these values. This stock price testing suggests that the stock price relatively expensive.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations and the consensus would be a Buy recommendation. The 12 month stock price consensus is $11.50. This implies a total return of 28.89% with 27.78% from capital gains and 1.11% from dividends.

This article in OCTA Finance says PI Financial has raised the target price on this stock to $11.00. This March 2015 article in Market Wired talks about this company doing a bought deal offering of common shares. They will be selling 562K shares at $8.90. This press release at Market Watch talks about TECSYS focusing on complex supply chains.

This is the second of two parts. The first part was posted on Tuesday, August 18, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

TECSYS Inc. is a supply chain management software provider that delivers powerful enterprise distribution, warehouse and transportation logistics software solutions. The company's customers include about 600 mid-size and Fortune 1000 corporations in healthcare, heavy equipment, third-party logistics, and general wholesale high- volume distribution industries. Its web site is here TECSYS.

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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