TransForce Inc. 2

On my other blog I am today writing about Money Show 2015 and Globe and Mail Panel learn more...

Sound bite for Twitter and StockTwits is: Price could be reasonable, but above relative median. Stock is a big pricey because it is above the relative median. There is also insider selling. Although you never know why people sell stocks, insiders seem reluctant to hold shares. Of course, insider could just been viewing stocks as part of their salary. See my spreadsheet on TransForce Inc.

I do not own this stock of TransForce Inc. (TSX-TIF, OTC-TFIFF). I read a report called "6 Canadian Dividend Stocks That Fly Under the Radar" by John Heinzl in April of 2013. This is one of the stocks mentioned. There was also a good review of this stock by Advice Hotline by MPL Communications.

There are not a lot of insider holdings. The Alain Bedard, Chairman and CEO, has shares worth around $106.9M and some 4.3% of outstanding shares. I find the number of stock options given is a lot. The stock options for 2014, 2013 and 2012 are 0.37%, 0.50% and 0.60% of outstanding shares. Of the companies I follow, the median stock options given per year are 0.23% and 70% of these companies have less than 0.50% of stock options. So stock options appear to be at the top end and above.

Also, the net insider selling seems high. Over the past year there has been net insider selling of 0.21%. When I look at this last year, net insider selling was 0.08%. For most of the companies I follow, the median Net Insider selling is at around 0.02% and 70% of the companies have net insider selling of less than 0.10%. Insiders seem to be selling off most of the stock options that they get.

The 5 year low, median and high median Price/Earnings per Share ratios are 9.53, 12.18 and 14.84. The corresponding 10 year values are close at 9.18, 11.49 and 13.79. The historical median P/E Ratio is 10.79. The current P/E Ratio is 14.50. This s based on a stock price of $25.10 and 2015 EPS of $1.73. This stock price testing suggests that the stock price could be relatively reasonable, but it is above the relative median.

I get a Graham Price of $19.87. The 10 year Price/Graham Price Ratios are 0.80, 1.02 and 1.20. The current P/GP Ratio is 1.26 based on a stock price of $25.10. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value per Share Ratio of 2.13. The current P/B Ratio is 2.48 based on BVPS of $10.14 and a stock price of $25.10. The current P/B Ratio is some 16.2% higher than the 10 years median P/B Ratio. This stock price testing suggests that the stock price is relatively reasonable, but it is above the relative median.

The only dividend yield testing that is practical is the 5 year median dividend yield. This is because this stock used to be an income trust with quite high dividend yield. The 5 year median dividend yield is 2.93%. The current dividend yield is 2.71% based on a stock price of $25.10 and Dividends of $0.68. The current dividend yield is some 7.5% lower than the 5 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable, but it is above the relative median.

When I look at analysts' recommendations I find Strong Buy, Buy, Hold and Underperform recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price target is $29.41. This implies a total return of 19.88% with 2.71% from dividends and 17.17% from capital gains.

This press release on Stock House talks about the company selling a segment of their business. This article on OCTA Finance talks about BMO capital raising their target price. Joseph Solitro of Motley Fool likes this company.

This is the second of two parts. The first part was posted on Monday, November 9, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce companies service the following segments: Package and Courier; Less-Than-Truckload; Truckload, which includes specialized truckload and dedicated services; Specialized Services, which includes services to the energy sector, waste management, logistics and ancillary transportation services. Its web site is here TransForce Inc.

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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