Intertape Polymer Group Inc.

Sound bite for Twitter and StockTwits is: Price seems reasonable. Even though you can do little comparison testing on this stock, ratios are not particularly high except for the P/BV Ratio. This could be an interesting investment. Still, the economic climate is uncertain at present. See my spreadsheet on Intertape Polymer Group Inc.

I do not own this stock of Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF). I got this stock from a guy who I met in an Investment Club.

The stock has a rather checker past. It hit highs prior to the 2000 bear market. At that time the stock price fell some 44% and it has never recovered. The stock is still some 56% below the highs that occurred at the end of 1999 and beginning of 2000. Although Revenue and Cash Flow did not fall at that time, EPS fell some 75% for the 1999 financial year.

This is an industrial stock and EPS for industrial stocks tend to be rather uneven. Probably what kept the stock down for so long is that between 2006 and 2010 inclusive, the company had earning losses. It only started to make a profit again in 2011 and this is when the stock price started to increase again.

This stock seems to be doing well at present and in 2013, it started to pay dividends. Dividends were increased by 50% in 2014. The next increase in 2015 was for 8.3%. Perhaps this company will become a dividend growth company. The one problem for Canadian investors is that the company's dividends are payable in US$, so the dividend payments will fluctuate with the currency exchange. They do a lot of business in the US and report also in US$.

They can afford the current dividends. The Dividend Payout Ratio for 2015 was 54% for EPS and 29% for CFPS. It is always a good sign when a company starts to pay dividends.

Revenue growth is low where the Revenue is up over the past 5 years by 1.7% per year, but down over the past 10 years by 0.25% per year. Revenue per Share is up by 1.8% per year over the past 5 years, but down by 3.8% per year over the past 10 years. Analysts seem low growth in Revenue over the next couple of years. This is in US$ as the company reports in US$.

EPS is up by 58% per year over the past 4 years and by 3.3% per year over the past 10 years. The company had a string of earning losses between 2006 and 2010 inclusive, but they have been making a growing profit since. These values are in US$.

Cash Flow has been growing at 32% and 5.8% per year over the past 5 and 10 years. CFPS has been growing at 32% and 2% per year over the past 5 and 10 years. If you notice again, there is good growth lately. These values are in US$.

Debt Ratios are good. The Liquidity Ratio for 2015 is 2.45. The Debt Ratio is 1.80. The Leverage and Debt/Equity Ratios for 2015 are 2.25 and 1.25.

The Return on Equity has been over 10% during the last 4 years. Before that it was either negative or quite low. You can see that this is a turnaround for this company.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 8.61, 14.26 and 21.70. The 10 year corresponding ratios are very low at 2.92, 4.30 and 5.68. This is due to a number of years of negative EPS. The corresponding historical ratios are 7.79, 15.10 and 21.48. The current P/E Ratio is 13.49. This stock price testing would suggest that the stock price is relatively reasonable and below the median.

I get a Graham Price of $13.11. The 10 year low, median and high median Price/Graham Price Ratios are 0.63, 1.04 and 1.40. These are reasonable ratios. The current P/GP Ratio is 1.50. This stock price testing suggests that the stock price is relatively expensive. The current P/BP Ratio at 1.50 is rather high.

I get a 10 year Price/Book Value per Share Ratio of 0.94. This is a very low ratio and is probably because the stock was doing poorly until recently. The current P/B Ratio is 3.73. This Ratio is rather high. Until 2011, the BVPS was going down year after year. You really can do no stock price testing on P/B Ratio.

You also cannot do relative P/S Ratio testing on this stock. The 10 year P/S Ratio is 0.31, a very low value. The current P/S Ratio is 1.09. Although the current one is 249% higher than the 10 year value, a P/S Ratio of 1.09 is not a high ratio. The current P/S Ratio is also higher than the 5 year median ratio of 0.93. Any P/S Ratio at or below 1.00 are a low ratio.

You have the same problem looking at Price/Cash Flow per Share Ratio. The 10 year value is 5.08 which is a rather low ratio. The 5 year P/CF Ratio is more realistic at 7.69. The current P/CF is above both, but only 9% higher than the 5 year P/CF Ratio. A P/CF Ratio of8.44 is a reasonable ratio.

When I look at analysts' recommendations, I find Strong Buy and Buy recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price is $17.19 US$. This is implies a total return of 15.54% with 15.06% from capital gains and 3.48% from dividends based on current stock price of $14.94 US$.

You also cannot do any stock price testing on Dividend Yield as they have just begun to pay dividends.

Jonathan Abenaim on Seeking Alpha talks about why he likes this company. He also talks about how when Gregory Yull became CEO in 2010, the company has done very well. Gregory Yull has been with the company since 1991. Two companies that own shares in this company sent a letter to ITP asking it to unlock the company's value. This letter is showing on News Wire. Interestingly, one of the ways they suggest to unlock the stock's value is having more leverage. This is to get more debt. These companies are Hedge Funds. Are they just interested in the company for the short term? This can be the trouble with Hedge Funds. See what analysts on Stock Chase are saying about this company.

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.

The last stock I wrote about was about was IGM Financial Inc. (TSX-IGM, OTC-IGIFF)... learn more . Tomorrow on my other blog I will write about My Dividend Stocks... learn more on Tuesday, June 7, 2016 around 5 pm.

Intertape Polymer Group Inc. operates in the specialty packaging industry in North America. The Company develops, manufactures and sells a range of paper and film-based pressure sensitive and water activated tapes, polyethylene and specialized polyolefin packaging films, woven coated fabrics and complementary packaging systems for industrial and retail use. Its web site is here Intertape Polymer Group 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.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.