Wednesday, May 2, 2018

McCoy Global Inc.

Sound bite for Twitter and StockTwits is: Small Cap Industrial. The best stock price testing for this company is via P/B Ratios or P/S Ratios. By these measures the stock price is cheap to reasonable. See my spreadsheet on McCoy Global Inc.

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. I am still positive on this stock. It services the energy business so it is no surprise that there is volatility in its earnings etc.

This company works for the oil and gas industry and has not been doing well lately. When I look at its spreadsheet, I see a lot of red. They also have a fair bit of cash on hand. At the end of 2017 cash was equal to $0.54 a share or 39% of the share price.

They started dividends in 2001 and then cancelled them in 2010. Dividends were restarted in 2012 and then cancelled again in 2016. Analysts do not expect them to restart in the near future. For the last 3 years they have EPS losses. So it was wise of them to cut the dividends. They are expected to make a profit this year of 2018.

One thing to worry about on small caps is debt ratios. For this stock they are quite good. The Liquidity Ratio is 2.99 and the Debt Ratio is 3.54. Anything above 1.50 for these ratios is good. The Leverage and Debt/Equity Ratios are 1.39 and 0.39. For these ratios anything below 2.00 and 1.00 are good ratios.

The Total Return is show below for years of 5 to 20. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below. As you can see, it is only those that have held this stock for 15 years that have made any money. Over the past 20 years they have almost broken even.

Years Div Gth Tot Ret Cap Gain Div
5 0.00% -17.83% -20.69% 2.86%
10 0.00% -3.28% -7.56% 4.28%
15 0.00% 23.45% 12.12% 11.33%
20 -1.67% -4.30% 2.63%

The 5 year low, median and high median Price/Earnings per Share Ratios are all negative and therefore useless. The 10 year ratios are very low and not much good either. The historical P/E Ratios are 4.15, 8.43 and 10.20. The current P/E Ratio is 18.86 based on a stock price of $1.32 and 2018 EPS of $0.07. This stock price testing suggests that the stock price is relatively high. However, The P/E Ratio for 2019 is 6.60. This is a rather low P/E Ratio.

I get a Graham Price of $1.53. The 10 year low, median and high median Price/Graham Price Ratios are 0.49, 0.80 and 1.15. The current P/GP Ratio is 0.86 based on a stock price of $1.32. This stock price testing suggests that the stock price is relatively reasonable but above the median. On an absolute basis a P/GP Ratio below 1.00 signals that a stock price is cheap.

I get a 10 year median Price/Book Value per Share of 1.22. The current P/B Ratio is 0.89 based on Book Value of $41M, Book Value per Share of $1.49 and a stock price of $1.32. The current ratio is some 27.5% below the 10 years median. This stock price testing suggests that the stock price is relatively cheap. Also the P/B Ratio is less than 1.00. This signals, on an absolute basis, that the stock price is cheap as it is below the theoretical break up price of the company.

It is not possible to do a stock price testing based on dividend yields. The dividends are inconsistent in both the amount and whether or not they will be paid.

The 10 year median Price/Sales (Revenue) Ratio is 0.81. The current P/S Ratio is 0.75 based on 2018 Revenue estimate of $49M, Revenue per Share of $1.77 and a stock price of $1.32. The current ratio is some 7% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. On an absolute basis, a P/S Ratio of below 1.00 for a small cap generally signals that the stock price is cheap.

When I look at analysts' recommendations I find Buy (1) and Hold (2). The consensus would be a Hold rating. The 12 month stock price consensus is $2.00. This implies a total return of 51.52% all from capital gains. This is based on a current stock price of $1.32.

The company announced its fourth quarter and annual results for 2017 onCision. Peter Hammer on MTA says that analysts have given a Hold rating on this stock. There are only a few old comments on this stock at Stock Chase. There are few analysts following this stock.

McCoy Global Inc. provides equipment and technologies used for making up threaded connections in the global oil and gas industry. Its products are used during well construction phase for both land and offshore wells during both oil and gas exploration. Its web site is here McCoy Global Inc.

The last stock I wrote about was about was Ag Growth International (TSX-AFN, OTC- AGGZF)... learn more. The next stock I will write about will be TFI International (TSX -TFII, OTC-TFIFF)... learn more on Friday, May 4, 2018 around 5 pm. Tomorrow on my other blog I will write about Something to Buy May 2018.... learn more on Thursday, May 3, 2018 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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