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.
When I was updating my spreadsheet, I noticed that if I had bought more than a few shares in this company I could have made a lot more money. The other thing is that there has been lots of insider selling over the past few years. This is a small company so selling by insiders would affect the Selling/Market Cap Percentage. However, this percentage has been high at 1.36%, 0.51% and 0.90%.
A problem is that people can sell for all sorts of reasons, but it is only buying that gives a positive reason because people buy shares in their companies because they feel good about its future. However, looking closer, I find that the Chairman has reduced his shares by 36% over the past 5 years. He is the founder of this company. He and the CEO are brothers. Over the same time period the CEO has reduced his shares by 18%.
They could be selling because they simply need money. Another reason is that they are trying to diversify their investment holdings and not have all their money tied up in one company. Founders of companies are often advised to do this and have a regular selling program.
The dividend yield is low and the dividend growth is good. The current dividend yield is 1.20% with 5, 10 and historical yields at 1.24%, 2.00% and 2.00%. Dividends have only been paid for the past 10 years. Dividends have grown by 21.5% and 16.6% per year over the past 5 and 10 years.
They can afford their dividends. The Dividend Payout Ratio varies from year to year quite a bit because earnings are volatile. The DPR for 2018 was 61.7% with 5 year coverage at 39.5%. In this case the 5 year coverage is probably the important one. The DPR for CFPS for 2018 was 47% with 5 year coverage at 28.8%.
Their long term debt is negligible. The Long Term Debt/Market Cap Ratio is 0.00. All the debt ratios are good. The Liquidity Ratio is 1.76 with 5 year median at 1.61. The Debt Ratio for 2018 is 3.13 with 5 year median at 2.09. The Leverage and Debt/Equity Ratios for 2018 are 1.47 and 0.47 respectively, with 5 year medians at 1.91 and 0.91, respectively. Note that the financial year ends in April each year so I am looking at the financial year ending in April 2018.
The Total Return per year is show below for years of 5 to 19. 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.
It is interesting that the stock currently has a higher return in more recent years than in the longer term.
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 21.45% | 38.52% | 36.82% | 1.71% |
| 10 | 16.55% | 27.82% | 26.10% | 1.72% |
| 15 | 19.86% | 18.97% | 0.90% | |
| 19 | 9.54% | 9.11% | 0.42% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 21.69, 29.91 and 38.13. The 10 year corresponding ratios are 18.17, 22.62 and 27.07. The historical ratios are 11.24, 13.54 and 16.46. The rising P/E Ratio rise shows that the stock price is rising faster than earnings. The current P/E Ratio is 32.12 based on a stock price of $16.70 and 2019 EPS of $0.52. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $6.21. The 10 year low, median, and high median Price/Graham Price Ratios are 1.40, 1.83 and 2.21. The current P/GP Ratio is 2.69 based on a stock price of $16.70. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share Ratio of 2.74. The current P/B Ratio is 5.06 based on a stock price of $16.70, Book Value of $43M and Book Value per Share of $3.30. The current ratio is some 855 higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 2.00%. The current yield is 1.20% based on dividends of $0.20 and a stock price of $16.70. The current yield is some 40% lower than the historical median. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 0.97. The current P/S Ratio is 2.74 based on 2019 Revenue estimate of $79.7M, Revenue per Share of $6.09 and a stock price of $16.70. The current ratio is some 183% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts’ recommendations I find Buy (5) and Hold (1). The consensus would be a Buy. The 12 month stock price is $18.10. this implies a total return of 9.58% with 8.38% from capital gains and 1.20% from dividends.
The company talks about its fourth quarterly results on Globe News Wire. Kevin Zeng on Simply Wall Street says that this company has a good historical track record. See what analysts are saying about this stock on Stock Chase. the company is not well covered but it is liked and several analysts have named it their top pick over the years.
Tecsys Inc is a provider of supply chain solutions. The company's solution is built on supply chain platform, and includes warehouse management, distribution management, transportation management, and others. Its web site is here TECSYS Inc.
The last stock I wrote about was about was Pulse Seismic Inc. (TSX-PSD, OTC- PLSDF) ... learn more. The next stock I will write about will be Savaria Corporation (TSX-SIS, OTC-SISXF) ... learn more on Wednesday, August 1, 2018 around 5 pm. Tomorrow on my other blog I will write about Enbridge.... learn more on Tuesday, July 31, 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.
No comments:
Post a Comment