Sound bite for Twitter and StockTwits is: Consumer Stock. The stock price seems to be cheap. They have cancelled their dividends for this year so they are no longer a dividend paying stock. I do not know when they may resume dividends. They have a vulnerability in connection with their debt load. See my spreadsheet on DHX Media Ltd.
I do not own this stock of DHX Media Ltd (TSX-DHX, OTC-DHXMF). I took a look at the stock after reading a favorable report at CANTECH. There was also a favorable report from Global Maxfin Capital.
When I was updating my spreadsheet, I noticed a lot of insider buying. The NIB is 0.47% (of Market Cap). Generally, this is closer to 0.01% or 0.02%. The Long Term Debt/Market Cap Ratio is really high at 2.03 in 2018 and currently at 1.12. The Goodwill and Intangible/Market Cap Ratio is also very high at 1.62. These high ratios are mainly the result of the stock price crashing. Since 2014 stock is down 63%. It is down 21% this year and was down some 36% last year. This stock has a financial year ending at June 30 each year we are in the 2018 financial year.
There is not much point in talking about dividends as they were cancelled for this company for 2019. They could not cover the dividends with EPS over the past two years because of earning losses. They are not expected to earn a positive EPS for 2019. So, at the moment they cannot afford their dividends.
Long Term Debt increased 167% in 2018 and the stock price has been dropping like a stone. So, the Long Term Debt/Market Cap Ratio is high for 2018 at 2.13 but dropping, because debt decreased to a current ratio of 1.12. It is still too high.
The Liquidity Ratio has varied but is generally good with a ratio of 1.65 in 2018 with 5 year median at 1.83. The Debt Ratio has also varied, but it is at 1.37 for 2018 with 5 year median at 1.48. This is a low ratio. Leverage and Debt/Equity Ratios are a little high at 3.68 and 2.68 respectively for 2018 with better 5 year medians of 2.22 and 1.22, respectively.
The Total Return per year is shown below for years of 5 to 12. 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.
I look at return to the end of the last year (2017) since this year has not be completed yet and this puts all stocks that I review on the same level. However, for this stock, the stock price has fallen some 21% in 2018. This really knocks out all the total return shown to the end of 2017
| Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 14.87% | 23.82% | 21.35% | 2.47% |
| 10 | 10.26% | 9.30% | 0.96% | |
| 12 | 6.71% | 5.99% | 0.73% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 27.36, -49.20, 43.36. The corresponding 10 year ratios are 26.52, 1.68 and 44.02. The corresponding historical ratios are 23.67, 35.17 and 43.36. The current P/E Ratio is a negative 89.23 and the P/E Ratio for 2020 is 357.00. I do not think any sensible testing is possible using the P/E Ratio.
I get a Graham Price of $1.00. The 10 year low, median, and high median Price/Graham Price Ratios are 1.42, 2.37 and 3.20. The current P/GP Ratio is 3.57 based on a stock price of $3.57. This stock price testing suggests that the stock price is relatively high.
I get a 10 year median Price/Book Value per Share Ratio of 1.50. The current P/B Ratio is 0.80 based on Book Value for $596M, Book Value per Share of $4.44 and a stock price of $3.57. The current ratio is some 46% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 1.94. The current P/S Ratio is 1.08 based on 2019 Revenue estimate of $445M, Revenue per Share of $3.31 and a stock price of $3.57. The current ratio is some 44% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
The P/E Ratios make little sense. They are too high. There has been some very high negative P/E Ratios for this stock because of earning losses. So, we should disregard this test. The Graham Price has an EPS component so this is also probably not a good test. Dividends have been cut so there is no dividend yield test available. The P/S Ratio and P/B Ratio testing seem to have no problems.
When I look at analysts’ recommendations, I find Strong Buy (1). Buy (1), Hold (8) and Underperform (2). The consensus would be a Hold. The 12 month stock price is $2.63. This implies a total loss of 26.33% all capital loss as the dividend has been cancelled. This is based on a current stock price of $3.57. The P/B Ratio and P/S Ratio are good tests. It would seem that the stock is currently cheap.
Brandie Wetzel on Simply Wall Street talks about who owns this company. The company announces via Newswire the sale of Halifax Animation Studio. SH Staff Writer on Steele Herald says that the Piotroski F-Score is 4 and this denotes low financial strength. Ambrose O'Callaghan on Motley Fool says this is a speculative buy. See what analysts are saying on Stock Chase. Some are worried about their debt levels.
DHX Media Ltd is a children's content and brands company, recognized globally for properties such as Peanuts, Strawberry Shortcake, Caillou, Inspector Gadget and Degrassi franchise. The company owns the largest independent library of children's content. It licenses its content to broadcasters and streaming services worldwide and generates royalties through its global consumer products program. The company through its subsidiary operates one of the largest networks of children's channels on YouTube. Its web site is here DHX Media Ltd.
The last stock I wrote about was about was Northland Power Inc. (TSX-NPI, OTC-NPIFF) ... learn more. The next stock I will write about will be First Capital Realty (TSX-FCR, OTC-FCRGF) ... learn more on Monday, December 10, 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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