I do not own this stock of IBI Group Inc (TSX-IBG, OTC-IBIBF). I have had this stock on my list to investigate for some time before I finally did in 2011. What finally prompted me set up a spreadsheet on this stock was an investment report I read in March of 2011.
When I was updating my spreadsheet, I noticed that they were an income trust and as such had good dividends in the past. They became a corporation in 2011, but could not afford dividends after a couple of years of earning losses so they were suspended in 2014.
The 5 year growth is so good because the stock hit a low point exactly 5 years ago. After a couple of years of good gains, the stock price dropped in 2018, but so far this year it is up 25%. I noticed also that there is insider buying of 0.12% of market cap. This is high as expected buying would be at 0.01%. CEO and Chairman have been buying.
This company suspended their dividends in 2013. They have not made any statements that I can find about when they will restart them. This stock could take off when and if they restart dividends.
Debt Ratios are fine. Note that this company had a negative Book Value (and Debt Ratio below 1.00) back in 2015 and they have been building the Book Value again. The Long Term Debt/Market Cap Ratio for 2018 is fine at 0.55. The Liquidity Ratio is very good at 2.49 with 5 year median at 2.11. The Debt Ratio is low at 1.20 with 5 year median at 1.08. The Leverage and Debt/Equity Ratios are quite high at 5.91 and 4.91 in 2018.
The Total Return per year is shown below for years of 5 to 14 to the end of 2018. 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 chart below.
|From||Years||Div. Gth||Tot Ret||Cap Gain||Div.|
The 5 year low, median, and high median Price/Earnings per Share Ratios are 6.93, 11.79 and 16.65. The corresponding 10 year ratios are 9.09, 12.70 and 16.30. The corresponding 10 year ratios are 6.93, 10.11 and 14.33. The current P/E Ratio 14.92 based on a stock price of $5.82 and 2019 EPS estimate of $0.39. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $3.20. The 10 year low, median, and high median Price/Graham Price Ratios are 0.80, 1.11 and 1.61. The current P/GP Ratio is 1.82 based on a stock price of $5.82. 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 1.40. The current P/B Ratio is 5.00 based on a Book Value of $36M, Book Value per share 1.16 and a stock price of $5.82. The current P/B Ratio is 257% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.
I cannot do an historical median dividend yield test as the dividends are currently suspended.
The 10 year median Price/Sales (Revenue) Ratio is 0.53. The current P/S Ratio is 0.48 based on 2019 Revenue estimate of $377M, Revenue per Share of $12.07 and a stock price of $5.82. The current ratio is 8.5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable. The best test is the P/S Ratio test. It is showing the stock price as reasonable and below the median. The problem with the P/GP Ratio test and the P/B Ratio test is that the company had recently a negative book value.
Is it a good company at a reasonable price? I still think that this is a company worth tracking. I only track companies I am interested in. The stock price is probably reasonable. However, the company has had some difficulties and therefore is of a high risk.
When I look at analysts’ recommendations, I find Strong Buy (2) and Buy (3). The consensus would be a Buy. The 12 month stock price consensus is $7.75. This implies a total return of 33.16% all from capital gains based on a stock price of $5.82.
See what analysts are saying on Stock Chase. One analyst called it a turn-around situation. A writer on Simply Wall Street says that the beta value for this stock is 1.00 which means that it is as volatile as the broader market. A message of the company posted on Yahoo talks about their investment in SWTCH. The announcement by IBI Group to suspend dividends. A writer on Simply Wall Street talks about the great gains the company has recently made.
IBI Group Inc is a Canada based engineering services provider. The company plans, designs, implements, as well as offer other consulting services and software development for its intelligence, buildings, and infrastructure business streams. Its web site is here IBI Group Inc.
The last stock I wrote about was about Johnson and Johnson (NYSE-JNJ) ... learn more. The next stock I will write about will be PFB Corp (TSX-PFB, OTC-PFBOF) ... learn more on Monday, November 18, 2019 around 5 pm.
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