Wednesday, December 4, 2019

DHX Media Ltd

Sound bite for Twitter and StockTwits is: Consumer Stock. The stock price is probably cheap. There is a lot of changes going on present for this company so, even though it is cheap, it is of a high risk nature. Most debt ratios are fine. See my spreadsheet on DHX Media Ltd.

I do not own this stock of DHX Media Ltd (TSX-DHX, OTC-DHXMF). In the CanTech Letter of 2014 May 2014 Byron Capital says investors should accumulate DHX Media aggressively. I also have a report on this stock from Global Maxfin Capital who rates this stock a strong buy in January 2014.

When I was updating my spreadsheet, I noticed they have changed a lot of the executives and board members. Almost no one I had an officer or board member is listed as such this year. The only person I had on my list of officers and directors is an officer who has become the CFO. They also have changed the company’s name but do have seem to change the name or symbol on the TSX. The company is now called WildBrian. There is the same number of Directors as last year and they still have 2 women on the board.

Long Term Debt has been dropping, but not as fast as the stock price. At the end of June 2019 financial year, the Long Term Debt/Market Cap Ratio is 2.32 with the debt falling 30%, but the market cap dropping over 38%.

The company has suspended the dividends because of EPS losses.

Debt Ratios are fine except for the Long Term Debt which is too high compared to the stock’s market cap. The Long Term Debt/Market Cap for 2018 is 2.31 with a current one of 2.33. The Liquidity Ratio is good at 1.70 with 5 year median also at 1.70. The Debt Ratio is good at 1.61 with 5 year median at 1.48. The Leverage and Debt/Equity Ratios are fine at 2.64 and 1.64.

The Total Return per year is shown below for years of 5 to 13 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.
2013 5 0.00% -17.06% -18.45% 1.39%
2008 10 0.00% 18.38% 15.45% 2.93%
2003 13 0.41% -0.79% 1.20%

The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative. The corresponding 10 year ratios are 19.03, 26.68 and 33.68. The corresponding historical ratios are 19.03, 26.68 and 33.68. The current P/E Ratio is negative, so cannot be tested. The P/E Ratio for 2021 is 53.67 based on a stock price of $1.61 and EPS estimate for 2021 of $0.03. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $1.57. 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 1.07 based on a stock price of $1.61. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 1.50. The current P/B Ratio is 0.46 based on a stock price of $1.61, Book Value of $491M and a Book Value per Share of $3.64. The current ratio is some 69% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

I cannot do an historical median dividend yield test because dividends have been suspended.

The 10 year median Price/Sales (Revenue) Ratio is 1.94. The current P/S Ratio is 0.50 based on 2021 Revenue estimate of $453, Revenue per Share of $3.36 and a stock price of $1.61. The current ratio is some 74% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

Results of stock price testing is that the stock price is probably cheap. The P/S Ratio test is probably the best, but there are no problems with the other tests except for the P/E Ratio test. The P/E Ratios make no sense at all. They are either negative or much too high for this sort of company.

Is it a good company at a reasonable price? The stock price is probably cheap. However, the company seems to be in some trouble and it is hard to say if their new strategy will work. I am not interested in this company at the present time.

When I look at analysts’ recommendations, I find Buy (1), Hold (7), Underperform (1) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $2.04. This implies a total return of 21.43% all from capital gains.

See what analysts are saying on Stock Chase. They think it is going through some rough times. Anders Bylund on Motley Fool talks about the company’s old and new strategy. A writer on Simply Wall Street talks about insider buying at this firm. The company reports via The Chronicle Herald their firstly quarterly results. David Paddon, The Canadian Press on BNN Bloomberg talks about the company changing its name to WildBrian.

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. 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 Friday, December 06. 2019 around 5 pm. Tomorrow on my other blog I will write about Something to Buy December 2019.... learn more on Thursday, December 05, 2019 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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