I own this stock of Stingray Digital Group Inc (TSX-RAY.A, OTC-NONE). I was following Newfoundland Capital Corp and Stingray Bought them out. Also, I read the blub on CEO, Eric Boyko. The site says he is an entrepreneur with nearly two decades of experience with start-ups, Mr. Boyko has extensive expertise in early stage business innovations.
When I was updating my spreadsheet, I noticed that there was a lot more estimates (for Revenue, Earnings etc.) that in prior years. This means that analysts are taking notice of this stock. There is a lot of insider buying this year. A lot of this occurred under $6.00 to $3.52 at the bottom in March. This last insider buying at $3.77. These also has been a big increase in share outstanding and they have increased by 16.7% and 14.5% over the past 5 and 6 years.
The dividend yields are mostly moderate with dividend growth also good. The current dividend yield is good (6% and above) at 6.11%. However, this is because the stock price has plunged. Prior to the current time the dividend was mostly in the low (under 2%) to moderate (2% to 4% ranges). The 4 year and historical median dividend yield is moderate at 2.22%. The last dividend increase was low (below 8%) at 7.1%. Previous dividend increases were higher. See the chart below.
The Dividend Payout Ratios (DPR) for EPS is too high with other coverage good. The DPR for EPS for 2019 is too high at 156% with 5 year coverage at 183%. The DPR for CFPS for 2019 are good at 23% and 5 year coverage at 27%. The DPR for Free Cash Flow are also good 33% with 5 year coverage at 44%. Dividend Coverage Ratio for 2019 is good at 3.02 and 5 year coverage at 2.28.
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2019 is too high at 1.05, but it is better currently at 0.86. The Liquidity Ratio for 2019 is low at 0.86, but if you add in cash flow after dividends it is good better at 1.42. The Debt Ratio is too low at 1.46. I prefer both the Liquidity Ratio and Debt Ratio to be 1.50 and above. Leverage and Debt/Equity Ratios are too high at 3.17 and 2.17. I prefer these to be under 3.00 and under 2.00, respectively.
The Total Return per year is shown below for years of 4 to the end of 2019. 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. |
|---|---|---|---|---|---|
| 2016 | 4 | 22.34% | 7.03% | 3.72% | 3.31% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 21.38, 24.91 and 42.67. The corresponding historical ratios are 21.38, 241.91 and 42.67. The current P/E Ratio is 9.63 based on a stock price of $4.91 and an EPS estimate for 2021 of $0.51. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $6.34. The 5 year low, median, and high median Price/Graham Price Ratios are 2.04, 2.39 and 2.73. The current P/GP Ratio is 0.75 based on a stock price of $4.91. This stock price testing suggests that the stock price is relatively cheap.
I get a 5 year median Price/Book Value per Share Ratio of 3.09. The current P/B Ratio is 1.32 based on a Book Value of $273.9M, Book Value per Share of $3.72 and a stock price of $4.91. The current ratio is 57% below the 5 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 5 year median Price/Cash Flow per Share Ratio of 14.19. The current P/CF Ratio is 4.02 based on Cash Flow per Share estimate for 2021 of $1.22, Cash Flow of $89.7M and a stock price of $4.91. The current ratio is 72% below the 5 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median and 4 year median dividend yield of 2.22%. The current dividend yield is 6.11% based on dividends of $0.26 and a stock price of $4.91. The current dividend yield is 175% above the historical median and 4 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 5 year median Price/Sales (Revenue) Ratio is 3.50. The current P/S Ratio is 1.31 based on Revenue estimate for 2021 of $276M, Revenue per Share of $3.75 and a stock price of $4.91. The current ratio is 63% below the 5 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 relatively cheap. All the stock price testing points to this. The dividend yield test says the stock is relatively cheap and the P/S Ratio tests confirms this. Note that the stock price would have to move up a lot to get a result of the stock price being reasonable and below the median. For example, for the P/S Ratio test to says this, the stock would have to move above $10.50. The point being that even though the stock price is not at what my testing is at, it will take a big move to change the results of the testing.
Is it a good company at a reasonable price? I still believe in this company and will hold on to my shares and may buy more. I think the current price is relatively cheap. The problem with our current situation, it is hard to know what the future holds. We are not sure what will happen in the fall.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5) and Hold (1). The consensus would be a Buy. The 12 months stock price consensus is $7.31. This implies a total return of $54.99% with 48.88% from capital gain and 6.11% from dividends.
Analyst complain about their debt level on Stock Chase. Jed Lloren on Motley Fool believes in this stock. A writer on Simply Wall Street complains about the company’s low ROE and high debt. A writer on Simply Wall Street talks about the company missing its EPS estimate. The Canadian Press via Barrie Today talks about the company’s recent expansion.
Stingray Group Inc is a music, media, and technology company. The company is a provider of curated direct-to-consumer and B2B services, including audio television channels, radio stations, SVOD content, 4K UHD television channels, karaoke products, digital signage, in-store music, and music apps. Its web site is here Stingray Digital Group Inc.
The last stock I wrote about was about was Loblaw Companies Ltd (TSX-L, OTC-LBLCF) ... learn more. The next stock I will write about will be BlackBerry Ltd (TSX-BB, NASDAQ-BBRY) ... learn more on Friday, August 7, 2020 around 5 pm. Tomorrow on my other blog I will write Something to Buy August 2020.... learn more on Thursday, August 06, 2020 around 5 pm.
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