I do not own this stock of Wild Brain Ltd (TSX-WILD, OTC-WLDBF). In the CanTech Letter of May 2014 Byron Capital says investors should accumulate DHX Media aggressively. I also saw 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 that the stock price went up a lot this year. It is up 91% year to date. Also, in the last couple of year more analyst have been following this stock and more have been giving estimates. It is always interesting when analysts pay more or pay less attention to a stock. Analysts tend to pay more attention to stocks that are doing well and less to those that are doing poorly.
The company suspended their dividends in 2018. There has been no information on what their future intentions are. When they did pay dividends, the dividend yield was low (below 2%). They could not cover their dividends because they had not made a profit since 2017. They could not cover the dividends by Cash Flow either.
Debt Ratios need improving. The Long Term Debt/Market Cap is current at 1.00. It has been over 2.00 in the recent past. Debt was growing but stock price was not. The Liquidity Ratio is good at 1.76. The Debt Ratio is too low at 1.37. I prefer this to be at 1.50 or above. The Leverage and Debt/Equity Ratios are far too high at 26.37 and 19.29 when I prefer then to be below 3.00 and below 2.00.
The Total Return per year is shown below for years of 5 to 15 to the end of 2020. 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 all negative and therefore, unusable. The corresponding 10 year ratios are 5.95, 8.64 and 11.33. The corresponding historical ratios are 5.95, 8.64 and 11.33. The current P/E Ratio is negative and so unusable. The P/E Ratio for 2023 is 41.63 based on stock price of $3.33 and EPS estimate for 2023 Financial year of $0.08. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $0.76. The 10 year low, median, and high median Price/Graham Price Ratios are 1.45, 2.47 and 3.54. The current P/GP Ratio is 4.38 based on a stock price of $3.33. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive. The P/GP Ratios are very high where the top P/GP Ratio for a buy is considered to be 1.50.
I get a 10 year median Price/Book Value per Share Ratio of 2.60. The current P/B Ratio is 10.37 based on a Book Value of $55M, Book Value per Share of $0.32 and a stock price of $3.33. The current ratio is 299% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The current ratio is high because of falling book value which has decreased at 37% per year over the past 5 years. This is a problem.
I get a 10 year median Price/Cash Flow per Share Ratio of 3.60. The current P/C Ratio is 9.00 based on a stock price of $3.33, Cash Flow per Share estimate for 2022 of $0.37, Cash Flow of $63.6M. The current ratio is 150% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
The P/CF Ratio is 9.00 and that is not a high ratio. Based on this ratio, the stock price would be reasonable. The problem with the 10 year median ratio is that Cash Flow has varied a lot in the past 10 years from a high of 49.44 to a low of negative 134.25. This would be a better test if all the P/CF Ratios were positive and closer in value.
I cannot do any dividend yield testing as the dividends have been suspended.
The 10 year median Price/Sales (Revenue) Ratio is 1.89. The current P/S Ratio is 1.17 based on Revenue of $490M, Revenue per Share of $2.85 and a stock price of $3.33. The current ratio is 38% 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 relatively cheap. The P/S Ratio is the best test because the ratios, although they vary a lot are all positive figures. This test says the stock price is cheap. Most of the other tests are dealing with very high ratios and 10 year median ratios that include both positive and negative values. The current P/GP Ratio is high because of low EPS and dropping Book Value.
Is it a good company at a reasonable price? The stock price might be reasonable, but the debt ratios suck. Over the past 17 years I have data, the company has earned a profit 8 times and has losses 9 times. Over the past 10 years, there has been 5 years of positive earnings and 5 years of earning losses. This would not be my first choice of a stock to buy in the consumer area. However, people are getting interested in this stock and it has gone up a lot this year, but any buy would be highly speculative.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1) and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $4.49. This implies a total return of 34.83% all from capital gains.
Analysts last looked at this stock on Stock Chase in 2019 and produced a lot of recommendations of Do not Buy. Stock Chase gives this stock one star out of 5. Christopher Liew on Motley Fool says it is a dark horse stock that may surprise you. Ambrose O'Callaghan on Motley Fool says it is minnow, but still worth considering as a future stock today. Wild Brain reports on its first quarter of 2022 via Cision. This article from Cision talks about WildBrain spark expands from YouTube to the Metaverse.
WildBrain 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 independent library of children's content. The company through its subsidiary operates networks of children's channels on YouTube. Its web site is here Wild Brain Ltd.
The last stock I wrote about was about was Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more. The next stock I will write about will be Waterloo Brewing Ltd (TSX-WBR, OTC, BIBLF) ... learn more on Friday, December 03, 2021 around 5 pm. Tomorrow on my other blog I will write about If It Sounds Too Good.... learn more on Thursday, December 02, 2021 around 5 pm.
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