Is it a good company at a reasonable price? The stock price testing is mixed, but it could be cheap. The one thing that this company has going for it is its very good debt ratios. This means that the company had survive a lot of adversity. I am going to hold on to my shares, but I realize the risk is high.
I own this stock of McCoy Global Inc (TSX-MCB, OTC-MCCRF). I decided to try out McCoy in 2011. They had just restored their dividend. I want to use it as a fuller stock in my TFSA account. For me a fuller stock is one that uses up bits of extra money in an account. I review all my stocks once a year to determine if I will continue to hold them or not. I only review them more often if something big happens to one of the stocks I own.
When I was updating my spreadsheet, I noticed my Total Return to the end of April this is less bad that last year. Last year my Total Return was 17.9% loss. This year, to the end of April 2022, my loss is 9.4%. I bought this stock out of my fooling around money. Both the CEO and CFO bought more shares in the past year. This is a positive. The Chairman did not buy or sell during the past year.
The company has a high (and therefore good) Liquidity Ratio (4.12) and Debt Ratio (3.64). I look for these ratios to be 1.50 or higher. These very good ratios help companies survive bad times. I also noted that the CEO, CFO, and the other major officer of this company have increased their shares over the past year. The Chairman has not. I see that few of the directors have any shares in the company.
If you had invested in this company in December 2011, $1001.30 you would have bought 323 shares at $3.10 per share. In December 2021, after 10 years you would have received $219.64 in dividends. The stock would be worth $213.18. Your total return would have been $432.82.
|Cost||Tot. Cost||Shares||Years||Dividends||Stock Val||Tot Ret|
They cut their dividend for a second time in 2015. There is no indication from the company as to when they might restart dividends.
Debt Ratios are very good. The Long Term Debt/Market Cap Ratio for 2021 is 0.20 and current is at 0.10. The Liquidity Ratio for 2021 is 4.12 and currently at 3.56. The Debt Ratio for 2021 is 3.64 and is currently at 3.49. The Leverage and Debt/Equity Ratios for 2021 are 1.38 and 0.38 and are currently at 1.40 and 0.40. Yes, they have slightly deteriorated with the first quarter of 2022, but they are still great.
The Total Return per year is shown below for years of 5 to 24 to the end of 2021. 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 1.21, 1.74 and 2.27. The corresponding historical ratios are 3.29, 8.11 and 10.18. The current P/E Ratio is 6.13 based on a stock price of $0.98 and EPS for last 12 months of $0.16. The 10 year ratios are really too low. The historical ones are more reasonable and compared to them, the stock price is between the low and median of the historical median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. Also, any P/E Ratio below 10.00 is considered low.
I get a Graham Price of $2.25. The 10 year low, median, and high median Price/Graham Price Ratios are 0.51, 0.72 and 0.93. The current P/GP Ratio is 0.44 based on a stock price of $0.98. The current ratio is below the low of the 10 year median ratios. 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 0.94. The current P/B Ratio is 0.70 based on a Book Value of $39.63, Book Value per Share of 1.40 and a stock price of $0.98. The current ratio is 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Cash Flow per Share Ratio of 7.87. The current P/CF Ratio is 12.77 based on a stock price of $0.98, Cash Flow for last 12 months of $1.3M and Cash Flow per Share of $0.05. The current ratio is 62% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I cannot do any dividend yield testing because the dividend has been suspended.
The 10 year median Price/Sales (Revenue) Ratio is 0.69. The current P/S Ratio is 0.81 based on a stock price of $0.98, Revenue for last 12 months of $34M and Revenue per Share of $1.22. The current ratio is 31% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is mixed. The problem is that this company is not doing well in cash flow and revenue. The Graham Price test gives it a stock price of cheap as does the Price/Book Value test. The P/E ratio is very low. Because the company has not been doing well, analysts are not following this stock.
When I look at analysts’ recommendations, I find a Strong Buy (1) on Yahoo Finance. A Hold (1) on WSJ Alpha Spread give a Discounted Cash Flow (DCF) Value of $1.46 CDN$ on Alpha Spread. I get a 12 month Stock Price on Alpha Spread of $1.25. This implies a total return of 27.6% all from capital gains based on a stock price of $0.98.
Analysts last made remarks on this stock in 2016 on Stock Chase. Stock Chase gives this stock 1 star out of 5. Simply Wall Street on Yahoo Finance talks about this company’s balance sheet. The company has a news release on Newswire announcing their first quarter results for 2022. The company has a news release on Newswire announcing their fourth quarter results for 2021. Simply Wall Street on Yahoo Finance says the company’s ROCE is improving, but from a very low level. Simply Wall Street lists 2 risks for this stock as high level of non-cash earnings and does not have a meaningful market cap (CA$30M).
McCoy Global Inc is a provider of equipment and technologies to support tubular running operations, enhance wellbore integrity and assist with collecting critical data for the global energy industry. It is engaged in the design, production, and distribution of capital equipment to support tubular running operations, enhance wellbore integrity and to support capital equipment sales through aftermarket products and services such as technical support, consumables, and replacement parts. Its web site is here McCoy Global Inc.
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