Is it a good company at a reasonable price? The stock price is very cheap. I am surprised that they were able to come back from their latest problems. They also have a next generation of Reitmans taking over. I am curious how this company will do in the future. This could be interesting. Whether it is a worthwhile investment is a very different question.
I do not own this stock of Reitmans (Canada) Ltd (TSX-RET.A, OTC-RTMAF), but I used to. I bought it with my fooling around money in 2013. I was following this stock as it was a stock on Mike Higgs' dividend growth stocks list.
When I was updating my spreadsheet, I noticed that no analyst seems to following this stock. However, the company, with 4 years of earnings losses in the past 10 years, and 3 years of losses in the past 5, made a decent profit this year. They have also come out of its restructuring proceedings this year.
If you had invested in this company in December 2011, $1007.76 you would have bought 68 shares at $14.82 per share. In December 2021, after 10 years you would have received $176.80 in dividends. The stock would be worth $142.12. Your total return would have been $318.92.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $14.82 | $1,007.76 | 68 | 10 | $176.80 | $142.12 | $318.92 |
The company no longer pays dividends, so there are no dividend yields Dividend Payout Ratios (DPR) to look at.
Debt Ratios are good, and much improved over last year. The company currently has no long term debt. The Liquidity Ratio for 2022 is 1.97 and that is good. The Debt Ratio for 2022 is 2.41 and that is also good. The Leverage and Debt/Equity Ratios for 2022 are 1.71 and 0.71 and these are also good.
The Total Return per year is shown below for years of 5 to 34 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. |
|---|---|---|---|---|---|
| 2016 | 5 | 0.00% | -16.18% | -18.55% | 2.37% |
| 2011 | 10 | 0.00% | -14.65% | -17.79% | 3.14% |
| 2006 | 15 | 0.00% | -10.21% | -14.57% | 4.36% |
| 2001 | 20 | 0.00% | 13.81% | -1.47% | 15.28% |
| 1996 | 25 | 0.00% | 12.78% | 0.30% | 12.48% |
| 1991 | 30 | 0.00% | 9.13% | -0.06% | 9.20% |
| 1987 | 34 | 0.00% | 7.95% | 0.00% | 7.95% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and so unusable. The corresponding 10 year ratios are 11.47, 16.13 and 19.64. The corresponding historical ratios are 9.76, 12.64 and 15.30. The current ratio is 0.35 based on a stock price of $1.13 and EPS of the last 12 months of $3.24. This ratio is below the low of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share (AEPS). The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and so unusable. The corresponding 10 year ratios are 11.47, 16.15 and 19.68. The current P/AEPS Ratio is 0.41 based on a stock price of $1.13 and AEPS of the last 12 months of $2.93. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $16.56. The 10 year low, median, and high median Price/Graham Price Ratios are 0.86, 1.14 and 1.48. The current Ratio is 0.07 based on a stock price of $1.13. 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 0.97. The current P/B Ratio is 0.32 based on a Book Value of $184M, Book Value per share of $3.76 and a stock price of $1.13. The current ratio is 67% 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 6.73. The current P/CF Ratio is 0.51 based on a stock price of $1.13 and Cash Flow less Working Capital of $1.16M, CFPS of $2.37. The current ratio is 92% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I cannot do any dividend yield testing as the company has suspended their dividends.
The 10 year median Price/Sales (Revenue) Ratio is 0.28. The current P/S Ratio is 0.09 based on Revenue of the last 12 months of $662M, Revenue per Share of $14.07 and a stock price of $1.13. The current ratio is 68% 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 cheap. Actually, the stock is very cheap. All the testing is pointing to a very cheap stock.
When I look at analysts’ recommendations, it seems that no analysts are following this stock. Currently WSJ has a Hold recommendation and a stock price in one year of $5.00. This would imply a Total Return of $342% all from capital gains. However, it is uncertain if this is really a current recommendation.
Last time an analyst looked at this stock on Stock Chase was 2019. Stock Chase gives this stock 1 star out of 5. A Simply Wall Street report on Yahoo Finance talks about the company coming out of its restructuring proceedings. The company announces on Newswire its fourth quarter results for 2022.
Reitmans (Canada) Ltd is an apparel retailer based in Canada. Its main business is the sale of ladies' specialty apparel to consumers. The company operates an e-commerce website shopping for all its banners. Some of its revenue sources are from the sale of merchandise, customer loyalty award programs and sale of gift cards. The group offers its products through the retail banners of Reitmans, Penningtons and RW & CO. Its web site is here Reitmans (Canada) Ltd.
The last stock I wrote about was about was HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF) ... learn more. The next stock I will write about will be Ritchie Bros Auctioneers Inc (TSX-RBA, NYSE-RBA) ... learn more on Wednesday, June 1, 2022 around 5 pm. Tomorrow on my other blog I will write about Matt Levine.... learn more on Tuesday, May 31, 2022 around 5 pm.
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