Is it a good company at a reasonable price? This stock is coming out of bankruptcy. It is a high risk stock. It will probably slowly recover, and I would not expect any high returns when this stock does recover. You should not invest in this stock any money you cannot afford to lose. The stock price is probably cheap.
I do not own this stock of Reitmans (Canada) Ltd (TSX-RET.A, OTC-RTMAF), but I used to. I was following this stock as it was a stock on Mike Higgs' dividend growth stocks list. I bought this company in September 2013. It was in financial difficulties and so was quite cheap. I believed it would recover, but it is taking too long. I sold in January 2021 and I lost money on this stock but did collect some dividends.
When I was updating my spreadsheet, I noticed that it is surprising how well this company is coming back to life. The low seems to be in 2021 for sales. Sales have increased in 2022 and 2023. The stock price is coming up also, with a low in January 2021 and increases in 2022 and 2023. Stock price has gone from $0.18 to $3.00.
If you had invested in this company in December 2012 when this stock was first issued, for $1,000.15 you would have bought 83 shares at $12.05 per share. In December 2022, after 10 years you would have received $149.40 in dividends. The stock would be worth $183.43. Your total return would have been $332.83.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $12.05 | $1,000.15 | 83 | 10 | $149.40 | $183.43 | $332.83 |
Looking at some growth rates for this company, I can see that revenue is not growing and stock price is also not growing, but Earnings and Cash Flow are. Earnings and Cash Flow are recovering from very low levels. Note dividends have been suspended.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth | -16.94% | -3.64% |
| 5 | AEPS Growth | 893.75% | 58.29% |
| 5 | Net Income Growth | 576.16% | 46.56% |
| 5 | Cash Flow Growth | 379.86% | 36.84% |
| 5 | Dividend Growth | 0.00% | 0.00% |
| 5 | Stock Price Growth | -48.12% | -12.30% |
| 10 | Revenue Growth | -19.98% | -2.20% |
| 10 | AEPS Growth | 287.80% | 14.51% |
| 10 | Net Income Growth | 191.77% | 11.30% |
| 10 | Cash Flow Growth | 188.97% | 11.20% |
| 10 | Dividend Growth | 0.00% | 0.00% |
| 10 | Stock Price Growth | -81.66% | -15.60% |
Dividends have been suspended, so I cannot talk about dividend yields or Dividend Payout Ratios.
Debt Ratios are good. The company has not long term debt currently. The Liquidity Ratio is high and good at 2.16. The Debt Ratio is high and good at 2.42. The Leverage and Debt/Equity Ratios are low and good at 1.70 and 0.70 respectively.
| Type | Ratio |
|---|---|
| Lg Term | 0.00 |
| Intang/GW | 0.02 |
| Liquidity | 2.16 |
| Liq. + CF | 3.38 |
| Debt Ratio | 2.42 |
| Leverage | 1.70 |
| D/E Ratio | 0.70 |
The Total Return per year is shown below for years of 5 to 35 to the end of 2022. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 0.00% | -10.50% | -12.30% | 1.80% |
| 2012 | 10 | 0.00% | -13.20% | -15.60% | 2.40% |
| 2007 | 15 | 0.00% | -9.46% | -13.42% | 3.96% |
| 2002 | 20 | 0.00% | 6.58% | -4.22% | 10.80% |
| 1997 | 25 | 0.00% | 12.76% | 0.17% | 12.59% |
| 1992 | 30 | 0.00% | 8.58% | -0.33% | 8.91% |
| 1987 | 35 | 0.00% | 7.94% | 0.16% | 7.78% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 0.05, 0.37 and 0.69. The corresponding 10 year ratios are 0.27, 0.87 and 1.46. The corresponding historical ratios are 9.76, 12.32 and 15.28. The current P/E Ratio is 1.93 based on a stock price of $3.07 and EPS for last 12 months of $1.59. This is ratio is higher than the high of the 10 year median ratios. However, all the ratios are extremely low except for the historical ones. The P/E Ratio of 1.93 is extremely low and would suggest that the stock price is cheap.
I have Adjusted Earnings per Share and Continuing EPS for this stock. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are all negative and unusable. The corresponding 10 year ratios are 0.28, 0.89 and 1.50. The current P/AEPS ratio is 1.93 based on a stock price of $3.07 and AEPS for the last 12 months of $1.59. All these ratios are extremely low and this would suggest that the stock price is cheap.
I get a Graham Price of $13.82 . The 10-year low, median, and high median Price/Graham Price Ratios are 0.77, 1.02 and 1.22. The current P/GP Ratio is 0.22 based on a stock price of $3.07. This ratio is below the low ratio 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 0.58 based on a stock price of $3.07, Book Value of $260.8M and Book Value per Share of $5.34. The current ratio is 39% 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 6.62. The current P/CF Ratio is 1.00 based on Cash Flow for the last 12 months of 149.7M, Cash Flow per Share of $3.06 and a stock price of $3.07. The current ratio is 85% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I cannot do any dividend yield tests because dividends have been suspended.
The 10-year median Price/Sales (Revenue) Ratio is 0.26. The current P/S Ratio is 0.19 based on Revenue for the last 12 months of $801M, Revenue per Share of $16.38 and a stock price of $3.07. The current ratio is 28% 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 testing is showing this. The other stock price testing all confirm this.
When I look at analysts’ recommendations, I find on WSJ a current recommendation of Hold (1). I also find on WSJ a target price of $5.00 from one analyst. This implies a total return of $62.87% and all from capital gain.
Analysts on Stock Chase last made remarks in 2019. Stock Chase gives this stock 4 stars out of 5? It is, of course, not on the Money Sense list. Chen Liu on Motley Fool also last wrote on this stock in 2019. The company put out a press release on Newswire about their January 2023 year end results. There is little coverage of this stock on Yahoo Finance. One is a newswire item on Yahoo Finance about Reitmans getting into e-commerce.
Reitmans (Canada) Ltd is an apparel retailer based in Canada. Its main business is the sale of ladies' specialty apparel to consumers. The Company's operating segments, operate in the women apparel business, in Canada. 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 RB Global Inc (TSX-RBA, NYSE-RBA) ... learn more on Friday, June 2, 2023 around 5 pm. Tomorrow on my other blog I will write about Best Dividend Stocks .... learn more on Thursday, June 1, 2023 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 site for an index to these blog entries and for stocks followed. 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment